Former Sequoia partners: The Midwest is the future of startups
venturebeat.com
venturebeat.com
YMMV obviously, but if you dismiss most of the rest of the continent as "geographically uninspiring" you're going to miss out on a lot.
KS? sheesh.. no way man
If you're living in a city, your day-to-day lifestyle is going to be pretty much the same anywhere in the US, or really anywhere in the developed world.
Yes, that includes Kansas City.
I like not having to own a car.
I noticed that too. I miss that part of the Midwest as well. I am on the East coast now and here people are too aggressive and competitive, even without an obvious reason to be so. I mean they are still genuine, just genuine in their open hostility so to speak.
They say these are just stereotypes and are not accurate, but I don't know, seem to jive pretty well to what I noticed.
The bay area is way overcrowded, poor infrastructure, way, way too expensive, and if you want to get out of town for the weekend you fight traffic for 4 hours.
I understand california dreaming... it's been the best marketed state for decades.
But its' just a dream.
1) Work in Silicon Valley. You earn 30% more but pay 200% more in rent. It takes you 10 years to save a $200k down payment, and in the meantime you have lost 100s of 1000s of dollars on rent.
2) Work in the Midwest. You earn less but pay a third for rent. It takes you 5 years to save a $200k down payment. You then lateral to SV.
Ok, I'm biasing the question. But personally I'd prefer to delay gratification rather than delay homeownership.
You can save that down payment in 5 years probably. With higher incomes come higher saving margins.
With lower house prices, you also need a lower percentage down. My credit union says you can do 3% down on up to $625k of loan. 3% down may not be the best idea, but waiting until you have 20% down can be a lot of waiting if you'd like to buy a house here. Putting a small amount down, means you do have to pay mortgage insurance (which wasn't very expensive in 2009 when I put 10% down), but it gives you a lot of flexibility.
If the recession deepens, and you lose your job and the housing market tanks, you can stop paying your mortgage, foreclosure is slower than eviction for not paying rent, and most California foreclosures are nonjudicial where the lender can take the house, but has no claim against any of your other assets. If you resume employment during the foreclosure process, you may be able to cure the default.
If you stay employed, you will hopefully at least get cost of living raises, while everyone else's housing costs are going up, yours will be flat -- you can put some of the raises into paying down your mortgage to get a more comfortable equity situation (and get the mortgage insurance removed). When the economy starts to recover and bring housing prices with it, you'll get some equity that way too.
In life, there's more than home ownership.
And, yeah, as much trouble as I have with NC politics, I would take North Carolina in a heartbeat over pretty much anywhere in Kansas.
BTW I make my own BBQ so I have all I need.
I find that Silicon Valley's proximity to mountains and bodies of water to be overly confining, and I place 90% of the blame for its housing prices on the Bay Area's geographical restraints. Great Plains cities don't have to worry about that because they can just sprawl outwards; geographically-restrained cities have to get expensive and/or get dense when there's a huge influx of population.
Let's pop onto Google Maps and check out some of these cities at the same zoom level (caveat: I'm using a maximized Chrome window at 1080p, so if you're on anything else it might not display the area I intend):
The Bay Area: https://www.google.com/maps/@37.6179156,-122.1933201,11z -- notice how almost everything is developed in this narrow little strip around the bay. Only in San Jose do you see any real development inland, and it's honestly not that much compared to cities in other parts of the country. Really, even if you could sprawl more inland without hitting mountains, you'd still have massive bottlenecks commuting to anything in SF because it's on a peninsula.
Kansas City: https://www.google.com/maps/@39.1155568,-94.7391727,11z -- it's spread out, and it's got more than enough room to grow outwards for quite a while. If it becomes a hub or something, it can just keep growing out to relieve the pressure.
Columbus was the picture in the article: https://www.google.com/maps/@39.9312081,-82.8231266,11z -- not as big as KC yet, but check out that room to grow!
