

Where to start up a startup - yurisagalov
https://www.aerofs.com/blog/where-to-start-a-startup/

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dsugarman
I couldn't disagree more about the access to talent section. While many
engineers are willing to relocate to the bay area, many also are not. Right
now, it is pretty saturated. There is also a missing part of your function, #
of good positions with other companies. When you move to the bay area, because
of the saturation of engineers, the lowest hanging fruit for many is to poach
engineers who work at other companies. You are going to have much, much more
competition for your engineers in SV than virtually anywhere else in the
world. Your example of Waterloo proved it is a great place to bring in
talented engineers with RIM, even if they didn't hold on to their dominant
position.

~~~
s73v3r
"While many engineers are willing to relocate to the bay area, many also are
not."

The numbers indicate that many more are willing than those who are not.

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nostrademons
They don't, actually. While the engineering population of SF is growing fast,
the increase is a tiny fraction of the total number of software engineers in
the U.S, let alone in the world. Remember Joy's Law: "No matter who you are,
most of the smartest people work for someone else." [1]

What the Bay Area does have is a greater concentration of talented engineers
_than any other major municipality_. When you're trying to make a concrete
decision where to locate your startup, that matters. And most of the people
who argue "Don't move to SF" aren't actually arguing "Move somewhere else",
it's usually "Adopt a distributed team where you pick the best engineers
regardless of location." The latter approach has a bunch of its own problems,
so it becomes a tradeoff of getting the biggest possible talent pool possible
vs. reducing communication costs and building a team locally.

[1]
[http://en.wikipedia.org/wiki/Joy%27s_Law_%28management%29](http://en.wikipedia.org/wiki/Joy%27s_Law_%28management%29)

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solve
The vast majority of men do not actually date supermodels, and therefore they
must not be willing to.

Just joking, but I think your logic might be slightly missing some other
important factors.

~~~
nostrademons
It works if you substitute "willing and able" for "willing", which is the
usual context of this discussion. If you are willing and able to date a
supermodel and you don't, well, why the hell not?

(FWIW, I personally have little interest in supermodels...but then, most
people would consider that lack of interest = "not willing", so the logic
still holds. Like all logic, it obscures subtleties - I'd be quite willing if
she were a good match beyond being a supermodel and I weren't already attached
- but then, this is a problem generally with imposing words on the world, and
not with the specific instance.)

~~~
solve
The parent in this thread literally said "willing".

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rdl
The most unfair advantage seems to be: be a "foreign" founder with deep
connections to a network outside the Bay Area (could be India, but could also
be UMich..). Relocate to SF, do your startup here, raise money here, hire
initial people either here, or have people from "home" move out for your
company.

Later, open an engineering office in your "home" location to take advantage of
non-SV hiring possibilities. You can get started on this in a limited way by
contracting work back "home", especially for non-core functions.

~~~
codegeek
how can a US company open engineering office in a country like India etc ? Is
there anyone on HN doing this ?

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beat
Countless companies do it at the enterprise level, or even much smaller. A
dedicated Indian engineering team can be managed more like an in-house team
than rented contractors.

~~~
codegeek
In terms of logistics, I would love to know how to go about this like setting
up office in India being a US company etc. Any online resource to tap ? I
doubt my local accountant will have any clue.

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BSousa
Can't say about India, but usually goes like ->

US C-Corp or the likes which is owned by the shareholders. Then C-Corp owns
100% of the shares of the company of subsidiary (depending on jurisdiction
there maybe legal limitations imposed). Then there is usually an 'agreement'
where all IP generated by sub. is owned by parent company, and parent company
pays X to sub. company for services (which are usually 100% match to the
expenses). Sub. company hires and manages the employees and deals with local
taxes, etc.

This of course, depends on size of the companies (both parent and subsidiary)
and countries and then there are a bunch of agreements to make sure everything
is above board, but pretty much works this way.

source: just had a friend's company that went through doing that, having a
Delaware parent company and a subsidiary setup in Portugal.

~~~
codegeek
Thanks for the helpful tip.

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mgob
Echoing other comments here, I think college towns make excellent startup
founding locations. They often have plenty of access to graduating talent, and
many have thriving tech scenes to begin with. Ann Arbor, Boulder, Waterloo,
Champaign, Boston, and many other towns avoid the costs of SV while still
allowing plenty of access to technical and financial resources. While markets
in these towns might not perfectly mimic the larger national market, they have
a similarly young-and-technically-proficient subset of the population as
larger tech hubs, both in terms of talent and users.

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lettergram
I have decided to base my starup out of Champaign IL. The burn rate is super
slow, there are ton of resources (and people to recruit) from the University
of Illinois, and tons of willing buyers/participants.

~~~
remyp
I grew up in Champaign, spent two years in college there, and fled to Chicago
in 2009 because there were absolutely no programming opportunities available.
Thank you so much for investing in my home town -- I belong in a big city, but
I still think of Champaign fondly.

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xhrpost
Though I may not like it, I believe it. It's unfortunate that with SF's
skyrocketing cost of living that we can't spread that out to cheaper and less
economically fortunate cities.

