10 ms·

I'm anticipating that some people will misunderstand Brin's advice which is caused by 2 factors: (1) Page and Brin started Google Inc successfully in SV so it

by jasode 10y ago

I'm anticipating that some people will misunderstand Brin's advice which is caused by 2 factors: (1) Page and Brin started Google Inc successfully in SV so it seems contradictory to advise others not to start a company there (2) the meaning of the word "start" as Brin is using it As for (1), Larry and Sergey had the luxury of building Google (the product -- not the formalized "incorporated" Google Inc) inside of Stanford and therefore using the university's computers and bandwidth for free. Piggybacking on Stanford's resources to create an "mvp" was like getting "AWS" for free. A lot of startups don't have that situation. Therefore, a founder may be better off working out the parents' garage in Kansas to keep expenses low. The free room & board is money that would have been spent on a crappy apartment in SV. Instead take those savings and use it to pay for the AWS hosting costs, or a 2nd programmer. For (2), I think Brin is talking about "start" as in start from zero with an idea on a paper napkin, before an MVP, and before traction from others (users and investors). Zuckerberg started Facebook in Boston and after Sean Parker got interested, he moved Facebook to the more expensive SV. Bill Gates started Microsoft in Albuquerque, New Mexico and made profits before he moved the company to the more expensive Seattle. In other words, you can have a "low profile startup" in your local town that's under the radar which lets you keep expenses very low. You can later have a "high profile startup" in Silicon Valley where the very high costs are worth it to hire from the talent pool and network with other entrepreneurs and investors. That delayed move to SV is what Brin called "that second step".