The Twin Cities, mentioned as a former tech hub in another comment here: https://www.google.com/maps/@45.0593467,-93.2436588,11z -- big and sprawly, the exurbs are just waiting to be filled in, and there's still plenty of room to grow beyond that
Dallas, my own hometown: https://www.google.com/maps/@32.8116737,-96.9491413,11z -- I can elaborate more since I've lived here for over 30 years. I chose this zoom level because it's the widest one that would fit the whole Dallas area. Built smack in the middle of a prairie, I have seen the suburbs continuously sprawl north and east, plus I've seen the formerly-empty suburbs in between Dallas and Fort Worth fill up like crazy. You can tell the age of certain parts of town because our freeways are built in rings, like a tree. When I was a kid, the two northernmost freeways (President George Bush Turnpike and Sam Rayburn Tollway) didn't exist. Half of Plano was farmland, and the suburbs to the north, east, and west of it weren't considered part of the contiguous metroplex. Now, we've filled in the gaps between Plano and Lewisville, built up Frisco and Allen, brought the contiguous metroplex all the way up to Propser and Wylie, and now we're working on bringing Celina in. Mark my words: in the next five years, they'll start upgrading US 380 to freeway status. And within a decade, the contigious metroplex will reach to Gunter and Van Alstyne. And development to the east will bring Royse City and Forney in as well. House prices are spiking now due to a bunch of companies moving their headquarters to the Dallas area, and creating massive demand out of nowhere, but once construction companies start reacting to that demand, we're going to see a massive explosion in house-building in the exurbs, and house prices will fall back to their old levels once new development is complete. Oh, and the concentric circles model we're using for our roads makes commuting much easier than something like SF where the bay gets in the way of going from one place to another. You can easily reach downtown from the exurbs (and it doesn't matter anyway because most of our tech industry is in the inner-ring suburbs, not downtown).
So if I'm going to take geography into account when moving somewhere, I'm going to prioritize someplace built on a prairie, because that will give me low housing prices and low density.
Kansas City doesn't fall into that category for me.
Keep in mind I'm caveatting my statement by this narrow definition alone. However for many people, this is a major criteria
Flat.
(And are you seriously going with "look how much sprawl we'll have!" as a selling point?)
The drive down to Witchita from Topeka certainly has its own class of wonderful views akin to what you would experience between Heber and Orem in Utah. These are just different scales of horizon, and both are enjoyable.
What would be really nice though, in the Kansas City area, if there was more light-pollution discipline to maybe bring back the experience of seeing the Milky Way again, without a long-ish drive.
FWIW I'm in KC tech sector. If I want to get back to nature I just drive 1/2 hour south to the land that I own, and I make more than those figures touted above. You guys can keep your California.
Sorry, I'm such as scenery snob now, after moving to the Mtn West from the Midwest...
https://www.glassdoor.com/Salaries/chicago-software-engineer...
http://www.payscale.com/research/US/Job=Software_Engineer/Sa...
You see this on HN a lot, someone posts about some guy he knows who's brother's wife's roommate makes $300K at Google, therefore most software engineers in the Bay Area make lots of money. Really?
Senior software developer salaries in Chicago are 97k on average.
https://www.glassdoor.ca/Salaries/chicago-senior-software-en...
Wow!
Isn't it more likely that there are more bad developers on average in SV than anywhere else as they're so desperate they'll take anyone? If I was struggling to get a job as a developer it'd seem like a natural place to go.
You could blame every job loss on startup babble too. "The burn rate was too high so the let our entire team go", "In my 4 month CV gap I was exploring my own idea for a job-sharing-app but failed to find funding", and on and on...
The Bay has a lot of extra draw for really talented developers. For the really good developers it's less about "what job can I get" and more about "what job do I want?". When they have the luxury to work at virtually any company they want, SV is the place to be just by the numbers.
It makes a big difference to students too -- most hot shot developers out of college are going to take an offer from a flashy Bay Area sweetheart over the local healthcare IT shop any day.
