People actually move to new cities in order to found startups?
And when they do, they move to Silicon Valley or the Bay Area, where talent is more expensive than anywhere else on the planet?
WTF?
I live in Boston and dig it, but this sort of article screams "trying too hard." Anyone who even considers the possibility that Boston might not have enough talent for their startup is a crackhead. Basically any place with a university and access to the internet is a good enough place for the right founder to build something of quality.
Basically any place with a university and access to the internet is a good enough place for the right founder to build something of quality.
This is true, but making a successful startup requires a lot more than building a quality initial product. Although successful companies can be founded virtually anywhere, the domain knowledge needed to grow and scale a technology startup is concentrated in certain geographies—especially Silicon Valley and San Francisco. In terms of tech entrepreneur social networks and institutional knowledge about investment, growth, scaling, etc., Boston is far behind the Bay Area, and the gap is growing every day.
> the domain knowledge needed to grow and scale a technology startup
This is a common enough claim that it could be considered "common knowledge," and I wouldn't be in a good position to refute it even if I could figure out what exactly the claim is.
Is the claim that it takes specific domain knowledge to convince people with money to invest in a business? That it takes specific domain knowledge to scale up a sw/hw infrastructure to handle top-tier web application workloads? That is takes specific domain knowledge to hire teams of engineers?
All of those things are true, of course, but in what way is any of that domain knowledge particularly concentrated in SV or the Bay Area?
The concentration of already-exited former-founders is higher, and that's real, but at the end of the day we're still talking about Software Businesses. Is the problem of converting value-laden software to revenue streams really all that exotic and complicated, such that only people in a particular social network have cracked it?
> the gap is growing every day
Again, a) by what metric, and b) even if true n-1 of the last n days, it's a big world out here and a lot of it writes code and attacks problems.
*institutional knowledge about investment, growth, scaling, etc.
This might always be the case for East Coast startups. You start a business, you need investors that understand your business.
I hypothesize that if you start a tech business in Boston -- and succeed -- you're more likely to move someplace warmer, or cheaper, or back to your home state (or mother country), or to a place that has lots of startups in your field to invest your money because you understand their business.
The East Coast has a lot of great talent. The scale of their new talent cultivation is likely unrivaled even by the Bay Area. It's just that Boston isn't home for many of its most successful.
Here's what pg had to say on the subject when he relocated YC in 2009:
"We never tried to claim to the startups in the summer cycles that it was a net advantage to be in Boston. The most we could claim was that we could mitigate the disadvantages sufficiently well—for example, by flying everyone out to California to present to investors at our Mountain View office. But we did worry that the Boston groups were losing out. Boston just doesn’t have the startup culture that the Valley does. It has more startup culture than anywhere else, but the gap between number 1 and number 2 is huge; nothing makes that clearer than alternating between them."
I’m a regular on the Boston startup scene; I'm also a native Bostonian.
We have tons of smart people; everybody knows that. And there’s a kind of a startup culture here. But, like a lot of
things about Boston, it is its own thing. Once you leave the Kendall/MIT area of Cambridge or the Innovation District in Boston, you'd never know we had lots of startups in the area. I've been to San Francisco many times; the startup culture is everywhere there.
There’s the lingering feeling of losing Facebook and, more recently, Dropbox and Stripe—one Collision brother attended
MIT; the other went to Harvard.
There’s a constant brain drain to other places, particuarly the west coast. I know of people who left Boston for weeks at a time to get funding and engineering talent in San Francisco. There’s quite a bit of that New England financial conservatism compared to the West Coast.
People often underestimate the little things: it’s hard to make friends outside of a startup or academic setting. I
hear this constantly from people who are here for school or work, including startups. Even in Cambridge with MIT and
Harvard, it’s hard getting real food after 10pm.
Need to stay late on a project? Sorry, public transportation stops at around 12:30 am; the MBTA is threatening to stop
commuter rail service at 10pm during the week for those going to the suburbs.
Want to blow off some steam after a long day of pitches, meetings and coding? Massachusetts outlawed happy hour years ago. Most bars and clubs close at 1am in Cambridge and 2am in Boston. How about a six pack at the 7-Eleven? Sorry, we don't do that here. I could go on, but you get the idea.
