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Starting a Company Outside Silicon Valley Just Saved Me $1.1M

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Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#21

Post by filoleg »

spamizbad wrote: post #11
filoleg wrote: post #2

What about the opportunity cost that he potentially lost by starting his company outside of Silicon Valley? I am not saying that he definitely did, but the fact that OP doesn't mention it at all makes his whole post feel a bit disingenuous. In fact, it reminds me a lot of people who talk about how much money they saved by not going to college and how it is the way to go for everyone, despite studies [of US colleges]…

I think it's wise to ask the question: Where do I/we need to be to build the best team, or the best company? Are you in a domain where you need to hire people that are difficult to find outside of Silicon Valley? If that's the case, it makes perfect sense to found in the valley. Is your business capital-intensive, and funding will be a long-term concern? Maybe SV or NYC makes more sense. Are you entering a domain whe…

I absolutely agree with you. The scenarios you bring up make perfect sense, and I can see why starting outside of SV/NYC in those cases is the way to go.

My main beef with OP is that his whole post has zero nuance and doesn't even look at upsides/downsides. It just preaches his single opinion as the only right way. Just to illustrate how bad it is in my opinion, I got way more useful info on topic out of your single comment than from the whole OP.

Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#23

Post by unignorant »

sontek wrote: post #9
unignorant wrote: post #3

Similar things can be said about starting a company with a fully remote team. I’d estimate we saved much more than $1M for our thirty-person company. An additional benefit is that you can recruit the best talent from anywhere, so long as they have experience working remotely (it’s a bit of a risk to experiement with someone who hasn’t done remote work before). With this setup, I’ve been blown away how easy it is for…

I started my company fully remote but doing payroll in multiple countries is a pain. Have you solved this? I'm limiting my employees to the areas I've already registered with the proper authorities and not hiring in any other locations.

In US we do payroll. For other countries the employees are legally contractors, though still with equity and not treated any differently from anyone else on the team

Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#24

Post by unignorant »

Aloha wrote: post #18
unignorant wrote: post #3

Similar things can be said about starting a company with a fully remote team. I’d estimate we saved much more than $1M for our thirty-person company. An additional benefit is that you can recruit the best talent from anywhere, so long as they have experience working remotely (it’s a bit of a risk to experiement with someone who hasn’t done remote work before). With this setup, I’ve been blown away how easy it is for…

There are some intangibles gained by an office, but I'm less and less convinced that those couldn't be gained as well, by renting a workspace, or hotel function space, loading it up with furniture, and having everyone come in 2-4 times a years for a week or two of inservice, it would still save gobs of money.

We do this as well. It definitely helps build social rapport and trust across the company.

Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#25

Post by joejerryronnie »

maxk42 wrote: post #15
JohnFen wrote: post #8

Personally, I wouldn't start a company in silicon valley. On the whole, it looks to me like the downside of doing that far outweighs the upside.

Elitists from silicon valley will downvote this simply because they don't like having their life choices called into question but you're right: The costs (cost to lease space, cost of labor, business costs, commute, quality of life you can afford for your dollar, crime rate, etc.) far outweigh the benefits (access to talent and VC). If you can bootstrap it yourself or find VC outside of SV, it's typically better to d…

This outlook is just as baseless as the opposite view that all startups have to be in SV.

Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#26

Post by geverett »

unignorant wrote: post #23
sontek wrote: post #9

Earlier quoted context omitted.

I started my company fully remote but doing payroll in multiple countries is a pain. Have you solved this? I'm limiting my employees to the areas I've already registered with the proper authorities and not hiring in any other locations.

In US we do payroll. For other countries the employees are legally contractors, though still with equity and not treated any differently from anyone else on the team

We do the same, and the foreign employees take care of their own tax/benefits. We pay enough that this is worth it to them and makes the admin on the company side much more manageable.

Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#27

Post by JohnFen »

joejerryronnie wrote: post #25
maxk42 wrote: post #15

Earlier quoted context omitted.

Elitists from silicon valley will downvote this simply because they don't like having their life choices called into question but you're right: The costs (cost to lease space, cost of labor, business costs, commute, quality of life you can afford for your dollar, crime rate, etc.) far outweigh the benefits (access to talent and VC). If you can bootstrap it yourself or find VC outside of SV, it's typically better to d…

This outlook is just as baseless as the opposite view that all startups have to be in SV.

All cost/benefit calculations are context-dependent. You're right, it's not possible to accurately make a blanket statement such as "everyone should/should not start their business in silicon valley". All anybody can say is how that calculation works for themselves.

Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#28

Post by geverett »

As someone who started a company outside SV, then moved there for 3 years to grow the company, and has now moved away again - I would say it's well worth it to spend at least some time in the Valley to build a network and understand how deals get done in person.

The density of investors and other founders/early employees in Silicon Valley can't be beat, and I often found myself learning inadvertently - dinner table conversations would be about how people raised their round, the friend of a friend you meet while camping turns out to be a partner at a fund you're trying to pitch. In more cases than are logical or fair, people simply invest in their friends - which means if you make friends there you're increasing the chance you'll be able to raise money easily.

That being said, the cost of living is absurd and I would never hire an engineer in Silicon Valley unless I was building something at the outer limits of frontier tech (and even then I'd scour the globe for qualified engineers elsewhere). And I don't think you need to be there forever. If you build up a solid network you can move away and still reap a lot of the benefits from afar / through occasional visits.

Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#29

Post by froindt »

duxup wrote: post #4

I always assumed the valley focus was because, yeah VC money there, and VCs wanted people close by to help (well if they help), and just generally there are a lot of good people there. By no means are those bad reasons, but not everyone will have those reasons. A calculator seems a bit simplistic but I would generally agree that if there isn't something outright drawing you to that area, you don't have to be there an…

> There was this idea that support just had to be in the valley because straight up the managers and folks working there didn't know there were technical people... anywhere else (this was before we had other islands of tech in the US).

I saw a friend from the Midwest was on the board of a non-profit group. The headquarters was in the DC suburbs, but did no lobbying, mostly verifying credentials and conducting training for professional organizations. The work could be done anywhere.

The other board members were from big cities and openly wondered if anyone "qualified" to run such an organization could be found in a state like Missouri, Iowa, or Nebraska. The concept that there was any skilled professional labor outside of the coasts and large metropolitan areas had to be explained to them.

[Because we're all hicks who just got indoor plumbing at the turn of the century. /s]

By relocating to the Midwest, their rent plummeted, they were able to pay people less while providing the same or better quality of life, upgrade their IT infrastructure and business processes to get away from paper documentation, hired an additional person, and still came out ahead financially.

They were a small organization with less than 10 employees, so adding an additional person was a big proportional gain in productivity.

Re: Starting a Company Outside Silicon Valley Just Saved Me $1.1M

#30

Post by kokokokoko »

Philadelphia is less than two hours from New York. There are plenty of well known and successful startups from New York.

This is more like "Starting a Company in Daly City". Definite clickbait hustle story to drive traffic and sell his product. I wouldn't waste your time on the article.

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