Why Startup Hubs Work • Hacker News Board

Re: Why Startup Hubs Work

#11

Post by flipside » Wed, Oct 05, 2011, 8:17 PM UTC

Speaking as a nanoengineer now doing a web startup (in SF for 2 weeks now), this is just the way the world works.

Startups and nanoparticles can spontaneously form anywhere under the right environmental conditions, but they can just as easily break up in isolation. But if the local concentration is high enough, something magical happens. Even when a person or a molecule jumps ship, another one fills its place almost instantly. Suddenly, these things are "stable" but not only that, they can grow, sucking up bits from the surrounding environment and merging with others.

Critical mass, in SV it's the right kind of people, in nanoengineering it's the right kind of molecule, either way, once it gets going, you just hang on for the ride.

*http://en.wikipedia.org/wiki/Critical_micelle_concentration is one nanoengineering example but there are others.

Re: Why Startup Hubs Work

#12

Post by kul » Wed, Oct 05, 2011, 8:18 PM UTC

gregwebs wrote: post #5

For example, you start a site for college students and you decide to move to the Valley for the summer to work on it. And then on a random suburban street in Palo Alto you happen to run into Sean Parker I thought that was the fake movie story, and in real life Sean Parker went after Facebook, flying to Harvard to meet Zuckerberg and eventually convincing him to come to Silicon Valley.

I think the flying out to meet Zuck part is true, but it's also true that he later bumped into him that summer in Palo Alto (not sure if they'd stayed in touch).

Re: Why Startup Hubs Work

#13

Post by tgrass » Wed, Oct 05, 2011, 8:19 PM UTC

As the low hanging fruit disappear, the type of veteran knowledge each entrepreneur requires will change.

Right now issues like effective user interface are being solved and are general enough across disciplines/markets that the results can be shared by everyone for everyone. But as internet startups specialize in finer and finer ways, focusing their products and services on smaller and smaller niches, the struggling entrepreneur will require an equally specialized knowledge. Startup towns have been ideal for sharing the knowledge of how to run an internet startup, but when that knowledge becomes more common and less geographically constrained, I'd wager we'll see Sector Specific regions ascending.

Re: Why Startup Hubs Work

#14

Post by kul » Wed, Oct 05, 2011, 8:21 PM UTC

I remember writing about this for the BBC (to some British backlash) way back in January 2007, when Harj and I decided to leave London for the Valley.

http://news.bbc.co.uk/2/hi/business/6355289.stm

Funny - I mention a chance encounter helping us a lot (meeting FB's head of data at a party), and then the vibe being optimistic and ambitious (and we were working out of the then Twitter office in South Park). We did also bump into Ron Conway one morning on the way back from kickboxing.

Re: Why Startup Hubs Work

#15

Post by rdl » Wed, Oct 05, 2011, 8:24 PM UTC

The Internet is the biggest startup hub of them all. IRC, topic specific mailing lists, places like HN, etc.

99% of all good ideas in computer security were discussed on the cypherpunks list in the 1990s. I'm sure there are or were other subculture groups online equally useful.

Re: Why Startup Hubs Work

#16

Post by pitdesi » Wed, Oct 05, 2011, 8:30 PM UTC

I think the world has changed drastically in the past few years...

I can provide perspective from working for a startup in SF in 06-07 and a startup in Chicago now... In Chicago noone thinks you're unemployed if you say you work for a startup. That was the case a couple of years ago, but with Groupon and a TON of other companies that just isn't the case. The difference is just that more people are doing startups in SF vs. consultants/bankers/fortune 500 workers... Go to a bar here and girls think it's so damn cool that you are running a startup (apparently girls are obsessed with all things geek - http://www.chicagobusiness.com/article/20110924/ISSUE03/3092...).

Re: the coffeshop thing- just by chance (ie we didn't know this going in and it is NOT the startup hub area within Chicago), within 3 blocks of FeeFighters office are: 37signals, SproutSocial, Threadless, Crowdspring, and several other startups. I don't see how it helps us significantly to bump into them (though we have helped our neighbors when they've had merchant account issues). Many people think it is a wasteland anywhere not the valley but I have seen that not to be the case here, in New York, and even in Pittsburgh.

So what is the difference between here and there? The largest differentiator I've noticed between the valley and elsewhere is funding. We raised most of our money in Chicago from VC's we really like, but could have raised easier on the west coast. A lot of top VC's prefer to have you close and told us flat out they would fund us if we moved there. We had term sheets dependent on us being in Austin, SF, and LA. I don't think it has had an effect one way or another on our business thus far.

Startups need money, and often flock to where it is. Things are changing all over the place though (Rich people in Chicago all of a sudden want to fund startups, will be interesting to see if that continues post-Groupon IPO)

It also depends on your type of business. If you sell mainly to startups, you should probably be in the valley.

Re: Why Startup Hubs Work

#17

Post by pg » Wed, Oct 05, 2011, 8:30 PM UTC

RavneetG wrote: post #10

For the last paragraph in that post, the Valley is different (from NYC,Boston etc) in that it is NOT the hub of anything else...other cities are metropolitan areas of various things going in in them...unlike valley, where there is only a very narrow band of activities that thrive...

Yes, that's true.

Re: Why Startup Hubs Work

#18

Post by rdl » Wed, Oct 05, 2011, 8:30 PM UTC

"willingness to help people out" would seem to suggest NYC, LA, and DC will be forever handicapped. NYC seems to be overcoming this through bei great in other ways, but LA/entertainment culture seems the antithesis of startup culture, although both constantly create new things from ideas.

This all makes thhe demise of Boston even more stark and sad. It had every advantage except weather!

Re: Why Startup Hubs Work

#19

Post by revorad » Wed, Oct 05, 2011, 8:36 PM UTC

Tiny typo: "from being the business" should probably be "from being in the business".

Re: Why Startup Hubs Work

#20

Post by pg » Wed, Oct 05, 2011, 8:36 PM UTC

yahelc wrote: post #6

This is a good piece, but, this is well-trodden ground. This is "economies of agglomeration", and it's basic urban economics. http://en.wikipedia.org/wiki/Economies_of_agglomeration

I didn't mean to suggest that no one realized it was helpful to be surrounded by a lot of people working on the same things. I've written about it a couple times myself. The surprises for me were in the details. E.g. that with startups, people are more willing to help out their peers than in more zero sum fields, and that you need that extra margin of help because startups fail by default.