20 ms·

Former Sequoia partners: The Midwest is the future of startups

175 points by vollmarj 10y ago

s_baby 10y ago
Any reason why midwest and not southeast? The outskirts of Raleigh and Atlanta have the same cost of living benefits while having access to a large talent pool and being close to the coast line/major cities.
- devonkim 10y ago
  I've worked both coasts equally in my career and have found that despite cost of living differences, wages for the top 25 percentile are quite compressed compared to SV or NYC. Furthermore, there is a rash of jobs that are primarily cost-cutting measures from companies based out of more expensive areas, which puts you at a kind of career positioning disadvantage. Case in point, when I was at HP in the Seattle area we had an office in Cary - it was primarily for QA, not for our platform developers that were more important to continued success of the product. I'm finding the same trend in Atlanta and even fintech 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).
  - s_baby 10y ago
    >Furthermore, there is a rash of jobs that are primarily cost-cutting measures from companies based out of more expensive areas, which puts you at a kind of career positioning disadvantage 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.
    - devonkim 10y ago
      With my experiences with the F500s cutting IT costs, most onshore outsourcing was going directly to Texas and the Southeast for what appeared to be specific state-driven tax advantages - only with one or two sites did I see going somewhere like IN, OK, or KS usually due to existing assets there. Based upon more anecdotal info based upon Indeed results, in proportion to the population, there are potentially more and better software jobs as well as greater legacy of older-generation tech companies mentioned elsewhere in the thread from, say, Indiana and Ohio (Xerox). There's also healthcare companies in the midwest like CERNer that would result in some more (admittedly, IT primarily rather than software) tech jobs. Furthermore, Walmart seems to have a pretty solid number of technology jobs that aren't network and storage janitor work. 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.
- notadoc 10y ago
  The southeast is really nice, I would agree.
PaulHoule 10y ago
At this point in time the advantage of SV is not for the "angel" sized company, but for scale-up from the $1M to $1B range. (i.e. Y Combinator would not have a huge advantage in being there except for the fact that the next round of funding is available there)
- Hydraulix989 10y ago
  Yes, you can rent a 1 bedroom in Pittsburgh, Pennsylvania for the same cost as a parking spot for your car in SF. Great for lowering that burn rate, plus you're surrounded by the CMU talent pool (Carnegie Mellon is located in Pittsburgh).
sharemywin 10y ago
Columbus, OH is a big food test market. Why because it's got a large cross section of "middle america". If you can make something work here you can probably make it work anywhere. I think if more on demand companies were started here they could have adapted and/or blown up a lot faster. If you want a niche that caters to rich people go to NY and/or CA. If you want something the "average" american will buy try selling it here.
- derwiki 10y ago
  Having one of the largest public universities in the U.S. also makes it a good test market.
dang 10y ago
We changed the baity title, happily in time to preempt the unproductive argument it probably would have led to. If someone can suggest a better (more accurate and neutral) title, we can change it again.
- vollmarj 10y ago
  Yeah, I just posted with the word for word title that was on venture beat. Thought that was best practice, but I see what you mean.
  - dang 10y ago
    You did fine, though you could also have changed it, since the guidelines say "Please use the original title, unless it is misleading or linkbait." When we change titles for that reason we always try to use a representative phrase from the article itself (e.g. a subtitle or leading sentence) but I had trouble finding one here.
  - vollmarj 10y ago
    How about this: "Former Sequoia Capital partners believe the Midwest is the future of startups"
    - dang 10y ago
      Ok let's go with that.
Hydraulix989 10y ago
Great article, except Pittsburgh, Pennsylvania is not midwest, it's East Coast. (I'm from Pittsburgh, born and raised)
- coev 10y ago
  If a ~7 hour drive from the beach is considered "East Coast" then Vegas is prime waterfront real estate.
  - sophacles 10y ago
    I think the parent meant "east coast region". 7 hr drive to the beach sounds lovely compared to my 12-14 hours.
    - Hydraulix989 10y ago
      Except I never heard anyone call Vegas midwest.
