I see that smile on your face. You’re lying in bed or stuck in traffic and your brain kicks into action. The promised land. Multi-million dollar valuations. Angels and VC’s in every coffee shop. They’ve been waiting for you and your super-killer idea. You’ve memorized every one of Brad Feld’s or Fred Wilson’s blog posts, been diligent about knowing what’s hot from TechCrunch and have watched the FaceBook movie at least 10 times. YOU ARE READY!
What’s stopping you? Get on the Greyhound bus (like starlet wanna-be’s from years gone by making that trek from Little Town, Missouri to Hollywood) and start your new life now. Silicon Valley is yesterday’s Hollywood. Complete with the over-promise.
Watch the casting-couch.
Last year in the middle of our Accelerator program down here in Raleigh/Durham (then called LaunchBox – now re-launching as Triangle StartUp Factory), I had the opportunity to bring Brad Feld and David Cohen of TechStars fame into talk to about 350 local entrepreneurs. And guess what one of the questions was? Should I move to Silicon Valley to get my startup off the ground?
As is the case in most events like this – Brad took the lead. And I strongly concurred (my head hurt from bobbing up and down in agreement). His retort was in the form of another question – “where do you want to start your company”? Brad challenged everyone to think of where they can get the most support during the very tough early years. You see, there is no magic land where your success is greatly enhanced by the very fact of you being there. Yes, there are clearly more investors per capita in the valley. There are also more entrepreneurs per capita too.
For a second, let me go to the opposite end of the spectrum merely for effect. Would I advise someone to start their technology/software company in Rocky Mount, NC (sorry Michael Raeford)? No. But there are some very good reasons and plenty of mojo in robust 2nd-Tier markets. What do these markets look like?
Here are a few:
• Large University presence
• Existing Fortune 100 presence in your industry
• Some minimum level of capital flowing that is appropriate to your industry
• Organizations (loosely defined) that have passionate followers that create energy
Going forward, I strongly believe that the 2nd-Tier markets have benefits that outweigh the Valley, Boston, NY phenom. I too was inspired 5 years ago by Rich Karlgaard of Forbes in his book Life 2.0. A few highlights of these benefits include:
• Significantly lower cost of living
• Relatively easy plane access to key cities
• Bandwidth (a no brainer today compared even to 5 years ago)
• Access to relevant talent.
So, lets’ get back to the answer you are looking for. Your answer – where do you want to build the next great company? My answer – I am here, aren’t I?
It is certainly frustrating that so many people are vehemently opinionated on this topic. It adds noise without adding much signal. I think it all comes down to a few factors:
1. Where do YOU want to build it? (and where CAN you?)
2. Do you have the networks to plant your feet?
3. What is the nature of your business? Sales focused? Then less important. Product focused? Then likely more important. Marketing? Not clear
4. What are your fundraising needs for SEED stage? Later stages can be more location-agnostic, for high-risk seed stage – location matters more.
5. Are you fundamentally building something better, or something new? Location matters more for new, less for better.
Ultimately the most important factor for ANY startup: Where will you and your team find and sustain the best momentum?
I think the answer is a solid “it depends.” Clearly there are advantages to starting in Silicon Valley or New York. Access to funding might be the most obvious. But I think the Raleigh / Durham / Chapel Hill / RTP area has some nice advantages of it’s own.
It’s also important to realize that there are “existence proofs” that you can start a startup here and be successful. Look at Red Hat, if nothing else.
Anyway, my take is Chris’s (or whoever wrote this post): I’m here, so I guess I’ve made my declaration about how I feel about this. 🙂