lafay 10y ago
I'm sure free access to 1998 Stanford servers and bandwidth was nothing like getting AWS for free. And a lot of startups these days do actually get AWS for free -- or at least the first $100K.
- jasode 10y ago
  >free access to 1998 Stanford servers and bandwidth was nothing like getting AWS for free. I wasn't comparing 1998 Stanford technology to 2016 AWS as if it was apples to apples. The "AWS" was a modern analogy to give an idea of what they didn't have to spend money on compared to other startups. In 1997, if you didn't have a university to host your (potential business) website, what were the options? You could call up one of the IBM/HP/Origin managed data centers and have them rack some servers. But that costs money, and requires a contract, etc, etc.
  - monort 10y ago
    Rackspace launched in 1998, I think there are were dedicated server providers before them?
    - dkersten 10y ago
      I think the point is that this was very expensive.
      - monort 10y ago
        $99 per month https://web.archive.org/web/19981212020629/http://rackspace.com/ https://web.archive.org/web/19981212020629/http://rackspace....
        meat_fist 10y ago
        You've missed the point.
  - hinkley 10y ago
    When NCSA was bringing you the World Wide Web and the University of Illinois millions in NSF grants and industry partnerships, and accolades and thank you's from vice presidential candidate Al Gore, all the work was being done in the nearly windowless basement of the old Oil Chemistry Building. The university charged NCSA for the privilege of occupying the tenth shittiest building on campus. And we joked about what other crappy building they'd gift us when they finally got around to giving us the space we had requested. Their definition of building us new space was to build a building for someone else and give us their hand me downs. And of course they owned all the IP and charged a pretty big tax on all of the income. I'm fairly certain we brought in almost as much money as the football program (who got a stadium upgrade the same year class sizes were increased to save money). I have no illusions of Stanford having a more generous program. All that free stuff isn't actually free.
- edvinbesic 10y ago
  You're not disagreeing with him. Thing is, even if you get AWS for free, you're better of minimizing your living expenses and spending that extra money on other aspects of your business to get it going.
drzaiusapelord 10y ago
From a Machiavellian perspective, Google competes in hundreds of market niches with competitors constantly nipping at its heels. It certainly doesn't want more competition. Brin doesn't need a 5 man startup hurting Google, so he's politically motivated to give advice that benefits him best. That Kansas startup with zero dollars isn't a threat to Google, and makes for a cheap acquisition if they do develop something interesting or threatening. It certainly is a threat when its backed by SV money, can scale quickly, and isn't available to buy for peanuts. I've always been skeptical of the whole "advice from billionaires" format. Brin isn't motivated to help startups the same way Warren Buffet isn't giving away hot stock tips or how Gates never gave the FOSS community an easy way to reverse-engineer the doc format. These people know how their bread gets buttered. Or simply have internalized protectionist attitudes and give away just enough to not be dangerous to themselves. edit: I'm not necessarily projecting malice, but there are other reasons why "advice from billionares" is kinda a bullshit format. Brin may be out of touch or, if you read the source of the article, made an off-hand comment he probably doesn't worry about all night and is blown out of proportion by the 'give us the latest hot investing tip' crowd.
- geebee 10y ago
  Could it be that now that Google is no longer able to retain staff through a no-poach collusion, its CEO is instead trying to discourage other businesses from setting up shop in a place where they might be able to hire developers away? That's cynical, but I'd say we have the right to be somewhat cynical after reading those emails.
  - drzaiusapelord 10y ago
    Excellent point. Another nail in the coffin for the "altruistic billionaire." Those poaching emails are one of the rare behind-the-scenes glimpses we get of the world that people like Jobs and Brin live in. I would not be surprised if poaching concerns are foremost for the higher ups at these giant tech companies.
- uola 10y ago
  > I've always been skeptical of the whole "advice from billionaires" format. Me too. But it's not like it's unfounded advice. The things you need to start a company (time, knowledge, morale) are all significantly more expensive, and therefor less accessible, in SV.
nojvek 10y ago
I've always wondered how much of the money YC seeds to its founders eventually ends up in a landlord's pocket? $3000/month on a studio apartment. That's crazy burnout for a startup.
- no_flags 10y ago
  Wasn't there talk of building YC dorms at one point?
  - sliverstorm 10y ago
    Doesn't really solve the problem, you have to buy out the landlords to get the land.
    - superuser2 10y ago
      But then you (rather than the landlords) can pocket the rent increases.
      - sliverstorm 10y ago
        Yes, except the sale price will probably have a good portion of expected future rent increases "priced in". (I'm not saying you won't make any money at all)
- kabdib 10y ago
  Remember who really got rich in the gold rushes of the 1800s? Not the miners.
  - bazqux2 10y ago
    Samuel Brannon established his tool monopoly by diverting church money and using thugs to keep out the competition. Once he made his money he lost it all in real estate speculation and a divorce.
hodgesrm 10y ago
Brin's advice rings true to me. Silicon Valley has changed since Google started. It has become a tough place to bootstrap a company from scratch especially if you are focussed on getting to profitability at an early stage. Expenses in Silicon Valley are high and show no sign of declining. Even more important it is hard to find qualified staff in SV who are interested in working on start-ups that don't have strong funding. Most companies therefore look for a somewhat lower cost place with qualified engineers and have done this for a while now. At some point you have to ask why not just put the whole company somewhere else.
- hinkley 10y ago
  I had a contract run out last fall and was surprised by the number of companies who have moved to Seattle and brought their tech stacks with them. It's got a broader reach than ever now, I think. And your choice of neighborhood has relaxed a bit, if you hate commuting. Even the east side/west side split is breaking down (.Net downtown now, and Java in Bellevue)
  - hodgesrm 10y ago
    Just out of curiosity is it easier in Seattle to meet the conditions I mentioned, namely keeping expenses reasonably low and getting qualified staff? Housing and technical employment currently look like seller's markets in Seattle. For example, if you take numbers from comparison tools like www.numbeo.com cost of living in Seattle is not much less than SV locations like San Jose.
    - hinkley 10y ago
      It's certainly getting worse. I get sticker shock in my own neighborhood now and I only bought 5 years ago. But I do think it's possible to make half the salary in Seattle and still not spend 40+% of your income on housing. But I haven't rented in a while and I've heard it's getting harder. The thing is that if you know how to live frugally, being in an expensive town for a while can work in your favor, as long as you promise yourself you'll take the money and run. If you meet Mr or Ms Right before you get out though you may well be in trouble.
madengr 10y ago
"Therefore, a founder may be better off working out the parents' garage in Kansas to keep expenses low." Not to mention you can get Google Fiber in parts of KS, but stuck on dial-up or DSL in areas of SV.
- bobsil1 10y ago
  Dialup in SV? Where, the mountains?
  - madengr 10y ago
    Not sure, I believe San Jose, but was talking with a guy last week who was looking into wireless service since he was in a broadband desert. He was shaking his head as I have Google, ATT, and CCI all competing for 1G/1G service in my area of KS. http://overlandpark.maps.arcgis.com/apps/Viewer/index.html?appid=6bcbc6cfa5fc4907a0a65076d2247c3a http://overlandpark.maps.arcgis.com/apps/Viewer/index.html?a...
tenkabuto 10y ago
You don't speak to this exactly, but Brin might as well just suggest to not start a company in California, which demands a lot of legal and tax paperwork to be done right from a business's beginning.
- hodgesrm 10y ago
  For tech companies that paperwork is really not that big a deal. First, you need to get tax and governance stuff right no matter where you start if you plan on taking funding later on. Second, basic company setup is kind of a wash between California and Delaware. (At least that's the advice I have gotten in the past.)
  - xiaoma 10y ago
    Not really. Look at Facebook.
    - vidarh 10y ago
      Complexity of basic company setup is low enough that it's basically a wash. Delaware has benefits later, due to legal environment and tax, but the main benefits of Delaware won't matter to you until you get big.
fapjacks 10y ago
People have taken your example and run with it, but as someone from Kansas, I implore you not to start a business in Kansas. The governor has run what little infrastructure existed into the ground. There is nothing for you there. I'd suggest somewhere like Austin, where taxes are sufficiently low, the city has a supply of tech workers, and the city has working infrastructure.
- __derek__ 10y ago
  Or Phoenix, which the founders of Tuft and Needle recently recommended[1] and is cheaper than Austin. [1]: https://m.tuftandneedle.com/if-you-re-building-a-startup-you-need-to-move-to-phoenix-not-silicon-valley-a7505318cd45#.6mxfajm1c https://m.tuftandneedle.com/if-you-re-building-a-startup-you...
  - popdoit 10y ago
    Cheaper than Austin. But less talent...way less talent.
    - __derek__ 10y ago
      For now! I'm not a cheerleader for Phoenix (I've been once and had a pleasant visit), but I do think it's well-positioned given its anchor university's commitment to experimentation, weather, cost of living, and reasonably good access to outdoorsy activities.
- muzz 10y ago
  Markets figure these things out. Not sure why people feel the need to convince markets / market participants, unless they somehow don't like the decisions that those have made.
  - fapjacks 10y ago
    Okay. Go for it! Start a business in Kansas. I'm just some guy on the internet.
  - 10y ago