      - deleted 10y ago
        [deleted]
      - dllthomas 10y ago
        Why would you? The midwest isn't anywhere near there - it doesn't extend much (if at all) into the Western half of the US. Do you often hear people call Vegas "the West Coast"?
- ArkyBeagle 10y ago
  Pittsburgh is somehow less East Coast than is Philadelphia. Philly is an original-13-colonies port town; Pittsburg was (for them ) way west . 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.
deleted 10y ago
[deleted]
sailfast 10y ago
This article is hilarious. "Did you know that there are smart people in this place called the Midwest that can also code and find product / market fit? Who knew!?" The tone, though positive, is quite patronizing to midwestern ears. If you're not investing here, you're missing a huge opportunity.
- cloudjacker 10y ago
  Can you elaborate? 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?
  - joshmanders 10y ago
    > Everywhere we looked, the data supported our conclusion that today entrepreneurs are building more billion-dollar companies in the Midwest than in the last 50 years combined. That's a pretty big incentive.
    - cloudjacker 10y ago
      > California is the eighth largest economy in the world. The Midwest is the fifth. 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.
      - joshmanders 10y ago
        I don't know, I'm a programmer in the Midwest and not a investor. But judging by Sequoia's track record, if they think my area is a good place to start investing, I'm gonna accept their notions as pretty accurate over mine.
      - sailfast 10y ago
        You keep mentioning exits - are you talking about being close to a network of partners that will BUY your portfolio companies, or being close to companies that can exit / go public / etc? A large number of exits have occurred in the Midwest over the past few years. Payments, Enterprise Software, Aerospace, finance, etc. What concern is there about a shortage of exits or exit source? It sounds like I'm missing a very valid concern. 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.
joezydeco 10y ago
"Why weren’t top-tier VC firms spending time in Ann Arbor, Indianapolis, Minneapolis, Columbus, Chicago, Detroit, Kansas City, Pittsburgh, and St. Louis?" 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.
- Hydraulix989 10y ago
  On the flip side, in the Internet's nascent days, you HAD to get an in person meeting with the VC before convincing them to part with a 5 or 6 digit sum of money. Skype was not really possible on a 56k modem.
  - joezydeco 10y ago
    Well of course you had to meet in person to get business done. 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.
    - cgearhart 10y ago
      > SV is too expensive a place to be, even at GoogleMicroUberAmazon pay rates. 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.
      - Hydraulix989 10y ago
        Pretty sure at Uber and Google pay rates (esp. Uber, but also Facebook), SV is what I'd describe as affordable. 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.
ArkyBeagle 10y ago
They tried that in N. Texas in the '90s. I'd say it didn't work out. The crash there meant you probably had to leave. Austin? I dunno if it's really a startup hub or not.
- RhodesianHunter 10y ago
  In my experience, it most definitely is.
  - ArkyBeagle 10y ago
    Is this principally in the web space? That would be why I don't see it then. BuiltInAustin has ... probably a couple-three hundred positions open, no more than 100 per job description. Edit:s/1000/100/stupid fingers...
- amyjess 10y ago
  I beg to differ. North Texas is still one of the most important hubs for the telecom and gaming industries in the country.
  - ArkyBeagle 10y ago
    I'd amend that to "...important hubs for what is left of telecom." It's just the Schumpeter cycle at work. 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.
    - amyjess 10y ago
      I work at Masergy. We're a mid-size (~500 employees) telecom based in Plano, TX. We are doing very, very well. I don't think I'm allowed to share numbers, but this is the first company I've worked at where I don't have to worry about whether or not the company will be out of money by the end of the year. I remember my first employer, a small UC security company that eventually got bought by Avaya in a rather successful exit; every year, we played the game of "will the VCs go for another round of funding or leave us to die?". I don't have to worry about that here. 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).
jaxomlotus 10y ago
Given a choice for investing in a new firm that is a 15 minute drive from the VC's office, and with tons of existing talent to recruit into the company, and with lots of other VC's in the area to fund future rounds VS a startup that might get a better bang for the buck on pricing because it's in the boondocks, and I don't think MORE startups will appear in the midwest than SV.
