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There's a lot of talk about investors not being as easily available outside SV, but having worked for startups outside the valley most of my career my experience is that it's actually the rich customer bases you're missing by not being in the valley. I think it's easier to evangelise a product where there's a huge receptive audience, and doing it in person is much more effective. Trying to sell people on some new tech in a 1 million person or less city is hard, even when that city has decent official support for startups.

Businesses are more cautious and there are harder to cross barriers to word of mouth spread for consumer oriented businesses. For example, I worked for a social network started before Facebook that was used by nearly every teenager in a large region, but we could not break out of that region no matter what we tried. The kids in the schools in our region just didn't interact outside the region much, so there were no network effects.

In the valley, though, nearly everyone you meet is excited about tech somehow. Many people are from somewhere else in the world and are still in some way connected to where they're from, both in terms of businesses and people. It's just fertile ground for network effects.




Couldn't it also be that your Viral K-factor was below 1?


Certainly by the time Facebook became open to the general public it was. Before that, until we saturated our geographic area, it was definitely viral growth.

I'm not saying we didn't have other problems that would have led us to fail eventually anyway (especially to facebook), but we observed this as a very real problem.


This is the kind of thing that's relevant when it's relevant. If you are making twilio or stripe, it is probably important to be in SV. If you're making tinder, you should probably live in a big college town. Facebook? You can live anywhere. Twitter? LA might be a good idea.

If you're making an ebay killer, you can live anywhere.


I don't think Facebook could ever have been as successful anywhere else. At the very least, its incubation on a major college campus was a huge benefit, and the students themselves evangelised it to the rest of the world.


Sure. It needed to be near students. There are students in other places too.

Anything else applies to any other startup, I think.




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