You should have moved to Oakland. There's plenty of cheap real estate there, and it's on BART.
Our Startup Would Probably Die If We Were In San Francisco
11–20 of 70 posts
Re: Our Startup Would Probably Die If We Were In San Francisco
#12Counterfactuals are very hard to know. At CircleCI, being in SF gave numerous advantages early on. We had multiple paying customers in the first two office buildings. We had multiple customers within walking distance, and many more within cycling distance. Being able to talk to real customers using the app was extremely valuable. Customers aside, there are tons of people willing to help, either through advice or intr…
"Not every developer in SF is as mercenary as you make it sound. For your first employee hire, you might find a single person living in an apartment in SF vs. a family man in St. Louis who has to pay for day care and save for college. Their salary requirements might be comparable."
This is based on a ridiculous premise:
1) That a highly paid professional in a city BRIMMING with recruiters and cool new companies throwing themselves at them isn't going to respond to market pressures and/or "the shiny new company" effect when you reach a certain growth point
2) That a "family man in St. Louis" will cost something comparable due to this odd concept unique to flyover country of having a family.... oh wait, people in the Bay Area have kids too.
I'm sorry, but there is a huge amount of delusion in San Fran about the advantages of physical proximity. I'm not idiotic enough to believe there aren't huge advantages, but it seems as if there is absolutely no point (that HN folks are willing to acknowledge) where the cost of being in San Fran and having to pay your talent at grossly inflated rates actually MORE THAN CANCELS OUT the benefits.
Re: Our Startup Would Probably Die If We Were In San Francisco
#13The problem is that the massively funded SF/SV start-ups will create the "scorched earth" regime for the bootstrapped ones: try moving to St. Louis and compete with a AirBnB from there? If you get traction, you will have to get VC money, which means moving back to SF or NY.
Why do VCs require companies to be in the city they are in? Can someone please explain this? We are talking about an industry whose product is supposed to transcend physical space, but we have to be located in an ultra expensive city to get funded? Where is the logic?
Re: Our Startup Would Probably Die If We Were In San Francisco
#14The problem is that the massively funded SF/SV start-ups will create the "scorched earth" regime for the bootstrapped ones: try moving to St. Louis and compete with a AirBnB from there? If you get traction, you will have to get VC money, which means moving back to SF or NY.
Why do VCs require companies to be in the city they are in? Can someone please explain this? We are talking about an industry whose product is supposed to transcend physical space, but we have to be located in an ultra expensive city to get funded? Where is the logic?
It's the same logic in requiring employees to work in the office. It isn't necessary valid, and likewise it's probably slowly eroding over time (probably due the high costs referenced in the article).
Re: Our Startup Would Probably Die If We Were In San Francisco
#15You should have moved to Oakland. There's plenty of cheap real estate there, and it's on BART.
Is there actually "plenty of cheap real estate" in Oakland?
Re: Our Startup Would Probably Die If We Were In San Francisco
#16Counterfactuals are very hard to know. At CircleCI, being in SF gave numerous advantages early on. We had multiple paying customers in the first two office buildings. We had multiple customers within walking distance, and many more within cycling distance. Being able to talk to real customers using the app was extremely valuable. Customers aside, there are tons of people willing to help, either through advice or intr…
If you're selling products to developers, it is helpful to be in San Francisco. But if you're selling non-developer products to businesses, it can be unhelpful, because you want a diversity of clients and because tech companies have NIH objections at a scale that normal enterprise customers don't.
The subtext of your point about the STL person having kids is a little icky. You might want to reframe that point.
Re: Our Startup Would Probably Die If We Were In San Francisco
#17The problem is that the massively funded SF/SV start-ups will create the "scorched earth" regime for the bootstrapped ones: try moving to St. Louis and compete with a AirBnB from there? If you get traction, you will have to get VC money, which means moving back to SF or NY.
Why do VCs require companies to be in the city they are in? Can someone please explain this? We are talking about an industry whose product is supposed to transcend physical space, but we have to be located in an ultra expensive city to get funded? Where is the logic?
Everything we do as human beings (pretty much) is all about people. So think in people terms, not purely resource or financial terms.
People like proximity, they like being able to pop in and see other people. Distance is friction from a business point of view. Just as we see friction in applications as bad, so do business people see friction in business as bad. Distance is friction.
I'm bootstrapping in the UK, I love SF and would love to be there (at least part of the year!), there are a lot of advantages to having that much contact with other startups.
However, interestingly I notice that people who do what suits them best often seem to overcome geographic and financial obstacles. So I certainly wouldn't want to recommend or even suggest one way as better than the other.
You've got to balance what's right for you with what is right for others.
On a completely different note it would be great if we could swap the word 'funded' with debt everywhere it's used :-) The two words have very different connotations but mean the same thing (unless someone is just willing to GIVE you money :)) I think the word debt helps people to make more sober judgements.
Re: Our Startup Would Probably Die If We Were In San Francisco
#18Re: Our Startup Would Probably Die If We Were In San Francisco
#19This comparison is impossible to do in any quantifiable sense. The cost savings for leaving SF are quantitative (low rent. lower taxes. etc). The perks for staying in SF are much more abstract (better networking. increased visibility). I don't mean to imply the SF perks aren't worth it, but they will only be quantifiable in hindsight at best.
Re: Our Startup Would Probably Die If We Were In San Francisco
#20I've thought a lot about this and I feel like it makes sense pre-seed to do this. Save the cash, invest it in the business, and then when you raise money move to San Francisco/Bay Area. It's really tough to grow outside of SF, I feel like. But if you're bootstrapping yourself... Then I can't see many reasons to come to SF.
Why is it tough to grow outside of SF? There are plenty of successful internet businesses that are not based in San Francisco.