Why to Move to a Startup Hub
paulgraham.com
Why to Move to a Startup Hub
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Re: Why to Move to a Startup Hub
#2"if you have a good investor who has committed to fund you if you stay where you are, you should probably stay. Finding investors is hard. You generally shouldn't pass up a definite funding offer to move."
What if you have definite funding from someone who wants you to move?
PG used a similar argument style in Hackers & Painters to show that some languages are better and Lisp is the best. Reduce it, then refine it. "Rural areas are clearly very bad"=="basic is clearly very bad", then "SF is the best"=="Lisp is the best".
It's funny because we're in Boston using Python, the roughly #2 spots in cities and languages.
Re: Why to Move to a Startup Hub
#3An interesting analysis would be to reduce this to actual numbers: what is the increase in likelihood that you'll be funded in SF vs. Boston?
Re: Why to Move to a Startup Hub
#4An interesting analysis would be to reduce this to actual numbers: what is the increase in likelihood that you'll be funded in SF vs. Boston?
How can that reduction occur without normalizing for the quality of the team and idea?
How can you quantify quality of people and potential of an idea?
Re: Why to Move to a Startup Hub
#5An interesting analysis would be to reduce this to actual numbers: what is the increase in likelihood that you'll be funded in SF vs. Boston?
i'm not sure you could get an apples to apples comparison. each opportunity is too unique.
Re: Why to Move to a Startup Hub
#6Ah, looks like I saw this one coming :) http://news.ycombinator.com/item?id=62976
Re: Why to Move to a Startup Hub
#7An interesting analysis would be to reduce this to actual numbers: what is the increase in likelihood that you'll be funded in SF vs. Boston?
How can that reduction occur without normalizing for the quality of the team and idea? How can you quantify quality of people and potential of an idea?
I suppose you could look at a number of successful companies, where they started out, and where they eventually got funding.
I'm pretty sure you'll see lots of companies starting outside SV, moving to SV to get funding, and then succeeding.
These numbers would be interesting.
Re: Why to Move to a Startup Hub
#8Earlier quoted context omitted.
How can that reduction occur without normalizing for the quality of the team and idea? How can you quantify quality of people and potential of an idea?
I suppose you could look at a number of successful companies, where they started out, and where they eventually got funding. I'm pretty sure you'll see lots of companies starting outside SV, moving to SV to get funding, and then succeeding. These numbers would be interesting.
Unfortunately, there's a confounding variable: people know SV is a good place to start a startup (even if they aren't as sure as pg), so more startup starters will start up there, anyway.
Re: Why to Move to a Startup Hub
#9Earlier quoted context omitted.
I suppose you could look at a number of successful companies, where they started out, and where they eventually got funding. I'm pretty sure you'll see lots of companies starting outside SV, moving to SV to get funding, and then succeeding. These numbers would be interesting.
Unfortunately, there's a confounding variable: people know SV is a good place to start a startup (even if they aren't as sure as pg), so more startup starters will start up there, anyway.
Those that moved to SV compared to those that didn't is still an interesting metric.
Re: Why to Move to a Startup Hub
#10There are many factors to consider in evaluating the value of a move. Depending on the nature of your startup, it may be more or less valuable to make the move to the Valley.
Here's a few factors that seem relevant to that evaluation.
1. Access to capital
If your company has large upfront capital requirements, then being in a setting with VC's who aren't afraid to take a risk has obvious benefits. However, a lot of web 2.0 startups have relatively low starting costs. You can self-finance the development and launch of a product which attracts a rapidly growing userbase. The main cost isn't even monetary, its opportunity cost. With this done, attracting VC interest is a lot easier, regardless of where you are.
2. Access to talent
Naively, the Bay Area has a lot more talent than other locations and this makes it a better place to do a startup. Problem is, the competition for talent is a lot tougher. If you're a startup in a place with relatively few startups, you have a real shot at attracting the top programmers locally, because you're the only game in town. In the Bay Area you're competing against Google, Facebook and all the rest.
I'm in Waterloo, Canada, and this is evident locally. Waterloo has a terrific undergrad CS program - supposedly, its Microsoft's number one recruiting School - and lots of really talented developers. But there are relatively few Web 2.0 companies in town, which means that startups have (if they're willing to work at it) access to an amazingly talented pool of potential employees, and a real shot at hiring those people.
I don't think one even needs a top CS school locally. My background is as a theoretical physicist, and my observation is that at least in theoretical physics the quality of the top students is pretty much the same everywhere. I'd be surprised if there was much difference in CS. There will be more extraordinary programmers in the MIT CS program, but they will still be there at Podunk State University, and if you're careful and aim high, you'll have a real shot at getting those people onboard.
3. Culture
I don't mean art and a nice orchestra. I mean access to a "can-do" culture, full of sharp people who are plugged in, full of the latest news, insightful (and original!) analysis, and can act as role models, mentors, advisors, and so on. Really sharp criticism and suggestions are worth their weight in gold.
This is something where the Startup Hubs have a major advantage. It also seems to me perhaps the biggest advantage of the YC program - the dinners and other events. In places that are less of a Hub it seems to me that you need to consciously build a really wide network of people who can act in that role for you. This requires work anywhere, but it is a lot harder in somewhere without a startup culture than it is in the Valley.
4. Access to other companies
For some startups it's really important to have access to other companies for partnerships, distribution and so on. For others it's much less important. Obviously, in the former situation being in a Hub has a major benefit, while in the latter situation it is less so.