I don't think that follows from the comment. You've reversed the causality. The comment was just saying that there's a correlation between better developers and living in SV. Not saying I agree, but it seems likely. Wouldn't it be a self selected group of more driven programmers?
It's easy to find another job, but it's doing some incredibly tedious and boring job for a manufacturing company or something like that.
http://www.bls.gov/oes/current/oes151132.htm
"Metropolitan areas with the highest employment level in this occupation:"
There's only 40K jobs in SV, and if you go on HN reputation you'd think there's only like 3 jobs in all of Chicago, but the actual number is closer to 20K.
As a practical matter it will not matter much if there are 40K jobs or 20K jobs in a legacy geographic location, because my first choice will always be remote anyway.
Given that almost all jobs on a percentage basis are outside SV, by definition your best next job will almost certainly be out of state no matter where you live, in or out of CA.
But your right, number of companies is very relevant, since you interview for a company not a single job opening. 30,000 jobs at 20 companies represents 20 chances, not 30,000 chances.
Even if you interview somewhere the next day, it usually takes a week to get an offer and 2 weeks for the company to get its paperwork straight. Let alone counting the amount of time it takes to find someone actually hiring.
Oh, uh. Wait. I mean there are no jobs here. We definitely do not have tons of nice starter 3br homes under 200K. Do not move here, other experience developers!
Cost of living is rock-bottom (an actual Victorian mansion can be <$500k, and a beautiful rental apartment in one of the uber-trendy small towns such as Pittston can be had for $800/mo), the food is excellent, and there's very easy access to beautiful areas for hiking, biking, and fishing with multiple state parks and campgrounds within a short drive. The healthcare is among the best outside of a major medical center. Public education is generally very high quality, with private high schools, universities, and the medical school essentially free to high-performing or low income students.
Community banks are highly prevalent, and they're very willing to make small business loans to pre-profit companies with sufficient credibility. The area is also remarkably entrepreneurial, to the point where one is lionized for the mere act of forming a company, from a tech startup to a restaurant.
There's also been some solid tech exits, such as Solid Cactus, which was for an undisclosed sum, but they were already raking in annual profit in excess of $2 million.
Same reason Portland and Atlanta punch way above their weight class in terms of food scene.
1. Fiber put down as a deal for letting casinos in. 2. AT&T fiber to compete with google fiber 3. Google fiber
Thing is, when I moved out to Seattle, I fell in love with the West. I love the weather and people out here, whether in northern Arizon, or Washington State.
I'm glad things are looking up at the midwest though.
ADDED: They were tapped to develop what was going to be to the System/360 what it was to prior systems, that got canceled for the obvious reasons, and various of those things ended up in what's now their IBM i (formerly best known as the AS/400), which under the hood is light-years beyond UNIX(TM) and its progeny.
I live in downtown (lower town) st paul, its starting to gentrify as a note though. But thats only if you want to live in the city itself.
For example, there's the observation (see also Levy's Hackers) that a lot of computing industry action shifted from Route 128 to the West Coast. But consider the following:
* Many of those Route 128 companies were started by people jumping from other minicomputer companies. e.g. Data General was started by Edson deCastro who came from DEC.
* I'm not sure how common non-competes were at any of those companies. I certainly was never presented with one. It's true that people had longer careers with a given company but it wasn't necessarily because of non-competes.
* AFAIK, California law around non-competes existed long before the semiconductor boom effectively created Silicon Valley. (It's at least traced to 19th century California business code law.)
* The PC/industry-standard computer cycle was only somewhat related to the Bay area. Intel yes and HP to a lesser degree. But Compaq and Dell were in Texas. Microsoft was in Washington. IBM was in Boca and later Raleigh.
Again, I'm all for weakening non-competes. I could name a couple of companies that IMO use them egregiously. But I do think it's difficult to frame Silicon Valley success as a direct result of California law in that area.
Is that a 3M / isopropyl ether joke?
Wait, it was 2012 and the venture capitalists were /just then/ figuring out it would be a good idea to be close to the "best computer science school in the world"?