- hga 10y ago
  California, and therefore "Silicon Valley", still enjoys the unique advantage of non-competes being unenforceable, creating a particularly liquid market in talent.
  - ghaff 10y ago
    It's probably an advantage for California but it's far from clear how major a factor it is in why Silicon Valley developed the way it did. My understanding is that the law that's the basis for non-competes not being generally enforceable has been in place for a very long time (1800s). Yet, Silicon Valley was fruit orchards while other areas of the country were the centers for developing computers and creating much of the technology behind the early Internet.
    - hga 10y ago
      Indeed, and my question, having lived the tail end of Route 128's boom years and then its hard and final death, is why those other places got eclipsed by SV, with no clear sign that's going to change (modulo it looking to be harder and harder to make it work economically). 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 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.
      - mlinksva 10y ago
pklausler 10y ago
Some of us are old enough to remember when the midwest (or more precisely, the Twin Cities area) was the nation's center for high-performance computing businesses. ERA, Univac, Honeywell, Control Data, Cray Research, ETA -- there was something in the water up there that laid a lot of groundwork for modern computing but is mostly now all forgotten.
- hga 10y ago
  A lot of good stuff also came out of IBM Rochester (https://en.wikipedia.org/wiki/IBM_Rochester https://en.wikipedia.org/wiki/IBM_Rochester), Minnesota. 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.
  - poulsbohemian 10y ago
    Any Luther College grads here? Once upon a time there were quite a few of us at IBM Rochester.
- tdb7893 10y ago
  Shoutout to the twin cities! As a developer here (without kids and living pretty cheap) I'm saving half of my income each month. I have a 1000sq ft apartment for 1k a month
  - amyjess 10y ago
    I have to admit that St. Paul is on my short list for places to move in case I ever have to leave my home state (which might actually happen next year, thanks to Texas's transphobic state legislature). How's the food there?
    - mitchty 10y ago
      Its fine, we've even got a kurdish restaurant. http://www.babanis.com http://www.babanis.com 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.
dang 10y ago
Another article about this is http://www.chicagotribune.com/bluesky/originals/ct-drive-capital-300-million-fund-bsi-20160829-story.html http://www.chicagotribune.com/bluesky/originals/ct-drive-cap..., via https://news.ycombinator.com/item?id=12391391 https://news.ycombinator.com/item?id=12391391.
le-mark 10y ago
I've been in the Kansas City developer market since 2002, and I can report that salaries for senior developers (java and .net) are going through the roof here. 110k to 120k is becoming common. At a very non coastal cost of living. It's a great time to be a developer in the midwest!
- jordache 10y ago
  but it's not only a salary to cost of living differential. some of these geographically uninspiring places will have to pay a premium to attract people, and compete with areas with greater potential for high quality of life.
  - ajlburke 10y ago
    Have you BEEN to Kansas City? I got sent there for work meetings once and I have to admit I dreaded it - but it's got lots going for it, with lots of great cultural history (Jazz!) and some awesome food (BBQ!) and some really interesting places downtown. The people I met there were a whole lot more genuinely nice than most Bay Area folks, too. 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.
    - jordache 10y ago
      My bar is geographically compelling regions: West Coast to the Mountain West essentially
    - ocb 10y ago
      Shh, west coast people have a higher quality of life than you! They can drive to better-than-average hikes on weekends! That's such a huge part of their identities that nowhere else could possibly be bearable!
      - jordache 10y ago
        some ppl's quality of life is defined by being able to buy a bigger mcmansion. Other people likes the ability to reconnect with nature. KS? sheesh.. no way man
pithic 10y ago
A one-word rebuttal: weather
- hga 10y ago
  You know, some of us like weather that changes a lot more, also killing frosts/freezes kill a lot of nasty bugs (although I'm not aware of the Bay Area being know for that sort of problem, maybe too dry?). A quick check indicates you can go decades without a white Christmas, and Wikipedia says about San Jose that "On average, there are 2.7 nights annually where the temperature lowers to or below the freezing mark". 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 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/ 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.
