New start-up hubs challenging Silicon Valley - study

The Democrats do not have a majority in the House, the Republicans do. And the Democrats do not control enough of the Senate to be immune to the threat of filibuster.

You are contradicting yourself, regardless. You are arguing that higher taxes will kill those seeking to bootstrap companies -- but if people are bootstrapping and have no income, they pay no taxes, and they most certainly aren't being hit by the only tax increases that are now being discussed: those on high earners making over $200k. It doesn't affect them.

Cost of living really doesn't matter that much to tech startups. If it did, everyone would be rushing to rural Nebraska to bootstrap their startup. In reality, you can find cheap rent anywhere, even SV, you just have to compromise on space and housing/location quality.

He's talking about the California legislature, not Congress.

http://graphics.latimes.com/2012-election-results-california...

> The Democrats do not have a majority in the House, the Republicans do. And the Democrats do not control enough of the Senate to be immune to the threat of filibuster.

Trying reading my post again:

> The Democrats got a supermajority in the state House and Senate

And this:

> You are arguing that higher taxes will kill those seeking to bootstrap companies

You really need to work on your reading comprehension. Read this again:

> The cost of living is high and the taxes are high, with the former being an obstacle for bootstrapping a startup, and the latter being an obstacle when your company grows in size.

It's the high cost of living that will kill bootstrapping companies, not the high taxes.

> Cost of living really doesn't matter that much to tech startups. If it did, everyone would be rushing to rural Nebraska to bootstrap their startup.

You've made a common logical fallacy. People aren't "rushing to rural Nebraska to bootstrap their startup" because the high cost of living is a pill worth swallowing considering the networking benefits in SV. That is, there's a net benefit to being in SV vs. being in rural Nebraska. However, like I said in my first post, this is not something inherent to SV - it's just a matter of where the people and companies happen to be at the moment.

Moreover, you've resorted to reductio ad absurdum here. I clearly stated in my first post that a good option in the Midwest for founding a startup would be a medium-sized city like Kansas City, not "rural Nebraska".

> In reality, you can find cheap rent anywhere, even SV, you just have to compromise on space and housing/location quality.

Which means that if you "compromise on space and housing/location quality" in a place with a lower cost of living, you'd get even cheaper housing. Another common logical fallacy.

Chattanooga, TN (which already has 1Gig fiber deployed throughout the city) is definitely heading in the same (right) direction. The cost of living is drastically cheaper, and the quality of life with easy access to mountains, rivers, lakes, shops, cafes, etc can be drastically better. The drawbacks of course are obvious; hiring enough talented people, smaller city environment, relocation, creating connective tissue with other startup people/ funders to create network effects. But, if you're build a product, service, company and don't immediately have a product-market fit, this environment allows you to stay alive longer, which can allow you to find success, whereas your seed funding or quick-market play would have died and dried up in more expensive towns.

The advantage of the existing hubs is the difference between a continuous vs. discrete labor market.

If you want a Scala + NoSQL + NLP full-stack expert with 10 years production experience with the JVM and 2 years as a product manager, and you want such a person to start in 3 weeks, you can find that in California-- for some price. In Madison, there are still a lot of great people, but not the massive number of technical people that makes it likely that you'll find an ideal match.

If you can't afford any hiring latency and have strict requirements, you need to be in a hub. All that said, I think these grow-fast-or-die efforts are pretty stupid. If something adds genuine value and isn't just trying to first-post some obvious idea, does it really need to grow at 20% per month?

Also, a lot of these work that startups are doing isn't that complicated and doesn't require the level of people they think they need. I hate that social-climbing useless selectivity of needing awesome people to do mediocre work, largely because these startups lie about their intentions and I'm one of those "awesome" (?) people they're looking to court (and then underemploy on their mediocre idea).

The continuous-market effect goes both ways: if your startup goes belly-up in California, you'll have 4 interviews in a week. If you hauled ass out to the Midwest and that happens, you'll probably have to move again for your next opportunity. Also, some cynical realism: it's harder to start a bidding war (which is how most people get their best jobs) in Minnesota.

The rest of the country has quality people and companies, but not the critical mass of them that creates a continuous market. Investors generally aren't comfortable launching a business in a place with a discrete labor market.

I'd love to see a better distribution of opportunity. It'll (a) generate more eligible places to live, and (b) lower the rents for those of us who stay. However, I think that's a really hard problem to solve, because technology has become so specialized that very few regions are big enough to support a continuous labor market.

Honestly, I'm a major fan of the Midwest: a lot of really great people are out there, and they have no idea what they're worth and what they could do in technology. That said, I tend to think the advantage of the hubs is vast. I'd probably move to California myself (as opposed to #2 New York) if it weren't for strong family reasons to stay here.