Why Startup Hubs Work

I'm not so sure randomness is the key. Randomness can be also be thought of as "absence of pattern". For me the key question to ask is to ask what role chance plays in formation of startups? Is it really chance or something process we can't yet fathom?

The last paper written by Alan Turing, "The Chemical Basis of Morphogenesis," [0] ~ http://www.dna.caltech.edu/courses/cs191/paperscs191/turing.... attempted to answer the theoretical explanation of the biological process that defines the shape of an embryonic organism from creation. This process is called "Morphogenesis" [1] This is an important problem because complex organisms appear to be created by some "random" process that organises what appear to be self similar cells.

A lot of recent work has been done to experiment Turings ideas on "reaction-diffusion" processes describing morphogenesis in biology and other natural systems to see if a) they can be reproduced in the lab and b) mathematically model them. [2] This begs the question, "what is the Morphogenesis of startups?" and can the same maths Turing used to describe the process be applied to startup formation?

There is a pretty good broad outline of Turing and Morphogenesis in a BBC documentary, "The Secret Life of Chaos" [3] by Professor Jim Al-Khalili on Youtube. [4]

[0] Alan Turing, "THE CHEMICAL BASIS OF MORPHOGENESIS", http://www.dna.caltech.edu/courses/cs191/paperscs191

[1] Morphogenesis, "the Greek morphe shape and genesis creation, literally, "beginning of the shape", is the biological process that causes an organism to develop its shape.", http://en.wikipedia.org/wiki/Morphogenesis

[2] Brandon Keim, Wired, "Alan Turing’s Patterns in Nature, and Beyond" http://www.wired.com/wiredscience/2011/02/turing-patterns/?p...

[3] Jim Al-Khalili, BBC, "The Secret Life of Chaos" http://www.bbc.co.uk/programmes/b00pv1c3

[4] Jim Al-Khalili, et,al, Yahoo, http://www.youtube.com/watch?v=uF7gdlTrCQY

I encourage startups to base their businesses where they'll have the best chance at recruiting the best talent. The next search engine would be well-served starting in the valley, especially if it's an ex-Google team. Similarly, storage companies continue to thrive in and around Boston, as they can draw talent from EMC. New media startups with a heavy emphasis on design-as-differentiator do really well recruiting in NYC.

By this reasoning, it might even make sense to base your web startup in Florida, if your network high-quality development talent is in Florida. I've seen this approach work well in unusual startup geographies, especially when it's a leader of an ex-team that is getting his or her band back together for second (or third) time.

Pick a geography that will play to your recruiting strengths.

The missing piece of the puzzle is real-time online location!

The reason we don't have chance meetings online is that we are not aware of who else is using or reading the same site or app as us in real-time. PG suggests that it maybe because of screen size, but I don't think that's the main problem. The real issue is that unless it's explicitly built into an app, like a chat site, we simply don't know who we are sharing that online space with at any specific point of time.

Imagine if you could say, "Oh I was reading this random blog on Tumblr and was surprised to see Fred Wilson reading it too. Didn't know he was into ASCII art, but had a good chat with him."

I can see Facebook doing this at some point. They are already doing it with music on their site. And they already know which of their users are on a particular site at any given time. It's just a matter of letting the users see that too and interact with each other. Turntable.fm is an outstanding example.

It's bound to freak people out, but it should actually make things more open and real-life like.

The problem of course is establishing true identity, and given that we can't literally see people to know it's really them, we will have to rely on a central identity system like Facebook. A decentralized method of identification would be great but is unlikely to happen.

This is the key. Stumbling into friendships with just a handful of amazing people will change your life by orders of magnitudes. There's a simple probability explanation:

Let's label the group of individuals who are in the top 10% of driven, creative people "Group X".

If Joe and Bob are both in Group X but never meet, their combined total output is 2.

If Joe and Bob meet and become friends, they multiply their output by 1.1 so their new combined output is 2.2:

Joe&Bob = 1.1(Joe + Bob)

2.2 = 1.1(1 + 1)

And exponentially it grows:

Joe&Bob&Sue = 1.1(1.1(Joe + Bob + Sue))

So you can literally calculate the expected value of Joe's output by simply calculating the probability that he will meet a Bob and a Sue and so on...

Joe's Expected Output = 1(1.1 * Prob(Meets Bob)) * (1.1 * Prob(Meets Sue)) ...

The probability of meeting driven, creative people in the Valley only has to be a tiny bit higher to see drastically different outcomes. It's a lot higher, and so we have orders of magnitude discrepancies.