Why You Need to be in Silicon Valley
startupboy.com
startupboy.com
harvest, carbonmade, blip.tv, boxee, college humor, clickable, 20x200, hello health, OMGPOP, seamless web, squarespace, stocktwits, vimeo, etc., etc., etc.
There's a good list here:
http://www.mikekarnj.com/blog/2009/12/21/new-york-startup-mo...
But, if you summed the market caps of all these companies, what would you get?
My guess is $2-5 billion.
Now Google alone is worth ~$200B.
I agree that you can start a really successful Internet company in NYC. I'd say any city in the U.S. would do. However, if you have some pathological urge to build a gigantic Internet company, you absolutely need to be in Silicon Valley.
Being in the valley is definitely a boon, but calling it a must is silly. Those guys combined have a market cap of $343 billion. The other end of the bullshit-spectrum is people pretending that it doesn't make a difference because they don't want to move.
That said, all startup successes are statistical anomalies. The implicit irrational assumption is that you can beat the odds. Some companies beat harder odds than others, and being outside the valley does set them up for that.
There are lots of reasons one might not want or be able to move -- visas, family, other attachment to a particular place -- and that just has to become part of the calculation, "This makes it x% more likely that I'm just wasting my time, but I'm still [irrationally] convinced I can beat those odds."
We know that this works because there are examples of it. We also know that it's harder because of how relatively few there are.
If all you have is a "me-too"|yet-another-Twitter-client that appeals only to the geek crowd, and has no viable business model, Silicon Valley is the place to be. Especially if you want to burn through early capital living in one of the most expensive locations in North America.
If you want to make a point, you should think of the average company that succeeded, and then see where that company did succeed. For every Google, Intel and Microsoft, there are thousands of startups that did attain success, but did not become giants (not because they failed to become giants, but because few companies are destined to become giants).
...with a US passport.
Crikey, you are nearly giving me flashbacks to high school. I was speaking to an admissions officer from Harvard and, after answering his questions about myself, he asked me whether I had a question for him. I asked "Well, you know, I probably have a bit of ability to pick where I go to school. Why should I go to Harvard?" I remember his response exactly: "If you can get into Harvard, why would you go anywhere else?"
That line convinced me not to apply, on the theory I'd have to spend four years of my life with people who thought like that. (Which, come to think of it, is one reason I would not love to live in Silicon Valley.)
Never mistake advantage for necessity.
Startups thrive and wither in the Valley, just as they do anywhere else. Silicon Valley can be a useful card in your hand, but the flop is more important.
Silicon Valley lets you do that over any other geo, hence
why it makes the most sense.
Startups in the Valley are never more than a couple degrees of separation from someone who's made money in tech, or has friends who did. There's a level of comfort with tech startups that doesn't exist elsewhere. Though there may be plenty of rich people in other areas, they don't have the familiarity with tech to risk their money on a startup when they could buy real estate or whatever.
she also touches on some cultural differences between NYC and CA:
But what NYC is actually missing is not engineers. In NYC you can find lots of great engineers, visual designers, and great publishers and contributors to social media. But in CA I seem to find far more people with multiple skills - engineers who blog and dabble in design, designers who can do great UI but also great UX, etc. These multidisciplinary people are the ones who hack together brilliant new stuff, can innovate across the board, see various avenues of attack, and are indispensable at startups. It is these hybrid people that we are always looking for at Hunch and for whatever reason find them much more often in CA than NYC.
Caterina Fake's real complaint is that she can't find one person to do three jobs at once for her at Hunch, which isn't surprising.
The cachet of a Valley presence, while helpful to us for fundraising, hurt us when dealing with our target customer (the government). So now we're in the slow process of moving back East.