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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

#51

Post by TAForObvReasons »

Nasrudith wrote: post #49
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…

Personally I think ego is part of the issue - VCs don't want to admit they don't always need "the best of the best talent" for their application. Especially if their actual product would still be a turd no matter how polished like Juicero - there is no real sophistication needed there, they just wanted to copy Keurig to get rich.

Personally I think money is part of the issue. It always seemed like an obvious move for wealthy investors to buy properties and area infrastructure, then turn around and rent/sell it to the firms their companies are funding. This is a tried and true model, as recently discussed with WeWork, but only really works if they convince entrepreneurs to stay in one area like the Bay Area

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

#52

Post by true_tuna »

froindt wrote: post #29
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 trainin…

I saw this happen in reverse. I was buying servers from Rackable in orders of several millions of dollars. They bought SGI. Fired their Bay Area support staff, moved support to Ohio which was a huge short term gain. But support became so bad it was literally worth less than nothing. They would take in a machine with a known fault (raid controller let’s say) fail to replace the card, ship back a machine that didn’t boot.

After the fifth failure in a row I had enough. It was easier to learn how to repair my own servers and do the work in-house. I bought parts instead of support, qualified a new server provider and shifted the next six million in orders to them.

No offense against the guys in Ohio, but due to unfamiliarity with the tech, structural and leadership shortcomings etc. they were simply unable to do the job so the work shifted back to the Bay Area anyway.

I’m sure I was one customer among hundreds if not thousands who experienced this change.

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

#53

Post by jedberg »

TheShrug wrote: post #42
Aloha wrote: post #18

Earlier quoted context omitted.

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.

A colleague of mine actually invested in a work/living space for pretty much exactly this purpose. The idea being that the office is rented out completely (not a shared work space) and the upstairs functions as a hotel space. It has fiber internet and it's located in a beautiful place with access to plenty of activities (skiing, hiking, bars, dining). There doesn't seem to be a word for this type of modern "corporate…

Your friend's website is missing an important benefit of being in Incline Village. A whole bunch of people who live in Incline are "Silicon Valley Ex-pats". Because there is no income tax in Nevada, a lot of founders who sell their startup move to Incline just before they get their final balloon payment. The tax savings pays for the extra house. And it's only a 3-4 hour drive (or a 45 minute flight if you had a really good exit) back to SV.

So if you leave the house and hang out in town, there's a good chance of running into a successfully exited founder!

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

#54

Post by aantix »

Sadly, if you're an engineer, those savings aren't passed on to you (obviously).

If you're a software engineer and want to make an amazing salary by most people's standards, move to the Bay Area and get a job with Google/Facebook/LinkedIn/Etc.

You can literally make a 500K+ a year.

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

#55

Post by erikb »

Which is not much, if you could've gotten $500M more in investments.

My experience is the complete opposite of Tim Ferris Wisdoms TM. If you are where the money is at, you have vastly more opportunity to participate on the receiving end of money flows as well as information flows. So if you are a keen developer in SF you will not live on $60k for long, but rather quickly bargain your pay up the food chain to $120k or $150k. And then check out how well you can live on $120k in Thailand, you know?

There are two exceptions to this rule of following the money, though.

Exception 1: When you hit the ceiling. It might be much higher than you initially thought, but there is one. And when you hit it, it might be more reasonable to try to stabilize on that level and find a more peaceful and cheap environment to live in.

Exception 2: When the current location is over hyped. Bay Area might still be in that phase where prices really are too ridiculously high. If you spend more than $60k/year on rent alone then maybe it's not wise to go there for $120k. But it might still be worth an internship or finding customers there.

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

#56

Post by jedberg »

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

> For other countries the employees are legally contractors

How do you actually pay them as contractors? Do you literally just wire them USD or do you some service?

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

#57

Post by true_tuna »

geverett wrote: post #28

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 c…

Where did you move? I’d guess 50% of the people in this thread are open to leaving the Bay Area if we find a location with comparable opportunity.

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

#58

Post by zuhayeer »

sontek wrote: post #10
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]…

What would the opportunity cost? What does silicon valley have that philly doesn't?

Yeah, network, for example a lot of the companies on http://applytroop.com could probably pick his team up later on if they were in the Bay. But the risk becomes having to move again for opportunities.

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

#60

Post by jedberg »

sontek wrote: post #10
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]…

What would the opportunity cost? What does silicon valley have that philly doesn't?

Not being around the valley and not having random run ins with people who can help you. I got one of my best employees by running into her roommate at a birthday party and finding out she's looking for work. I've had other cases of running into people at events that later helped me out. Events I wouldn't have gone to if I didn't live in SV.

Also I've found that a lot of VCs don't want to talk to you if you aren't local, because they don't seem to believe in video conferencing and like to be able to have last minutes meetings. This seems to be changing though.

The key here is that my company is fully remote and my employees don't live here, so they get to take advantage of this purchasing power, while I get the advantages of being SV.

I don't think the whole company needs to be in SV, but it certainly helps if the founder is.

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