Boston is my home; I’ll be right here when I do a startup. But it’s going to take a lot of work to get things to where they need to be. We might have to lose another household name before there’s a real sense of urgency about it.
You also need access to finance who grock the industry your working in - if you can, watch the documentary Micro Men there's a great scene where Cris Curry and Hermann Hauser are trying to explain to some local clueless bank manger that they want to build a personnel computer (the Acorn Atom)
I will add that Backupify started in Louisville, KY, and we were funded by First Round while we were still there. We didn't have to move to raise money, but we couldn't find the tech/startup talent we needed. So we looked at NYC, Boston, and the Valley. I talked to lots of people who lived in each place and ultimately, as you would expect, everyone raved about whichever place it was that they lived. Ultimately, I chose Boston because MIT is the most innovative place in the world, and because it is a highly intellectual city and I have a lot of interests outside of just tech startups. I've been very very happy here, and think it's a great place to build a company.
I run a startup and a consulting business in Miami.
My girlfriend has been offered to move to Boston, and I'm not going to hide that I'm afraid at the idea of leaving a place where I built tons of connection in the past 6 years (I moved to Florida from Italy, so I started with 0 connections). I'm afraid that I will have to start from scratch again in Boston, where I don't know a single person.
What are you thoughts about moving a company to Boston? Are people open to accept a new person in the community or is it very closed and elitist (I'm definitely not MIT or Harvard material).
EDIT:
By the way, I will be in Boston (she's going to check the place) from March 10th to the 13th, I would love to meet you or participate to any event. So if you are there please email me at davide at 39inc.com :)
Davide - looks like you're going miss it, but if you're ever in Boston on a Thursday you should check out http://www.venturecafe.net/ - it's a very friendly and open entrepreneur-centered event every Thusday.
There are hundreds of events every week (most free) if you want to meet people (see http://greenhornconnect.com/ )
The startup scene is not elitist at all. There are lots of easy places to plug in and I think people are generally receptive. Feel free to ping me when you arrive here or email me. I'm easy to find online.
Hi, Davide. Feel free to get in touch if you'd like to have a web developer in your network: http://techiferous.com/about/
My relocation to Boston was logistically difficult, so I have a soft spot for helping others relocate. I'd be glad to be of assistance if you need help or have questions about Boston neighborhoods or tech hangouts.
Lots of good geeks and networking possibilities here. One big difference between FL and MA (besides the weather) is that in MA we're generally up-front about it when we dislike people. I much prefer it. Saves wasting time on people who don't want anything to do with you, and make it much clearer who the people that DO want something to do with you are. Obviously, your mileage may vary with this.
Of course, living in Boston is crazy expensive too...
You can live just outside of Boston for pretty cheap. I'm currently in Framingham and moving to Somerville sometime this summer. Probably going to be around $2000/month (counting bills).
Boston is a place where a lot of things start. Do music here, then on to LA. Standup comedy here, then to the real land of New York City. Tech startups are born here then go to the Bay area.
Currently about 242 listed -- I know there are more, but discovery is challenging; many web startups don't make any mention of where they're physically located on their site.
One of the main ones just being Geography: We are close to tons of great schools for hiring talent and there is customer access as well, with so many other Fortune 1000 companies around, in Finance especially. If only the investors took as much risk as those in CA and in NYC!
Related question: if you're not aiming to raise money or grow big fast, how important is it to be in a tech hub?
I live in Waltham, right outside of Boston, and am considering moving somewhere cheaper and warmer because the benefits of building a company here (or SV) don't seem as important if you're going the MicroISV/Micropreneur route. Thoughts?
Come to Austin. We have a nice tech scene here (and budding seed/angel funding community) and it's still relatively cheap to live here.
And it's pretty warm--though the summers get hot. But that's the beauty of growing an Internet business--locate somewhere it's cheap, and head out for a month or two whenever you need to.
It is cheaper and there is a lot of low priced, decent talent coming from UCF but if you are selling locally it will be tough since everything sells for less there.
You will also have no backup plan if your startup doesn't work since wages are so low.
There is no startup scene and everyone you meet will work in real estate or hospitality.