Not that I had any respect for VC's before, but my opinion just dropped even more.
> ... entrepreneurs are building more billion-dollar companies in the Midwest than in the last 50 years combined.
Yes it's called currency devaluation combined with ZIRP.
I do wonder if they'll write such a flowery article when entrepreneurs discover that their odds of success actually go UP if they pass on VC altogether.
We've been building a 100% remote startup since late 2011 - it begun in the midwest (Missouri) and it has worked extremely well. We don't even have a location at this point and can't imagine a situation in which we'd elect to.
Life is inexpensive and good in Arizona and occasional flights to Silicon Valley are short and affordable. I spent my life in California until we moved to Arizona 18 years ago. Benefits of Arizona: very friendly people (try chatting with people in California when you are in a grocery store check out line, at the gas pumps, etc. - a culture of unfriendliness), low population density, very affordable housing, clean air and nice climate (at least where I am in the mountains), our state government is not as badly in debt as California, etc.
I've also found that people here are far less afraid to try new and different combinations of just about anything - clothing, food, working with people from different disciplines. It's fascinating.
I'd bet that most of our impressions just come down to the luck of who we met when we lived in these different places. But my experiences definitely don't match yours. (My experiences in Arizona have been unmemorable. People seemed "normal" to me - neither rude nor overly friendly. I'll be going back next month, so we'll see if my impressions change one way or the other.)
How's that work out if you're Hispanic and / or African American?
I would have to strongly disagree that Arizona has "very friendly people". I find it to be the most openly hostile state in the nation, and they seem to pride themselves in that.
Arizona is pleasant in other ways but friendliness is not one of them.
I know many talented software developers and know multiple VCs in the area. This is a hub for top-noch universities, a hub for every major pharmaceutical company, most major financial firms have a large presence here, including the largest mutual fund company. Plus, it is a short trip to New York (media/Wall Street), and DC (government and military), which brings lots of subcontracting projects.
In short, there is a ton of opportunity, talent, and money.
Cost of living here is low. Decent basic house is $150-200k in the burbs.
Awesome office space is cheap. Great tax incentives from KS and MO to start companies and create jobs.
I honestly would have no interest being in the valley trying to compete with the likes of Google, Facebook and others for top talent. In KC we can be the cool company everyone wants to work for!
We are Stackify, located in Leawood Kansas! :-)
The real kicker is ratio of home prices to household income. Schools are good here (no they don't teach creationism), low crime; You have to be nuts to live in SV.
Though even the individual income is higher, so case of high $ SV single brogrammer vs dual income family does not hold.
Interestingly, 66211 is very high with $443k AGI and $177k wage. The $443k AGI must be the the retired execs.
I still love the area so I'm still sticking around for a bit longer, but I don't really see what this guy's seeing.
Nitpicks from the article:
"California is the eighth largest economy in the world. The Midwest is the fifth"
really? source on that? What states exactly does that entail?
"The Midwest receives 25 percent of all research dollars in America and graduates more computer science degrees than any other region or country on planet earth."
source?
"home of the leading computer science school in the world, Carnegie Mellon"
Not one of the leading, but THE leading CS school. Even better than MIT? Better than Berkeley? Better than Caltech? I'm not saying any one of those is THE best, but I would argue they are all top-notch.
Honestly I am glad to hear a VC finally say that Silicon Valley isn't necessarily the best place to start a tech company. The reality is it depends. Maybe SV is the best place and maybe it isn't.
I did the math. I got offers from some prominent bay area startups. They are constantly recruiting me, but none of them can offer a competitive deal on salary (and don't get me started on their "stock options" packages.)
You seem to be projecting your aspirations/desires or preferences and assuming that is the case for everyone else. I do understand that for your first job working for someone like Amazon seems glamorous, but once you've put in a couple years there (and Amazon is a particularly abusive hellhole for engineers) that wears off.
The top talent is not swayed by "name brands" but by places where they can really be innovative.
