Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet • Hacker News Board

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#11

Post by mindcrime » Thu, May 10, 2012, 1:34 PM UTC

mgkimsal wrote: post #9

“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.” And largely still doing this in just a few square miles in California. Are investors so emotionally tied to one geographic area tha…

Exactly. Every time I hear somebody talk about the "overabundance of capital" in the startup world, I want to grab them by the shoulders, stare them in the eyes and scream frantically like a mad-man "Have you been to RTP (NC) ?!?!??"

OK, not quite that bad, but still, you get the drift. What's happening in California is not necessarily indicative of what's going on in the rest of the world. Research Triangle Park, for example, is FAR from having enough capital freely available, much less too much. Look at the most recent Triangle Startup Factory class... they took, what, six startups out of - IIRC - a hundred and some applications?

Now to be fair, probably not all 100 of those startups are worthy of funding... But I know there were more than six worthy startups in the Raleigh / Durham / Chapel Hill area as of March, 2012.

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#12

Post by jonny_eh » Thu, May 10, 2012, 1:43 PM UTC

mindcrime wrote: post #11

mgkimsal wrote: post #9

“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.” And largely still doing this in just a few square miles in California. Are investors so emotionally tied to one geographic area tha…

Exactly. Every time I hear somebody talk about the "overabundance of capital" in the startup world, I want to grab them by the shoulders, stare them in the eyes and scream frantically like a mad-man "Have you been to RTP (NC) ?!?!??" OK, not quite that bad, but still, you get the drift. What's happening in California is not necessarily indicative of what's going on in the rest of the world. Research Triangle Park, fo…

What's RTP?

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#13

Post by strife25 » Thu, May 10, 2012, 1:44 PM UTC

mindcrime wrote: post #11

mgkimsal wrote: post #9

“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.” And largely still doing this in just a few square miles in California. Are investors so emotionally tied to one geographic area tha…

Exactly. Every time I hear somebody talk about the "overabundance of capital" in the startup world, I want to grab them by the shoulders, stare them in the eyes and scream frantically like a mad-man "Have you been to RTP (NC) ?!?!??" OK, not quite that bad, but still, you get the drift. What's happening in California is not necessarily indicative of what's going on in the rest of the world. Research Triangle Park, fo…

I've been living in RTP for the past 2 or 3 years and continue to get surprised by how many well known developers are in the area.

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#14

Post by strife25 » Thu, May 10, 2012, 1:45 PM UTC

jonny_eh wrote: post #12

mindcrime wrote: post #11

Earlier quoted context omitted.

Exactly. Every time I hear somebody talk about the "overabundance of capital" in the startup world, I want to grab them by the shoulders, stare them in the eyes and scream frantically like a mad-man "Have you been to RTP (NC) ?!?!??" OK, not quite that bad, but still, you get the drift. What's happening in California is not necessarily indicative of what's going on in the rest of the world. Research Triangle Park, fo…

What's RTP?

Research Triangle Park

It's the area where Chapel Hill, Durham, and Raleigh, NC are.

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#15

Post by [deleted] » Thu, May 10, 2012, 1:50 PM UTC

jonny_eh wrote: post #12

mindcrime wrote: post #11

Earlier quoted context omitted.

Exactly. Every time I hear somebody talk about the "overabundance of capital" in the startup world, I want to grab them by the shoulders, stare them in the eyes and scream frantically like a mad-man "Have you been to RTP (NC) ?!?!??" OK, not quite that bad, but still, you get the drift. What's happening in California is not necessarily indicative of what's going on in the rest of the world. Research Triangle Park, fo…

What's RTP?

[deleted]

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#16

Post by mgkimsal » Thu, May 10, 2012, 2:08 PM UTC

mgkimsal wrote: post #9

“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.” And largely still doing this in just a few square miles in California. Are investors so emotionally tied to one geographic area tha…

Replying to my own thread here:

If an investor was watching one of their companies continually chasing a limited resource and paying an ever-higher price for those resources just to keep their business going, wouldn't they counsel the company to change their business model some? Look outside the box? Look for different suppliers to keep the costs down, create a competitive advantage, etc?