I live in beacon hill now and can tell you that I am constantly impressed by the smart people I meet in Boston. When I lived in Orlando I felt the exact opposite.
this. I love florida and usually spend a month or two in the winter there. I am not impressed with the people, coming back to boston is a breath of a fresh air. I can move my startup there full time but I don't primarily because of how out of place I feel most of the time (and its too darn hot in the summer)
I don't get it. Are you saying that's a platitude that people tell themselves because it sucks where they live?
No, I love the seasons. I love a heavy winter storm and hiking up into the back country for virgin runs in 3 feet of champagne powder. I love sitting in front of a roaring piñon fire drinking hot cocoa. I love the spring thaw and swollen rivers. I love the summer and the heat and the smells and sitting on the porch at night. I love the fall and the aspens turning with long hikes and mountain bike rides.
I've also lived in central Brazil which is quite a bit nicer and more steady than Florida being medium elevation in the tropics (ie. daylight and temperature vary only slightly and it's not too humid). I mean it's nice to visit from a winter climate, but I prefer some variation.
It was a little bit of a joke with a lot of truth to it. I live in Boston now and wish it were warm like Florida but it is worth having crappy weather for everything else the city has to offer.
As one comment summed up:
"As the founder of a 5 strong semi-stealth Madison startup I can definitely attest to our fair city's startup culture. Great university, great lifestyle options and create urban and natural environments. It's hard to beat our live-work-play stats outside of Europe. We've been rated the best place to live in the US, raise a family, bike, and other various accolades from major orgs/mags over the years."
I always wonder if such commenters have ever lived in or even visited SV or SF. I liken it to occasional comments I've heard that the Bay Area has a thriving entertainment scene. These people have clearly never lived in LA. Until you've lived in a hub for Industry X, you really have no idea how thoroughly Industry X can saturate you and seep into your brain by osmosis. It seems like everyone in Silicon Valley is in on a deal or a startup. In LA, people talk about "the industry" without explanation—everyone knows which industry they're talking about.
If you want your tech startup to have the best chances of success, there's no substitute for moving to the Bay Area. That's only one axis on which to optimize, of course, and there's more to life than maximizing the value of your company. But anyone who thinks that the Madison (etc.) startup scene is a reasonable substitute for the Bay Area needs to get on an airplane tout de suite and hang out in Palo Alto, Mountain View, or SOMA for a week. Believe me, it'll blow their mind.
San Diego. I moved here on a whim a bit over a year ago after traveling all over the country on JetBlue flying places. San Diego just seemed to have an incredibly high quality of life, and it does.
There's also a great Ruby community here if you happen to be a Ruby developer: http://sdruby.org
I was born in Waltham and grew up in the area; I'm in New York right now.
It's unclear what stage you're at right now from your question, but being in a tech hub isn't always as important as you think. If you grow beyond a certain size (hard to quantify; there's no hard-and-fast rule here), you'd be foolish not to have at least an office in/near one of the large hubs, but that's not necessarily the biggest consideration at the beginning.
By the way, this is one area in which tech isn't really any different than any other industry - you'd be surprised how many companies in the financial sector have headquarters elsewhere and simply have a (rather large) office in New York (though not usually on Wall St. - that's more of a metonymy than the actual center of business these days).
Is there a particular type of startup that would be appropriate for Boston versus other locations? My instinct is that outside of Biotech and Enterprise software, it is still a huge disadvantage to start a startup in Boston, but I would love to be proven wrong (ideally by some sensible statistics).
Is Boston the kind of place where you can locally raise a seed round with ten or twenty angels for your consumer web startup with great traction but no revenue? Is Boston the kind of place where you can find engineers whose former job was to scale a database or web server or cache to hundreds of millions of active users? Are there deep pocketed companies locally who can afford to and regularly do acquisitions? Are MIT/Harvard (or BC, BU, NE, Tufts, WPI, Olin) grads going to Boston startups, or are they going to banking, Dropbox, or Facebook? Are there enough senior people around?
Vertica, ITA, and Basho are all great companies for example, but are they succeeding because they are in Boston, or in spite of it? How often are these companies flying out to the SF Bay Area to handle core parts of their business (customers, investment, business development)?