  - shostack 10y ago
    Many people like that, but just as many if not more don't. 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.
    - hga 10y ago
      I don't disagree, hence my use of the word "some", and I think Chicago's combination of very cold winters plus humid summers would not be to my taste. Experience shows I can tolerate one or the other based on living in the Boston area for a dozen years, and the rest in the Joplin and D.C. areas which are pretty similar, on the order of 15 degrees F higher in the day during the winter than Chicago.
Lagged2Death 10y ago
"Did you know it was possible to outfit an open-plan office with Ikea desks -- in the midwest? TIL." 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.
- wgyn 10y ago
  I find it kind of strange that there's no mention of the university in Urbana/Champaign.
  - joezydeco 10y ago
    UIUC is a basket case when it comes to incubation and crossover into the industry. And I say this as an alumnus.
    - jessaustin 10y ago
      The location is the reason, right? Not really close to Chicago, Indianapolis, or St. Louis.
  - deleted 10y ago
    [deleted]
- AcerbicZero 10y ago
  Having recently abandoned the Columbus area, I can safely say the Midwest has a long way to go in the culture department. Even relatively new startups in that area tend to adopt the conservative workplace culture that the old guard is still addicted to.
  - amyjess 10y ago
    Honestly, that sounds like a good thing to me. I find SV startup culture to be degenerate, but it does sound nice to have a large amount of job opportunity in tech industries around. Putting a large tech investment in a region that values conservative workplace culture honestly sounds perfect to me. I like my cube farm :)
b_emery 10y ago
Silicon Valley is, and will continue to be, to tech, what New York is to finance. Which means all these other startups will be like regional banks. Good businesses, yes, but not a 'threat' to the big Silicon Valley companies and the tech ecosystem there.
- deleted 10y ago
  [deleted]
- ghaff 10y ago
  For certain values of tech perhaps. Silicon Valley already isn't and never has been a particular center for biotech/pharma for example. One of the things that I expect we're seeing (in addition to the fact that it doesn't work economically for everyone to be in California) is that, as technology of various sorts becomes central to more and more different industries, the centralization of "tech" increasingly makes even less sense than it does already. 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.
- clavalle 10y ago
  New York isn't the New York of finance anymore. Firms are scrambling to get their presence all over the world because the opportunities are no longer converging on Wall Street as they once did.
  - xenihn 10y ago
    Do you have any articles or anything covering this? Would love to send it to my friend who just lost their finance job in NYC and now thinks they've been blacklisted... 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.
    - clavalle 10y ago
      http://www.forbes.com/sites/joelkotkin/2016/08/11/welcome-to-yall-street-the-cities-challenging-new-york-for-financial-supremacy/#2776f7c163f9 http://www.forbes.com/sites/joelkotkin/2016/08/11/welcome-to... It is summed up in the last line: "Of the 70 large metro areas we studied, only three have lost financial jobs since 2010."
spitfire 10y ago
>what would we find when we looked in ....Pittsburgh (home of the leading computer science school in the world, Carnegie Mellon) 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.
- muzz 10y ago
  Also in the article, it was also 2012 when VC's were figuring out that the Midwest is cheaper than Silicon Valley. What an epiphany!
20yrs_no_equity 10y ago
This topic has been coming up on this site for the past decade. Every time it does there are a lot of people who say Silicon Valley will never be beaten. I call this way of thinking "California exceptionalism". 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.
- Analemma_ 10y ago
  > This topic has been coming up on this site for the past decade. Every time it does there are a lot of people who say Silicon Valley will never be beaten. 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.
bryanh 10y ago
I definitely think there will be a gentle trend of tech moving away from Silicon Valley - perhaps not by people/organizations "leaving SV" - instead, people/organizations not "moving to SV". The center of mass will just disperse a bit even if the absolute numbers in SV remain more or less constant. 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.