by jasode 10y ago

lafay 10y ago

I'm sure free access to 1998 Stanford servers and bandwidth was nothing like getting AWS for free. And a lot of startups these days do actually get AWS for free -- or at least the first $100K.

jasode 10y ago
>free access to 1998 Stanford servers and bandwidth was nothing like getting AWS for free. I wasn't comparing 1998 Stanford technology to 2016 AWS as if it was apples to apples. The "AWS" was a modern analogy to give an idea of what they didn't have to spend money on compared to other startups. In 1997, if you didn't have a university to host your (potential business) website, what were the options? You could call up one of the IBM/HP/Origin managed data centers and have them rack some servers. But that costs money, and requires a contract, etc, etc.
- monort 10y ago
  Rackspace launched in 1998, I think there are were dedicated server providers before them?
  - dkersten 10y ago
    I think the point is that this was very expensive.
    - monort 10y ago
      $99 per month https://web.archive.org/web/19981212020629/http://rackspace.com/ https://web.archive.org/web/19981212020629/http://rackspace....
      - meat_fist 10y ago
        You've missed the point.
- hinkley 10y ago
  When NCSA was bringing you the World Wide Web and the University of Illinois millions in NSF grants and industry partnerships, and accolades and thank you's from vice presidential candidate Al Gore, all the work was being done in the nearly windowless basement of the old Oil Chemistry Building. The university charged NCSA for the privilege of occupying the tenth shittiest building on campus. And we joked about what other crappy building they'd gift us when they finally got around to giving us the space we had requested. Their definition of building us new space was to build a building for someone else and give us their hand me downs. And of course they owned all the IP and charged a pretty big tax on all of the income. I'm fairly certain we brought in almost as much money as the football program (who got a stadium upgrade the same year class sizes were increased to save money). I have no illusions of Stanford having a more generous program. All that free stuff isn't actually free.
edvinbesic 10y ago
You're not disagreeing with him. Thing is, even if you get AWS for free, you're better of minimizing your living expenses and spending that extra money on other aspects of your business to get it going.