I can imagine the top MBAs from Midwest universities DO want to go work for these "name brands" because it pads you their resumes nicely.
But hackers? Hackers want to hack. They want to be on the cutting edge.
And that's no longer silicon valley. Hasn't been for awhile. It's just nobody told the people who live in silicon valley, apparently.
I would need to make upwards of $400-500k / year in SF to get the quality of life I get here. Here, there are good school districts, affordable real estate, affordable child care, and low crime rates. No subset of the city perpetually smells like human excrement and trash. I bought a house less than a mile from downtown, and not only can I afford the mortgage, I put 20% down and I can continue to save aggressively. We have a yard substantially larger than a postage stamp. There's a large public park a quarter mile down the street, and a smaller one at the end of my block. My wife can walk to work in ten minutes.
SF is a bustling center of activity in my industry, but it's also a money pit. It's not worth it for me to locate myself there.
I have spent a lot of time interviewing candidates and it is much harder for me to hire than it is for me to go find a job.
I have a nice large home in a quiet neighborhood with easy access to anywhere I want to go. I raise three kids and still manage to invest about 50K a year into retirement every year and so I will retire early with millions saved.
There is so much FUD from everyone that doesn't live here.
Please keep thinking the same way though. If everyone catches on and moves here eventually we really will be the next silicon valley; to that I say, "No thanks."
By the time they were ready, I had finally found something new, but that was after four months (they contacted me when I was 2 months unemployed). I've also had people submit changes in their requirements to recruiters before a phone interview so I was no longer had enough years of experience for them (and I have quite a few), contact me about setting up an interview and then never end up emailing me to confirm a final time, all sorts of stupid stuff that's happened.
I'm at a new company now (in the Chicago area) and even though we've lost four people and we're 'desperate for new developers' according to the boss, we haven't had a new hire in at least six months.
I doubt this kind of crap happens with companies at SV, because they wouldn't be able to hire anyone because other companies would snatch them up too quick.
No, I can assure you that it does happen in SV too. Everyone claims to be 'desperate for new developers' but the proof is in the pudding--lots of places interviewing, few places hiring. Lots of slowness, endless rounds of interviews, and foot dragging.
To throw out some more numbers, the last I got for MIT, which was before a degree from it was perceived as being relatively more valuable in the Great Recession, it received 13,000 applications, 3,000 of which were judged capable of doing the work, and the admissions office aimed for a yield AKA class size of 1,100.
Without some real surveys it's hard to make conclusive statements, but these are the top reasons I hear for why people don't leave Minneapolis for the coasts:
* Housing (and cost of living in general)
* Family and social network
* The Bubble (SF in particular).
* They just love the city and don't feel the need to move.
For me personally housing is the big one.
Is that really that surprising? The Census Bureau defines the midwest to be 12 states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. Their accumulated GDP is 3.6 trillion vs California's 2.4 trillion or approximately 50% more(numbers found on wolfram alpha). But then that is 12 against one, not exactly exciting that the Midwest isn't a third world country.
Not sure how CMU and Pittsburgh ended up there though that is Midatlantic not Midwest. Probably just makes the math more favorable.
Other people have commented on other things, but this statement seems out-of-touch. You realize that large numbers of students at those universities come from Midwestern states, right? That the singular obsession with Silicon Valley is restricted to a very vocal and enthusiastic minority?
Unrelated note, how did PA (CMU) get included in the Midwest. Philly is essentially on the Atlantic Ocean and the Navy used to build warships there. That's hardly any sort of degree of West.
Buffalo and Rochester are also closer to Cleveland than the coast, so I'm not sure that's a great metric.
Anyway, always interesting how terms differ among people
I do agree it's not so much as a "threat" to Silicon Valley as just a greater distribution of technology centers to other regions.
Whether or not that's true, I want to convince them that there's nothing wrong with leaving NYC at this point if they can't find a job.
It is summed up in the last line: "Of the 70 large metro areas we studied, only three have lost financial jobs since 2010."