- randall 10y ago
  We started out similarly and the only reason not to is if your customers cluster geographically. It's a huge competitive disadvantage to not be where your customers are.
  - bryanh 10y ago
    This is true and a very good point.
toephu2 10y ago
The midwest is not the future of startups and will not overtake Silicon Valley in the next 15 years. Yes you can find talent in the midwest but do you think top CS grads from CMU, UIUC, Purdue, etc. want to stay in the midwest after graduating? Think about it.. 22 years old, fresh out of college, after living in the midwest for 4 years...most of them want to come to San Francisco / Silicon Valley, the tech center of the world. Also home of all the other famous tech companies they heard of / interned for before. 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.
- sonoffett 10y ago
  Stanford?
- rpedela 10y ago
  I don't have source for you other than I went to Purdue, but I believe the 25% number for research dollars. You have Purdue, Indiana, Ohio State, Michigan, and many other research universities in the Midwest. Did you know that because both Purdue and Indiana are such powerhouses for biotech research that Indiana is one of the best places in the US to start a biotech company? As for a source, I did biotech research during my graduate studies at Purdue. 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.
  - mark-r 10y ago
    I think the germ of truth was in the article - you need to be close to your customers. If your customers are tech firms, or the kind of people who work at tech firms, Silicon Valley is a good place to be. If your customers are biotech or banks or any of 100 other disciplines, you're better off being elsewhere.
bluetwo 10y ago
I am a software developer outside Philadelphia. I love what I do but I've never considered Silicon Valley as a place I would want to live. 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.
- jazzyk 10y ago
  One problem could be crime rates - Philadelphia usually ranks in the 10-15 worst metro areas in the country.
  - bluetwo 10y ago
    Nope. As long as you stay out of North Philadelphia you'll be just fine.
    - dajohnson89 10y ago
      I hate to be pedantic, but strictly speaking that's half of the city.
      - bluetwo 10y ago
        Only if you have no idea of the layout of philadelphia.
  - jeffreyrogers 10y ago
    Usually the neighborhoods with high crime rates are places software developers don't go to often.
- quaffapint 10y ago
  I'm outside Philly as well (western suburbs). There are plenty of opportunities. I wouldn't say the pay is as good as other places. When you factor in the cost of living, while certainly less than the bay area, it can be higher than midwest. Also, I've run into very few remote possibilities around here, maybe because it's mostly corporate gigs.
robterrin 10y ago
Finance and technical people both underrate the power of tribalism, a major force in making any area a hub for a particular industry.
mark_l_watson 10y ago
Could they add Arizona to the list of good places for tech business, please :-) 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.
- initram 10y ago
  I have to disagree with your assessment of people in California. Having lived in the MidWest, New England, the South, and out West, I can say that the people in California (at least in Los Angeles where I am) are very friendly. I chat with them in the store and at the pump all the time. I can also say that it is the place where it matters the least what you look like when you talk to people you don't know. Skin color, clothing, etc. don't really seem to change people's attitudes too much here, whereas those other places all had very strict expectations of how people doing certain things should look. 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.)
- GFK_of_xmaspast 10y ago
  > very friendly people How's that work out if you're Hispanic and / or African American?
- daxorid 10y ago
  Seconded. I am running the technology department of my (California) company from rural Eastern Arizona. Travel back to CA every couple months and it works out well.
eikenberry 10y ago
I read somewhere that the one thing all the startup hubs had in common was that they were a desirable place to live. This does not seem to describe just about anywhere in the mid-west with its bad climate and shrinking cities.
- JoeAltmaier 10y ago
  Maybe that info is stale? Climate isn't perfect but cities are not shrinking. There are 200M more Americans these days; they don't all live on the coast. Many midwest cities are growing. Slowly with reasonable housing costs.
egypturnash 10y ago
> With a modest amount of effort, we met Duo Security, Farmlogs, Notion, Deepfield, and Llama Soft. 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.
cableshaft 10y ago
I don't know. I live in Chicago, and while I do get recruiters representing Chicago firms pinging me on LinkedIn from time to time, the majority still seem to come from elsewhere. I also had a tough time finding my next job after I was laid off here, twice in the past three years. 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.