drzaiusapelord 10y ago

From a Machiavellian perspective, Google competes in hundreds of market niches with competitors constantly nipping at its heels. It certainly doesn't want more competition. Brin doesn't need a 5 man startup hurting Google, so he's politically motivated to give advice that benefits him best. That Kansas startup with zero dollars isn't a threat to Google, and makes for a cheap acquisition if they do develop something interesting or threatening. It certainly is a threat when its backed by SV money, can scale quickly, and isn't available to buy for peanuts. I've always been skeptical of the whole "advice from billionaires" format. Brin isn't motivated to help startups the same way Warren Buffet isn't giving away hot stock tips or how Gates never gave the FOSS community an easy way to reverse-engineer the doc format. These people know how their bread gets buttered. Or simply have internalized protectionist attitudes and give away just enough to not be dangerous to themselves. edit: I'm not necessarily projecting malice, but there are other reasons why "advice from billionares" is kinda a bullshit format. Brin may be out of touch or, if you read the source of the article, made an off-hand comment he probably doesn't worry about all night and is blown out of proportion by the 'give us the latest hot investing tip' crowd.

geebee 10y ago
Could it be that now that Google is no longer able to retain staff through a no-poach collusion, its CEO is instead trying to discourage other businesses from setting up shop in a place where they might be able to hire developers away? That's cynical, but I'd say we have the right to be somewhat cynical after reading those emails.
- drzaiusapelord 10y ago
  Excellent point. Another nail in the coffin for the "altruistic billionaire." Those poaching emails are one of the rare behind-the-scenes glimpses we get of the world that people like Jobs and Brin live in. I would not be surprised if poaching concerns are foremost for the higher ups at these giant tech companies.
uola 10y ago
> I've always been skeptical of the whole "advice from billionaires" format. Me too. But it's not like it's unfounded advice. The things you need to start a company (time, knowledge, morale) are all significantly more expensive, and therefor less accessible, in SV.

nojvek 10y ago

I've always wondered how much of the money YC seeds to its founders eventually ends up in a landlord's pocket? $3000/month on a studio apartment. That's crazy burnout for a startup.

no_flags 10y ago
Wasn't there talk of building YC dorms at one point?
- sliverstorm 10y ago
  Doesn't really solve the problem, you have to buy out the landlords to get the land.
  - superuser2 10y ago
    But then you (rather than the landlords) can pocket the rent increases.
    - sliverstorm 10y ago
      Yes, except the sale price will probably have a good portion of expected future rent increases "priced in". (I'm not saying you won't make any money at all)
kabdib 10y ago
Remember who really got rich in the gold rushes of the 1800s? Not the miners.
- bazqux2 10y ago
  Samuel Brannon established his tool monopoly by diverting church money and using thugs to keep out the competition. Once he made his money he lost it all in real estate speculation and a divorce.

hodgesrm 10y ago

Brin's advice rings true to me. Silicon Valley has changed since Google started. It has become a tough place to bootstrap a company from scratch especially if you are focussed on getting to profitability at an early stage. Expenses in Silicon Valley are high and show no sign of declining. Even more important it is hard to find qualified staff in SV who are interested in working on start-ups that don't have strong funding. Most companies therefore look for a somewhat lower cost place with qualified engineers and have done this for a while now. At some point you have to ask why not just put the whole company somewhere else.