Relevant to this article, active funds are losing business to passive index funds. Active = NYC; passive "boring finance" = Midwest
Wells Fargo and Bank of America defy your assertion here. In fact, five of the ten largest banks in the US are not in New York. Also, I don't know what you consider "regional", but of the 30 or so US banks that have over $100B in assets, only 8 are in New York City.
Great for lowering that burn rate, plus you're surrounded by the CMU talent pool (Carnegie Mellon is located in Pittsburgh).
Does/will the midwest not have this problem though?
>jobs seem to regularly pay under $100k for senior developers here when the cost of living has gone up dramatically compared to my perception that I could get a decent place for <$1500 / month where I wouldn't have to suffer from a horrible commute - this is patently untrue I've found after spending a month searching for housing (not apartments, admittedly).
You can rent a family home on the north perimeter for around $1700 a month. Not nearly as cheap as some midwest locations but not nearly as expensive as the Bay Area. You also do have the option of having a 40 minute commute and paying a fraction of that in rent. It's a nice option to have on the table especially if your job is located outside the city or allows remote days which is often the case.
I never managed to find a house that was 3br/2ba+ in Brookhaven on up past the perimeter < $2000. It's a bit of a sticker shock for me in rent when the place I bought last year was about $1k / mo mortgage and comparably nice besides a bathroom's upgrades.
Do you often hear people call Vegas "the West Coast"?
Historically (IMO) , "Midwestern" in the US refers to when a city was settled - if it was ostensibly a then-Western fort settlement, it'll be closer to being Midwestern. So it has at least something more in common with say, Cincinnati than with Philly.
Likewise, Roanoake, Va is pretty midwestern while Norfolk is very East Coast.
I've found Colin Woodard's "American Nations" to be a pretty good guide. I think this map comes from that:
http://static.businessinsider.com/image/55b273a2371d2211008b...
Boston, Philadelphia, NY, or NJ, the actual near-coastal cities, felt as "foreign" as when I moved to CA. (not sure if foreign is a good word, I don't mean it to be negative as I loved my move to CA)
I'm sure you are technically correct based on some google map searches, but I had never thought of Pittsburgh as east coast growing up or visiting later in life for Steeler games
Same here, but I never really knew what region to give us. Too East Coast to be Midwest, too Appalachian to be East Coast, too Midwest to be Appalachian.
I always just think of us as being a bit region-less, which I think suits the city and its people just fine.
Pennsylvania is a Mid-Atlantic state, but Pittsburgh is where the Ohio River starts.
As an Oregonian, I always scratched my head when seeing that "Northwestern University" was in Illinois until I realized that at one point, that was the "north west".
http://www.newgeography.com/files/imagecache/Chart_Story_Ins...
Please take some perspective: People on here are literally calling my beloved hometown and place of birth a "Rust Belt."
Even though I'm in Silicon Valley now, the vast majority of my friends and family still live back home.
I wonder if Llama Soft ever feels bad about stealing the name of the still-extant British indy game house Llamasoft for much more boring purposes.
Austin? I dunno if it's really a startup hub or not.
Edit:s/1000/100/stupid fingers...
The amount of money dumped on the area, SarbOx regulation changes, even Enron[1], and the overt abuse of the H1B visa left it crippled relative to what it once was compared to the span of say, 1985 to 2005.
[1] these things came up in funding meetings at various times in the area. "you do know that Enron is Houston, right?" "It's still Texas."
I know of no healthy telecom firms left.
I (willfully) know nothing of gaming.
We've also won a lot of awards lately, including placing on the list of 5000 fastest-growing companies.
But maybe we have different definitions of telecoms. I think, in the present day, any company that does UC and/or cloud networking (we do both) should count as part of "the telecom industry", because they fill the same niche as the traditional telecoms. We've also got IBM SoftLayer and FireHost/Armor here too, plus Amazon has recently opened some offices in Dallas (a good friend of mine interviewed with them for an AWS support job here; didn't get it though).