~~~
exelius
It's hard to replicate SV's investor network. VCs in other cities definitely
form small communities, but everyone has ties to the valley. If you're in the
valley, there is also a critical mass of other companies to provide services
-- many VCs use the other companies in their portfolios dogfood each other's
products, which helps create networks between founders and engineers as well.

There is definitely a critical mass in SV that's really hard to replicate
elsewhere. Not that it can't be done; but it's a lot easier to acquire funding
and talent in SF than elsewhere. And I say this as someone whose focus is
outside the SF area.

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jarek
If your goal is to get VC funding, Bay Area is the place to be.

If your goal is to run a company, that is not quite as clear.

~~~
d357r0y3r
Yeah, that's one thing that isn't really addressed. Not everyone is out to get
50 million in funding and build a trillion dollar business.

~~~
jarek
It's posed as an answer to Y Combinator questions so fair enough, if you're
already in YC you probably want the 50 million of VC.

But it seems so oriented at VC lifecycle - funding, hiring people SV VC
acquihirers would want, exits - that it leaves no room for factors involved in
actually _running a company_.

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mojoe
I realize that this is a Canada vs SV post, but I wanted to plug Boulder, CO
as a great place to start a startup. We don't have even close to the amount of
venture capital funding as there is in SV, but the talent pool is large and
highly concentrated, and there are a decent amount of VC firms. Many tech
companies both large and small are realizing this (for example, Google is
currently in the process of building a 1500 person campus there, expanding on
their current presence). Also, quality of life is very high.

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beat
Every time I'm in California, people tell me I should move my startup out
there, rather than Minneapolis. But I'm (probably) staying here. I have a
network here, too... maybe not as grand as Silicon Valley, but it's something.

Just like startups need to find a niche against entrenched companies, non-Bay
area startup communities need to find their niche to compete with Silicon
Valley. In the Twin Cities, we have a lot of medical startups, and a lot of
interest at least in enterprise-oriented startups, thanks to our massive
Fortune 500 headquarters concentration. Best Buy is very supportive of the
startup community, and Target is very supportive of DevOps. In March, we're
having our first enterprise startup conference
([http://enterpriserising.co](http://enterpriserising.co)). Over the next few
years, I think we're grow into our niche. I hope so!

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kidsil
TL;DR: Silicon Valley is better than Canada because more money is flying
around.

I mean come on, at least make some sort of fail rate, future tendencies by
looking into the data over the years, ANYTHING.

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codingdave
I've only been involved in 2 funding efforts for the companies I have worked
for, but did not find it true that potential investors will refuse talks just
because you are not incorporated in Delaware.

There were some who requested that we incorporate in Delaware as requirement
of the deal, but that is just a matter of making the change. I've never seen
anyone unwilling to start discussions just because some paperwork will need to
be done.

The advice I have received from my own legal counsel was to incorporate
locally until that time that a Delaware move made business sense. Of course,
that was my counsel in my situation. If your goals and business differ, you
may receive different advice.

~~~
tlb
Of course they'll talk to you. The question is whether they'll write the
check.

Re-incorporating from another US state is not too hard and expensive, although
I have seen it hose some companies (for example, Rhode Island is a
particularly bad state to be incorporated in). Re-incorporating from another
country is much harder and can delay things by a couple months, which is long
enough for a deal to fall through.

The important thing is to be physically near investors. They'll want to drop
by many times during the life of the company.

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tjl
The comment about SR&ED is somewhat incorrect. It's not exactly difficult to
fill out timesheets, even for "thinking". It's just research into a specific
topic. I worked for a Canadian startup for a time and I spent a few minutes
each week updating my SR&ED spreadsheet for the work I did that week.

There's a pretty big pool of talent in Waterloo (as well as Toronto and
Ottawa) and there's many startups in here as a result. While the pool is
smaller than in SV and there's less access to capital, there's some good
accelerators around and space costs far less.

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chrisdinn
Starting your business in Canada also limits your exit options, or makes them
a lot more difficult. As someone who just survived an acquisition that
required the entire engineering team to relocate from Toronto to NYC I can
tell you that it's much harder to move a company across the border than you'd
think.

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LordHumungous
I'd have to imagine that the burn rate in Canada is going to be much lower
than in San Francisco in terms of cost of living, paying people, etc. Not that
it totally negates SF's advantage of course.

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otakucode
If you've asked the question, you've already failed.

It's 2015. Are you not capable of overcoming the limitations of geography with
technology?

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widowlark
I'm gonna put my vote in for Bellevue, WA to be the next place to start a tech
business. Wait and see.

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droidist2
Why Bellevue instead of Seattle?

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rifung
I would guess it's because it's relatively close to both Seattle and Redmond
so you have ex Amazon and Microsoft employees who are willing to work there.
Actually I think that Microsoft already has some offices in Bellevue. Plus,
it's way cheaper.

For what it's worth, I currently work and live in Seattle but I would
completely prefer living and working in Bellevue.

