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Ryan Carson responds to Paul Graham on startup hubs (carsonified.com)
46 points by ag on Oct 11, 2007 | hide | past | web | favorite | 51 comments

How can we get to that critical level of support here in Europe if we always have people saying everyone should move to Silicon Valley?

I was more concerned with saying something true than saying something that would encourage startups in a particular region. I agree entirely that saying startups will do equally well anywhere would encourage startups in Europe. If Carson in turn agrees that this statement, though encouraging, is false, then we'll have settled our differences.

There's only one way to really settle this. MORTAL KOMBAT!!!!!!!!!!!!!!

I've been hearing a lot of talk about entrepreneurs moving AWAY from Silicon Valley too due to the overwhelming competition for talent and sky-high cost of living. Not to suggest SV is going away, but I wonder if you'll start seeing some activity in "tier two" cities that have solid infrastructure. I'm thinking Raliegh/RTP for example. Even Google is exporting some of it's operations to make finding talent easier. Again, not refuting the importance of SV, but wondering if there is an opportunity to build elsewhere with similar resources being exported.

The Silicon Valley Leadership Group actually ranked Silicon Valley at the bottom of their technology hub list for reasons such as you suggest. The NC Research triangle was first.


Yes, I think his response can be summarized as, "It's not true because I don't want it to be true."

I think Ryan and PG have a different idea of what startups are. PG said in response to a question at FOWA that he was talking about startups designed for acquisition by the likes of Google. Acquisition is much easier where there are big established companies to network with. Ryan on the other hand seems to be talking about bootstrapping and building to last, which doesn't depend on the benefits of SV as much.

I certainly did not say that. What I said was that if there was no exit, it wasn't a startup. IPO is also a form of exit.

But the conclusion here is also false: you need bold and intelligent investors even more to build a long-lasting startup like Google.

My bad, I must have missunderstood what you said.

I think you nailed it.

PG doesn't view something like dropsend as a startup per se. To him that's just a small business with a chance at being successful. Ryan sees Dropsend from a founders point of view: a significant success, but not something that's going to be acquired by Google for $xxM.

They're arguing from two different positions about two different things.

"bootstrapping and building to last, which doesn't depend on the benefits of SV as much"

Why's that? Funding, connections, deals, etc are still very important. If you want to grow your business at all, whether it's to an acquisition, IPO, or whatever... those things are still important.

Carson's arguments aren't very strong. However, I do wonder how a small team based in europe could move to Silicon Valley with no money and legally be allowed to work in the country.

I'm interested in hearing how YC works out the visa situation for teams based outside of the USA. We have had to pass on a number of awesome applicants because of visa problems. However, we do have a couple indispensible hackers based in Europe, and had to set up a (somewhat) complicated system of small european based companies so that we can bring them over to work for 3-5 months at a time.

For the most part though, I suspect that for most non-US-citizen entrepreneurs, the question "Should I move to Silicon Valley?" is a bit like the questions "Should I grow a pair of wings on my back?" or "Should I enlist the Loch Ness Monster as a cofounder?" It might be nice to do it, but given the difficulty of getting a visa as an entrepreneur, it's not really an option.

We've had a bunch who've done it. Heysan, Buxfer, and Auctomatic were all founded entirely by non-US citizens, along with several others that haven't launched yet.

If you raise a certain level of investment, you can stay in the US. I don't know the details; it varies depending on where you're from and where you raise the money.

I don't know what those YCers done, but I think raising enough capital to get E-2 investor visa would be the surest way now. It used to be possible to go through H1B before, but it became too tight. The actual amount of money you need to raise depends on each case; I've heard a rumor about something like $100K minimum, though it may also depend on the immigration lawyer to handle it. Absolute requirement is to show that you have a prospect to be big and hire lots of US citizens eventually.

I bet those bits of information would be extremely useful bits of information to post in a YC FAQ.

You need to understand Carson's position on this matter...He is trying to build up Europe as a startup hub, then someone walks in and tells his audience that there is a better startup hub. Ouch!!

Well, still, his argument isn't that London / Europe today are just as good as Silicon Valley, his argument seems to be to stop telling people Silicon Valley is better because they'll go there and Europe won't be able to catch up... in effect, that Europe CAN be as effective as Silicon Valley if nurtured. But that simply agrees with pg's argument that today, Silicon Valley is a better destination.

Sometimes the truth really hurts.

Actually, his position is that he makes money arranging web 2.0 conferences in London. How's he going to make money if all the "entrepreneurs" leave for silicon valley?

He arranges web 2.0 conferences in the Bay Area too....

Ryan raises some decent points, but I have to side with Paul on this one. If you want to -maximize- your startup's chance for success, moving out to SV (or other big hubs) would be the most logical choice. This doesn't mean your startup won't have a shot elsewhere, but he's just calling it as he sees it. What yields the best results is typically what people want to hear when it comes to getting advice.

Europe is ass-backwards in some sense.. they need to take more risks and foster a risk taking community.. It has a lot of pluses, but many minuses.. Every young person from the continent typically moves to London to work and make their money.

Also, about mobile.. Europe has had mobile for a lot longer than the US.. yet it takes Apple releasing the iPhone to begin to unleash its true power??