We almost have to have different versions of what is meant by "telecoms" because it's all changed radically.
The optical business is pretty bleak. It's the last vestige of the more old-school telecoms left. You also see Cisco pivoting these days.
I had the ... special privilege of going to work for Lucent in January when they had 106,000 employees (and an Oracle licence for that many seats). When I left in December they were on their way to a planned 35,000, and were eventually bought by Alcatel. It could have been worse, look at Nortel....
E.g. not only was first it absolutely minimally resourced, it was then not spared company wide layoffs, and they made a point of boasting about laying off one of the most visible and productive members of the team, undoubtedly to show us no one was deemed essential, and also undoubtedly because he was pointing out problems. The project was canceled not all that long after I left, "and the rest is history".
Because you want to sleep close to your money.
"The answer, we concluded, had everything to do with timing. In the first few decades of the Internet, you had to be physically close to your technology. That technology, the talent that built it, and the ecosystem that maintained it was in Silicon Valley."
C'mon. You didn't need to be close to your technology. PCs and servers and backbones can be installed anywhere.
You wanted to sleep close to your money. But now you're willing to loosen the leash a little if it gives you more bang for the buck.
What's happening is that the word is getting out to the engineers: SV is too expensive a place to be, even at GoogleMicroUberAmazon pay rates. The gold rush is over.
Sample size of one, but this is true for me. I'd really like to come back to CA, but I make 6 figures already, and a 3600 sq ft house is only like $400k here. I don't see what SV has to offer except a larger market for opportunities, but I'm in my mid-30's, so I'm worried that I'm not really a target demographic for SV employers.
Microsoft and Amazon, not so much, to say nothing of the majority of other tech companies that aren't well known as the top paying three companies out here.
Nobody wants to work for a startup in Gilroy...
I was just using Skype as an eponym.
This reads like a parody until it inexplicably turns out not to be.
Columbus and Ann Arbor both have big, important universities smack in the middle of town, and the demographics and culture that go with that. If you were choosing the least-surprising towns outside of the Bay Area and NYC to find software startups in, those would pretty much have to be on your list.
Putting a large tech investment in a region that values conservative workplace culture honestly sounds perfect to me. I like my cube farm :)
Put another way:
"Nobody will ever need more than 640k."
Since the days of Fairchild, the bay area has had an advantage in finance, and of course VCs who didn't want to invest in anyone more than a bike ride away. The level of attitude is really kinda astounding.
California was the golden state... but that was 50 years ago when it had a pro-business government and was disrupting the US industrial base, and attracting high tech talent and companies in the process. Now it is eating itself, drowning in debt and getting ever more desperate due to decades of bad government.
In our industry things have changed. The need for VCs is dramatically less. You don't need to build servers and software from scratch, you can rent servers in the cloud and build on open source foundations.
There are always going to be more smart people outside of SV than there are in it. And TBH, I don't think the SV startups have been really innovative for the past couple decades. It's like after the dotcom boom everything became an "app" (instead of a "dot com" eg website).
For example you aren't building Intels and Apples anymore. you're building Googles (Which might become an Apple, if one of its moonshots turns into a product, but it isn't yet, it hasn't weaned itself from search and search's days are numbered.) You're building facebooks and ubers and airbnbs. It may not look like if if you've not been thru a couple bubbles but those companies are more flash in the pan than solid. Facebook could be more properly called a fad.
The difference is they aren't really technology companies. Google invented page rank, but almost nothing fundamental since. Facebook hasn't invented anything really. It's just a popular content site. Uber and AirBnB are business models, not technology inventions. Of course they all require and depend on technology investment, but they are not based on technological innovations like Intel and Apple are. (And don't even get me started on Amazon which is really a combo of Walmart and U-haul-for-computers. They actively oppose innovation.)
And for some high tech industries, Silicon Valley is not the center. The disdain upon which californians look at bitcoin is a good example. It's kinda a "not invented here" syndrome.
It's like we're the internet, you're AOL at its peak. You rule the roost right now, but you don't get it.
