1. SV money buys you some access to the market, in publicity and networking effects. Rural startups don't enjoy the same prestige or easy access to other companies.
2. The hockey stick is mainly needed to deal with impatient investors, not in itself. If you had a stable supply of money, you could grow over any number of years, but without showing the right graph its hard to raise money.
3. At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places.
I think it really depends on what kind of company you are building. If its something startup oriented like APIs, or any fad (like IoT), SV is your place. If you're in a capital intensive business, SV is again you place. If you're solving problems for tech companies.. then again. And if its social, you'd be cool if you're in SV and backed by an SV firm. You need the networking and coverage to succeed, and its much easier to come by in SV.
If you're making enterprise software, real hardware products, SMB tools and apps, then you can be anywhere else really.
Besides, SV has that startup vibe going for it. Its not quantifiable but it sure energizes to some degree.
"SV money buys you some access to the market, in publicity and networking effects."
It buys you into the echo chamber. Unless your customers are in the startup world, this probably doesn't matter for your business.
Pick a business category that isn't technology or software. Very likely, all of the most recent successes in that category were founded outside of silicon valley.
"At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places."
It's not like that in all places, but it's way better than people pretend. The unemployment rate for a good engineer in the valley is negative -- everyone is being poached by identical-sounding startups, all the time. So you're really just paying substantially more for access to a group of people who have worked at other tech companies.
...meanwhile, many of the best engineers I know continue to live outside of the valley, and work for a fraction of the going rate.
> It buys you into the echo chamber. Unless your customers are in the startup world, this probably doesn't matter for your business.
It buys you mass, global media. Its pretty much why AirBnB is anywhere close to as recognizable as VRBO, which has been around and profitable in the same space far longer.
> Pick a business category that isn't technology or software. Very likely all of the most recent successes in that category were founded outside of silicon valley.
Unless you broaden "technology and software" as a "business category" so broadly as to be meaningless (e.g., to include every business that uses technology or software, no matter what it it actually selling), that's rather dubious.
> 3. At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places.
I suspect this might be overrated though. In SF you're competing against a lot of people looking for these people, in the midwest or east coast, not only is a lot of talent untapped, but you're competing against fewer people trying to get that talent.
It's totally overrated. There are new grad CS majors literally everywhere in the world. Only in San Francisco can they demand $130k [1] right out of school, and get it.
That's not even greedy...at $3500 a month for the median one-bedroom apartment, even the lowliest employee should be demanding $140k for a job here.
[1] This is not a brown number. It's a salary that I know real, non-exceptional new-grad engineers are getting, in San Francisco, today.
From rational standpoint, it would make sense for a good software engineer to move to SV to hedge their career in case things don't work out as planned with the employer.
A laid off software engineer will probably have simpler time finding the next gig in SF than Tulsa.
You threw in a comment about vibe at the end and I agree with you but I think you are underselling it. I think vibe energizes to a very large degree (and is not a Bay area exclusive).
I lived in LA for fifteen years and there was always a sense in the air that your life could change with a chance meeting at a coffee shop. You always wanted to be prepared for that chance. While LA might be (still mostly but changing) about the entertainment industry the same I think can be said about all the large West Coast cities. Opportunity is around the corner. Entrepreneurship is in the air.
I have noticed that vibe in New Delhi, London, Barcelona, and the West Coast where I grew up. I distinctly did not feel it in Spain outside of Barcelona or in Paris. In New York there is a distinct energy but with so much going on there I cannot tell if it is entrepreneurial energy. Same with Tokyo. Where I reside in the Midwest I have to go to meetups to find something close to it but it isn't the same.
(There are so many more places I want to travel!)
Basically, when I am around that vibe I think it unleashes an extra level of creativity within me. That is why I visit as much as I can.
San Francisco, Portland and Seattle companies are advertising open positions all over the planet.
While SFO may have a good talent base, those engineers already have jobs. Fewer and fewer people are willing to relocate not just because the rent is so expensive but because housing is largely unobtainable for any price.
I would love to live in San Francisco but not now. Perhaps after the crash comes.
2. The hockey stick is mainly needed to deal with impatient investors, not in itself. If you had a stable supply of money, you could grow over any number of years, but without showing the right graph its hard to raise money.
3. At least in SF you have a pool of clever engineers or cofounders. Its not like that in all places.
I think it really depends on what kind of company you are building. If its something startup oriented like APIs, or any fad (like IoT), SV is your place. If you're in a capital intensive business, SV is again you place. If you're solving problems for tech companies.. then again. And if its social, you'd be cool if you're in SV and backed by an SV firm. You need the networking and coverage to succeed, and its much easier to come by in SV.
If you're making enterprise software, real hardware products, SMB tools and apps, then you can be anywhere else really.
Besides, SV has that startup vibe going for it. Its not quantifiable but it sure energizes to some degree.