Interestingly some of the biggest investors in the tech boom and the housing bubble were UK and European institutions.. So the money is there.. it just needs to be redirected locally...

"There's way too much pressure in the web app industry to be the next $100 million dollar company. Screw that."

Well, that basically has to be your attitude if you can't rely upon angel support, meeting deal-makers, or follow-on capital.

So you'll do just as well... as long as you turn a profit quickly, you're not interested in being acquired before that, and you're not shooting for a large market? Not terribly inspiring.

>as long as you turn a profit quickly

Starting businesses that don't have this objective is how we got into the bubble mess of dot-com in the first place.

If this isn't your objective, you should find something else to work on.

How many years was it before Google started running ads? And let's not even talk about biotech.

there was an excellent article published in Foreign Affairs last year on the topic of Entrepreneurial Economies, written by Carl Schramm, author and CEO at Kauffman Institute.

the article is unfortunately not freely distributed and requires a subscription fee to access it.

The concept of hubs is central to his thesis. He basically argues that the key requirements for an industry hub are: large companies for R&D and M&A, Research Universities for research and tech transfer, Investment Groups for access to capital, and knowledge workers with applicable skills.

In the web/tech space there is no argument that SV provides the right mix of resources and is the leading technology hub.

Where the EU and metro regions in the US can improve is increasing the linkages between these groups and thus making it easier for entreps to succeed there.

Many of the examples Ryan provided in his post are examples of the progress that has been made in Europe.

I think PG is right. Ryan Carson wishful thinking is not going make it better. I due however think that Europe has an opportunity to attract hackers from everywhere (due to USA VISA policies) and build a vibrant startup community.

It's even harder to move to Europe as an entrepreneur for someone who is neither in the US or EU.

You're right, that's why i think european policy makers need to change that

European policy makers - or at least the ones I've been exposed to - generally have their heads pretty far up their asses in terms of the modern world. The nordic countries seem to do things a little better, however, they have some fairly strong reasons to not throw open the borders. Citizenship in those countries is the most valuable thing a lot of the poorer people own.

pg cares more about the immediate success of the entrepreneur.

Carson cares more about developing new Silicon Valleys.

They're both right, but as an entrepreneur, I know who I should be listening to.

pg cares about making money for YC. He does a lot of good things to do that but let's not forget that is his goal.

Carson is trying to become a pg of Europe.

Take both in measured amounts.

We get equity. We can literally only make money if founders make way more.

How does YC make money from any of this? /confused

Except may be it encourages his startups to move to the Valley, which increases the chances of YC's(and the startup's) success. Of course that just validates his essay that the Valley is the place to do startups.

They are arguing different points.

The first point being that startups do best in Silicon Valley. The second point being that startups can succeed elsewhere (Europe).

London and Paris will never become competitive startup hubs for the most simplest and most important reason, the climate!

Everybody loves sun and beaches!

Er... what beach do people in Palo Alto go to? Santa Cruz? Pacifica? The beaches in the Bay Area are FREEZING COLD.

The beaches near Boston, whilst disgusting, are actually much warmer and beach-like in the summer than the beaches in NorCal ever are.

Ok, so he's technically wrong about the beaches, but he's right about the climate. The fabulous climate (and landscape) is a big draw for the Bay Area. I feel excited every time I fly into SFO.

> The beaches in the Bay Area are FREEZING COLD.

Eh, they're quite cold but not unbearable. Trust me, I know -- I've swum from Alcatraz to SF :-)

so have I - it was freezing cold. :P


I'm in Portugal, we have very good climate and beaches but i don't think Lisbon or any other Portuguese city will ever be a hub. It's not just the climate.

obviously it's not the climate the most important reason. Europe has a very prominent problem to solve before even having the chance to develop such a hub.

But in the future there be a place that will concentrate and host those people ready to build this ecosystem.

It's more a culture problem Europe is facing. There may be ventures geographically descentralized that succeed but they wont be concentrated anytime soon, because there arent enough attempts and often the very comptetent people move to US.

The huge irony is Loic Le Meur, the French guy who is hosting LeWeb3, who is supposed to be working towards that purpose. Interestingly enough, his new startup is now in San Fransisco..

p.s. even if the beach is cold, I guess the sun is there and the lifestyle and life is non-stop, and must have been a catalyst in the beggining when Silicon Vally began to attract people. Anyhow, of what I now real estate was pretty cheap even 25 years ago, which must have been a very important role. Paris is already big and expensive and cloudy. London the same. Cities in Germany the same.

The people and the prices are not startup friendly.

The more people go out, the less they use your web two point oh app.

I would never move to Cali b/c I enjoy all 4 seasons. a sunny christmas would bother me, to be honest.

So perhaps Barcelona has a chance.

too many people focus on silicon valley - as the next group of startups come from anywhere, so will the incubators.

I hope he's right b/c I'm stuck in Kansas City (Not really stuck, I just love it here.)

Ryan Carson doth protest too much, methinks.

Why can't we be friends?

He said it himself. He's not replying b/c he's got a good point, he's replying b/c he's angry -- his blood is boiling.

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