Is Boston the kind of place where you can find engineers whose former job was to scale a database or web server or cache to hundreds of millions of active users?
It must be, otherwise Akamai would not stay in Cambridge.
ITA and Kayak were both founded in the Boston area. I've never really figured out why travel sites seem to have such a base in the Boston area. Anybody have ideas? Proximity to Logan for international travel? MIT and Harvard being located there hence lots of travel...?
Founders of ITA were MIT grads, and hired lots of MIT folks. (Former ITA Software employee here - though not an MIT grad). ITA has been around for over a decade FWIW.
If you are looking for serious computer science expertise, Boston is a great place to be. It's not the place to find cheap web developers, but if your start up needs CS Ph.D.s who can write code you'll be set. Most of the famous Boston start ups were fundamentally algorithm shops.
For what its worth, most of the MIT grads I know have either stayed around Boston or gone into academia. Cambridge, and then later Arlington, are great little towns and vastly different than California.
I really like the Boston tech scene, and the atmosphere and social environment created around it. I work with a lot of folks from/around the area on a daily basis, so even though I'm not in Boston, I have a lot of friends and connections there and make at least one pilgrimage there a year to spend a few days doing business in person. If it weren't for separating the child from the grandparents, I would move into the area (though maybe not in Boston itself, due to the high cost of living). Maybe when the kid is older.
Does anyone care about living in a city that's just plain nice to live in? Everyone's so concerned about whether a city is conducive to start-ups they miss out on evaluating quality of life from a personal perspective.
I choose to live in San Diego because I love to live in San Diego, for innumerable personal reasons, not because it's "startupy". Stocktwits moved to Coronado island near San Diego not because there's a thriving start-up scene here, but because it's just a damn nice place to live and work. Developers who can live anywhere should want to live in great places for personal reasons.
For whatever it's worth, I've done a significant amount of traveling around the United States (mostly on three JetBlue flying passes) and in general find cities like Boston to be overrated in terms of quality of life, especially when factoring in the enormous cost of living.
No doubt these are all personal value judgments. I just wonder why people optimize so little on the simple personal quality of life vector and so much on whether there's a bunch of "startupy people" there.
I'll respond. I lived in the Bay Area for 10 years, had a very successful exit, and packed it up to move to San Diego. Started another startup there and met my co-founder there--but recently went to Austin.
I missed the energy of the Bay Area, frankly. San Diego is sleepy. But the last thing I wanted to do was go back to the Bay Area and get sucked into the vortex again. Austin seemed like a happy medium.
Since moving to Austin, I can safely say that I expect my company's revenues to more than double this year from what we were doing in San Diego. We work with many local businesses, and we're booming right now. In fact, since we moved from San Diego, we've grown from 7 to 9 people, hired another full-time developer, etc.
Things are just way more exciting here. (Not to mention that I'll save nearly $40,000 this year on taxes. And groceries/housing/gas are way cheaper.) Though I'll always have a place in my heart for San Diego, it's just not a great place to do a startup. Austin is my home for the foreseeable future, and I'm happier here than I ever was there, despite the amazing weather in SD.
Since moving to the Boston area in the mid 90s, I have never seen an employment agreement or contract with a non-compete clause lasting after employment ends.
YMMV, but you should also be reading and negotiating these things.
Gotta love how the absence of state laws restricting what contracts between private individuals can include is described as being "the most repressive".
Ultimately these clauses are part of private, consenting employment agreements. If you don't like a non-compete clause offered by an employer (which is possible in MA since are no strong laws against it), nothing is forcing you to sign it.
Especially since it's a "suppliers market" for labor in our industry, you should be able to easily negotiate out of one if an employer tries to bring it up.
However, taxes are probably going to be a pretty small consideration for a startup, since the top three locations (Wyoming, South Dakota, Nevada) are not particularly hot in startup land, but the bottom three (California, NY, New Jersey) are.
And when they do, they move to Silicon Valley or the Bay Area, where talent is more expensive than anywhere else on the planet?
WTF?
I live in Boston and dig it, but this sort of article screams "trying too hard." Anyone who even considers the possibility that Boston might not have enough talent for their startup is a crackhead. Basically any place with a university and access to the internet is a good enough place for the right founder to build something of quality.