The next Silicon Valley is probably going to be Silicon Valley | Hacker News Reader

The next Silicon Valley is probably going to be Silicon Valley

cbinsights.com

32 pointsasanwal23 comments

And a quick Googling of the term “the next Silicon Valley” shows Seattle, Los Angeles, Bangalore, Tel Aviv and even the Brooklyn tech triangle (yes – really) have all thrown their hat into the ring thinking they could be contenders.

I am highly skeptical that LA or New York could be the next Silicon Valley because their costs of living are so high already. If you're going to pay that much for an apartment and want to do a startup, you might as well move to SV already.

Seattle's prices have been rising for years too, and, although it's much less expensive than NYC or coastal CA, building in Seattle is still difficult and expensive.

Austin, Texas is perhaps the most interesting possibility on a cost-of-living basis.

(For more on why this matters, see Yglesias, The Rent is Too Damn High: http://www.amazon.com/The-Rent-Damn-High-ebook/dp/B0078XGJXO).

What about Chicago?

We looked at this as well. Here's a research brief appropriately titled "Chicago is not going to be the next Silicon Valley". If you like graphs and data, the brief illustrates why -- http://www.cbinsights.com/blog/trends/chicago-venture-capita...

Do you think the issue for most regions outside of Northern California is merely a lack of VC money? New York makes sense, as there is just tankloads of money that you won't find anywhere else on earth.

NY has a few things going for it most notably it is seen by many as a "capital of the world".

- People want to live here. Not everyone of course, but if you're young, like a diversity of entertainment options and people, good food, culture, etc (yes - there are downsides). Very few people in the world say "I'd love to live in Boston, Seattle, Portland, etc for a bit to see what it's like". NY has that effect on people.

- Major companies and industries which are being disrupted or enhanced by technology are HQ'd there. Advertising, financial services to name two. If you roll in CT and NJ, you have insurance, pharma, etc.

- Lots of people so if you're doing something on the consumer side, many guinea pigs.

- Lots of money and influential folks here. The whole 1% thing.

- More and more VCs are setting up shop here as well. I think they see a good ecosystem here, and I think many of them don't mind having an excuse to visit NY for business.

I appreciate the insight. Thanks.

That is a bit of an NYC-centric view. Many people do not find it attractive though I am not one of those people.

Oddly, Portland has become an extremely popular and attractive place to a lot of people in the startup community. I know many people in the tech business that have moved there from Silicon Valley and NYC (e.g. Simple, which moved from NYC to Portland). It is an incredibly livable and active city so I understand the attraction. Seattle is also experiencing similar growth and is more cosmopolitan than Portland for people that want more of the international big city experience than you'll get in Portland.

The Cascadia region (Portland, Seattle, Vancouver) has been undergoing a bit of an urban renaissance that has been seeing those cities attract a steady stream of tech talent from other top startup cities in the US. I personally moved there (Seattle) three years ago and it is hard to argue with the quality of life compared to many other cities in the US.

> Very few people in the world say "I'd love to live in Boston, Seattle, Portland, etc for a bit to see what it's like".

Nonsense.

Agreed. Especially for the young people referenced. People are flocking there in droves out of college with very little job prospects and an extremely competitive job market (outside of tech).

Having lived in Silicon Valley as well as some of the other prominent cities listed (and with a startup in Seattle currently), one of the most important things Silicon Valley has that is not found in most other cities is a deep and pervasive software engineering and computer science talent pool that startups can draw from.

That is not to say that other cities do not have talented technologists but that they are rare and/or uninvolved in startups relative to what can be found in Silicon Valley. Consequently, it makes it difficult to build a tech startup in most other cities that can compete with Silicon Valley. Cities like LA and NYC have clear strengths when it comes to things like media but with the experience of having also lived in Silicon Valley it is unfortunately obvious that the average level of software engineering talent and experience available to startups in those cities is noticeably lower than what I was accustomed to in Silicon Valley. This handicaps success.

Seattle is the one real exception in my experience, due to its economy also being driven by several software and tech companies for decades. It is why when I decided to build a tech company outside of Silicon Valley, I did it in Seattle instead places like NYC (which I also considered).

> ...one of the most important things Silicon Valley has that is not found in most other cities is a deep and pervasive software engineering and computer science talent pool that startups can draw from.

I disagree with the notion that it's "difficult" to build a tech startup in most cities outside of the Bay Area, although I would agree that certain types of tech startups, particularly those seeking funding, have very good incentives to set up shop in Silicon Valley/San Francisco.

But to your point about talent, I think the Bay Area is a double-edged sword. Yes, candidates are in theory plentiful, but just about every startup I encounter is hiring and a common complaint is that it's very difficult to find "good" engineers. Is the pool of truly skilled/experienced candidates not large enough to support the ecosystem? Are startups being too picky? I don't know, but I don't see any evidence whatsoever that startups are generally finding it easy to build a team here.

>but just about every startup I encounter is hiring and a common complaint is that it's very difficult to find "good" engineers.

My impression is that standards are higher here. I've worked in the central valley, and most of the jobs I had there? I was... like a little god. My arrogance was justified at every turn.

Here? generally I have to put in at least some effort to just make mediocre, and I simply am not made of the stuff required to be the best.

From that point of view, the salary difference might be justified just on skill.

(I mean, there are very good people living in the flyover. The density is just dramatically lower. I'm arguing here that the average engineer in the silicon valley is much better than the average engineer elsewhere. There /are/ outliers, and often looking for those outliers can be quite productive.)

I think people really underestimate how much Silicon Valley owes to the world-class universities we have here. Without them, we wouldn't dominate tech and biotech. Stanford pumps out CS/MBA/BioTech, Berkeley pumps out CS/MBA/BioTech, UCSF pumps out BioTech. Their influence can not be understated nor easily replicated to other cities even if they have a ton of VC money.

Is Harvard/MIT/BU for Boston any less? I think in addition to great universities, there is definitely something else to SV.

No, and that illustrates his point in a way. Boston has the second largest amount of VC funding, tons of startups, and more institutions of higher learning than pretty much any other metro area in the US [Citation Needed...last I saw it was 84]. But Boston's huge number of universities and hospitals is also one thing that makes it different from Silicon Valley. A lot more smart people can get into PhD programs, so there's a talent drain away from startups.

Actually once the Government severely limits crypto-currencies for the protection of the American people we might find the next tech haven to be outside the USA.

How can the next Silicon Valley be in the USA when one of the major new paradigms in the tech world will soon be entirely banned?

The USA is basically accepting Bitcoins and the like as legitimate currency, with the recent FINCEN guidance and with the various positive results in the courts. I would be more worried about the EU banning BTC than the USA, because of all the issues the Eurozone is having financially, as part of a general effort to prop up the Euro currency and the many failed Eurozone banks.

VC money is a big part of the ecosystem but not everything. For example I'm from Texas and there's a lot of angel activity going on here which isn't captured by VC funding metrics. There is also an emphasis on startups which can be cashflow positive early and not require years and years of VC funding first.

What this analysis didn't include was SV vs. other global hubs; as NYC is the only legit challenger domestically in the medium term, I heard the same about Tel Aviv internationally. It would also be interesting to see how SV's funding proportion holds up over time internationally.

edit for sentence clarity.

I'd say that Toronto has a good chance of stepping up but the cost of living here is also too high.

One of those cases where the title really does say it all.

Ha. Very true. Although, if you look out over the medium-term, NY is making a good case for being a challenger. Massachusetts has really seemingly squandered the advantages it has.

But submitting a tweet on HN is way less cool than writing a blog article...

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