hinkley 10y ago
I had a contract run out last fall and was surprised by the number of companies who have moved to Seattle and brought their tech stacks with them. It's got a broader reach than ever now, I think. And your choice of neighborhood has relaxed a bit, if you hate commuting. Even the east side/west side split is breaking down (.Net downtown now, and Java in Bellevue)
- hodgesrm 10y ago
  Just out of curiosity is it easier in Seattle to meet the conditions I mentioned, namely keeping expenses reasonably low and getting qualified staff? Housing and technical employment currently look like seller's markets in Seattle. For example, if you take numbers from comparison tools like www.numbeo.com cost of living in Seattle is not much less than SV locations like San Jose.
  - hinkley 10y ago
    It's certainly getting worse. I get sticker shock in my own neighborhood now and I only bought 5 years ago. But I do think it's possible to make half the salary in Seattle and still not spend 40+% of your income on housing. But I haven't rented in a while and I've heard it's getting harder. The thing is that if you know how to live frugally, being in an expensive town for a while can work in your favor, as long as you promise yourself you'll take the money and run. If you meet Mr or Ms Right before you get out though you may well be in trouble.

madengr 10y ago

"Therefore, a founder may be better off working out the parents' garage in Kansas to keep expenses low." Not to mention you can get Google Fiber in parts of KS, but stuck on dial-up or DSL in areas of SV.

bobsil1 10y ago
Dialup in SV? Where, the mountains?
- madengr 10y ago
  Not sure, I believe San Jose, but was talking with a guy last week who was looking into wireless service since he was in a broadband desert. He was shaking his head as I have Google, ATT, and CCI all competing for 1G/1G service in my area of KS. http://overlandpark.maps.arcgis.com/apps/Viewer/index.html?appid=6bcbc6cfa5fc4907a0a65076d2247c3a http://overlandpark.maps.arcgis.com/apps/Viewer/index.html?a...

tenkabuto 10y ago

You don't speak to this exactly, but Brin might as well just suggest to not start a company in California, which demands a lot of legal and tax paperwork to be done right from a business's beginning.

hodgesrm 10y ago
For tech companies that paperwork is really not that big a deal. First, you need to get tax and governance stuff right no matter where you start if you plan on taking funding later on. Second, basic company setup is kind of a wash between California and Delaware. (At least that's the advice I have gotten in the past.)
- xiaoma 10y ago
  Not really. Look at Facebook.
  - vidarh 10y ago
    Complexity of basic company setup is low enough that it's basically a wash. Delaware has benefits later, due to legal environment and tax, but the main benefits of Delaware won't matter to you until you get big.

fapjacks 10y ago

People have taken your example and run with it, but as someone from Kansas, I implore you not to start a business in Kansas. The governor has run what little infrastructure existed into the ground. There is nothing for you there. I'd suggest somewhere like Austin, where taxes are sufficiently low, the city has a supply of tech workers, and the city has working infrastructure.

__derek__ 10y ago
Or Phoenix, which the founders of Tuft and Needle recently recommended[1] and is cheaper than Austin. [1]: https://m.tuftandneedle.com/if-you-re-building-a-startup-you-need-to-move-to-phoenix-not-silicon-valley-a7505318cd45#.6mxfajm1c https://m.tuftandneedle.com/if-you-re-building-a-startup-you...
- popdoit 10y ago
  Cheaper than Austin. But less talent...way less talent.
  - __derek__ 10y ago
    For now! I'm not a cheerleader for Phoenix (I've been once and had a pleasant visit), but I do think it's well-positioned given its anchor university's commitment to experimentation, weather, cost of living, and reasonably good access to outdoorsy activities.
muzz 10y ago
Markets figure these things out. Not sure why people feel the need to convince markets / market participants, unless they somehow don't like the decisions that those have made.
- fapjacks 10y ago
  Okay. Go for it! Start a business in Kansas. I'm just some guy on the internet.
- 10y ago