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#17

Post by nupark2 » Thu, May 10, 2012, 2:24 PM UTC

mindcrime wrote: post #11

mgkimsal wrote: post #9

“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.” And largely still doing this in just a few square miles in California. Are investors so emotionally tied to one geographic area tha…

Exactly. Every time I hear somebody talk about the "overabundance of capital" in the startup world, I want to grab them by the shoulders, stare them in the eyes and scream frantically like a mad-man "Have you been to RTP (NC) ?!?!??" OK, not quite that bad, but still, you get the drift. What's happening in California is not necessarily indicative of what's going on in the rest of the world. Research Triangle Park, fo…

For us yankees that exist on the "coasts", anywhere outside of NYC, SF, and LA are foreign lands, and somewhere like NC may as well be the moon.

That is a bit unfair, but unsurprising. People choose to work where they want to live, and they'll work with the people they're most familiar with and understand, in the environment around them.

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#18

Post by koglerjs » Thu, May 10, 2012, 2:28 PM UTC

mgkimsal wrote: post #9

“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.” And largely still doing this in just a few square miles in California. Are investors so emotionally tied to one geographic area tha…

There is a naivete here that thinks geographic distance means the economies of disparate locales are disconnected. As the center of the startup scene, that few square miles in California will set the pace for the nation as a whole.

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#19

Post by nirvana » Thu, May 10, 2012, 2:28 PM UTC

mgkimsal wrote: post #9

“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.” And largely still doing this in just a few square miles in California. Are investors so emotionally tied to one geographic area tha…

I really don't understand the over fixation on Silicon Valley. I lived there for awhile. Its got high population density is full of a lot of fake people (people who are happy to "help" your startup for just a taste of the equity), fake investors, and an extraordinary amount of noise. I'm sure there are many people who love it for the same reasons that high pressure finance types love new york city.

But this seems anathema to building a good startup- where you need some isolation some time to focus and to keep a broad and rational perspective, not to be high on each others fumes.

Plus, the bay area is very expensive, it attracts engineers who are more likely to jump to the next hot startup, its hard to find good office space, etc.

It isn't like you can't get broadband everywhere.

And I think people really misunderestimate the importance of good engineers who stick around. Turnover means critical knowledge is walking out the door.

This makes bumfuck Ohio[1] a better place if retaining talent is important. The idea that only Stanford educated engineers are good enough to work at startups is silly. (my experience- finding the best engineers is not correlated with ivy league degrees.)

Bumfuck Ohio may not have the cool meet ups that SV has, but it doesn't have the two orders of magnitude more distractions that SV has as well. Nor does it have the jealousy driven culture where every 4th person has an overpriced show off car, etc.

The reason everyone focuses on the Valley? People are focused on venture capital, not building profitable businesses. Venture capital lives in the valley because for a lot of these VC firms a 90 minute flight to Seattle for a board meeting is just too much effort.

That's it.

[1] Nothing against Ohio, never been there, just picking it for an example.

Re: Why One of Silicon Valley’s Savviest Investors Has Shut His Wallet

#20

Post by yardie » Thu, May 10, 2012, 2:44 PM UTC

nirvana wrote: post #19

mgkimsal wrote: post #9

“Everyone is competing for the same people, going after the same real estate, the same support services,” Hartz says. “The natural resources of the startup world are getting scarcer and scarcer, and the cost is getting higher and higher. It’s all an outgrowth of an abundance of capital.” And largely still doing this in just a few square miles in California. Are investors so emotionally tied to one geographic area tha…

I really don't understand the over fixation on Silicon Valley. I lived there for awhile. Its got high population density is full of a lot of fake people (people who are happy to "help" your startup for just a taste of the equity), fake investors, and an extraordinary amount of noise. I'm sure there are many people who love it for the same reasons that high pressure finance types love new york city. But this seems ana…

Every place has a specialty so I wouldn't say everything happens in SV. They just happen to be more web focused than a lot of other places. Want to do finance computing? NYC. Government and aerospace? DC-Maryland-Virginia metro. Movies and VFX? LA.

Obviously there are outliers, which have a rich cross section of talent, Miami, Chicago, Charlotte. But if you want to get a web-based business up and running and need a deep pool of talent there is no better place than Silicon Valley.