Perhaps, but another topic that has been coming up on this site for the past decade is, "X is the new Silicon Valley!", and every time it does there are a lot of people who say Silicon Valley is about to be beaten... and it hasn't happened yet. That's not to say it won't ever, but the track record of these predictions since, oh, the mid-1980's is dismal, and I would say they have a heavy burden of proof to show they're not talking out of their asses.
There are several X that are the new "silicon valley". you just don't recognize them because your pattern recognition is tuned for the current silicon valley.
Several of those predictions, by the way, have come true. Of course if you define "silicon valley" narrow enough you'll never see it. And it seems to me the people in SV do so. (You can always come up with a difference between SV and what ever place and say "see that doesn't qualify")
Also, the attitude and smugness of silicon valley is grating, and its' getting worse as your decline deepens.
The tone, though positive, is quite patronizing to midwestern ears. If you're not investing here, you're missing a huge opportunity.
I can't see any clear revenue path or exit for any tech investment out there, you couldn't even invest in a weed business out there like in Canada or the coasts of the US
What are huge opportunities we are missing?
That's a pretty big incentive.
What metric is that? On what scale is "The Midwest" an economic union?
I read the article now and I won't dismiss the notion, but that still doesn't answer where they are going to get their exits from, and what the bounds of the midwest economic region actually are, to former Sequoia partners.
Note: I also disagree with people lumping the entire Midwest together as a thing. Chicago != Milwaukee != Cleveland != Minneapolis != Detroit, but neither does SF = LA, so not sure how best to aggregate.
I could rebut with the single word earthquakes, was even in Silicon Valley when the 1983 Coalinga earthquake (https://en.wikipedia.org/wiki/1983_Coalinga_earthquake) hit.
Then again, I was also retired to my home town of Joplin when the 2011 tornado hit (http://www.ancell-ent.com/1715_Rex_Ave_127B_Joplin/images/), but one convenient thing about tornadoes is that you only have to walk a few blocks perpendicular to their line of movement to get to undisturbed buildings and such, the aftermath is therefore a lot easier than wide area disasters like earthquakes and hurricanes.
Slipping on the icy stairs in Chicago where I grew up and lived most of my life, before walking to the train and having my glasses frost over from my breath did it for me. Then there are the insane humid summers.
Being able to go outside practically whenever I want and not feeling guilty if I stay indoors was worth moving to the Bay for me. We also have gorgeous long falls here where the leaves change color and everything.
Don't underestimate how many people loathe crappy weather.
What? I'm from Seattle, seasons definitely change there. It's as "west coast" as you can get.
Seriously though, I moved to Seattle from the Southeast, and I actually love the predictability aspect of the weather here. I rotate between the same hoodies for 9 months of the year and never have to check the temperature before heading outside, it's always 50-60ish if it's not summer. So while technically it "changes", it doesn't compare to the rest of country which can have some truly nasty extremes I've never seen here.
The only unique thing about SV is the unenforceability of non-competes, that was clearly absolutely critical in the original silicon days (https://en.wikipedia.org/wiki/Traitorous_eight) and probably sped things up by decades, I've also experienced two good pieced of technology killed by them outside of California, and I'm frankly left without a better explanation.
Depending on who wins out this general election, we will possibly see a rather ironic shift that will not only undermine the hegemony of Silicon Valley, but will also make staffing startups with low cost talent from all over the globe far more feasible. I've been telling Silicon Valley for a while now, be careful what you wish for, because it's easy to lose sight of the real world from within a rose colored bubble.
I have a feeling that as/if globalism were to expand and consolidate power and control, it also broadens, dilutes, and devalues "labor" on a global scale as you start feeling the effects of globalism that clothing makers, furniture makers, auto makers, etc. have all felt before you. The only thing that is keeping the tech industry enslaved to Silicon Valley, is the dependence on their VC masters, as you so well described. Once that is no longer a benefit or necessary or an advantage, what keeps people in Silicon Valley?