- npiazza83 10y ago
  My impression is that Chicago has a lot of catching up to do in terms of recruitment. The jobs are there, but a lot of places are clueless about advertising them and courting talent. Housing prices are more affordable than the valley, but still high for the median salary here. Really the biggest problem with Chicago IMHO is the aging demographic of the highly skilled sought after developer means they want things like good schools and safe neighborhoods IN their city not an hour outside of it.
spo81rty 10y ago
My startup is in Kansas City. There are a lot of great developers here. Huge companies like Garmin, Cerner, Sprint and others do a good job of attracting a lot of talent from all over the US here out of college. Startups like mine can then hire them when they are ready for something new. 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! :-)
- madengr 10y ago
  I'm in OP. Shhh... Don't let them know median household income in Leawood, KS is higher than Palo Alto, CA. Those SV people can stay in their rat race. http://www.city-data.com/city/Palo-Alto-California.html http://www.city-data.com/city/Palo-Alto-California.html http://www.city-data.com/city/Leawood-Kansas.html http://www.city-data.com/city/Leawood-Kansas.html
  - caseyf7 10y ago
    That was surprising. Where would you say the $ comes from in Leawood? It's not clear from Wikipedia. Is it retired Sprint founders/execs?
    - madengr 10y ago
      Mostly dual income households (with kids) with white collar jobs (accounting, engineering, etc). Not difficult to have that income. I'm in the 66211 zip code, but not in Leawood. Wife and I are both engineers. My base income alone is more than that household. Household income is double that. 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. http://www.city-data.com/zips/66211.html http://www.city-data.com/zips/66211.html
notadoc 10y ago
For good reason, some of the cheapest cost of living and highest quality of life in the USA is found in the midwest and flyover country.
bsder 10y ago
So, cities like Pittsburgh are so much better that the founder of ModCloth relocated the whole way across the country after having founded the company in Pittsburgh while at Carnegie Mellon. Ummmmmmmm ... yeah ... seems like the people making these decisions speak with their feet. In addition, Austin actually seems to be in a big venture capital slowdown right now. So, VC's already there don't seem to share the sentiment. I'll believe these partners when they start forking out big checks rather than just blathering words. And I don't think I even need to comment about the cities that have to deal with the political problems of being in a red state. Sure, if you're white, heterosexual, christian, and have a wife mostly interested in spawning burb-rats, the midwest is awesome. If you miss on any of those categories, even God won't help you.
- draw_down 10y ago
  I'm from Pittsburgh and I think it's a really nice city. But I doubt I will move back, the weather sucks. And, less of a concern, but PA is generally an unlovely part of the country in my opinion. I could barely believe my eyes when I saw Oregon and northern CA.
  - bsder 10y ago
    > the weather sucks Yeah, no argument. > And, less of a concern, but PA is generally an unlovely part of the country in my opinion. I could barely believe my eyes when I saw Oregon and northern CA. I'll disagree with you there. I think Western PA is quite beautiful in the late spring, summer and early autumn. My reaction to Northern Ireland was "It's pretty, but going up US-22 through the Applachian Plateau is prettier--especially around Cresson." The problem is that the winter is just awful.
    - draw_down 10y ago
      To each their own. Besides family and stuff I don't really care to step foot in PA again.
- rayiner 10y ago
  > burb-rats Ironic, considering that "Silicon Valley" is a bougie suburban wasteland where Michelin restaurants can be found in strip malls.
perseusprime11 10y ago
We need to come up with some new Silicon something for Midwest. Here's a quick guide on all the silicon something's so far...http://chicagoinno.streetwise.co/2015/05/03/silicon-valley-names-what-other-tech-hubs-call-themselves/ http://chicagoinno.streetwise.co/2015/05/03/silicon-valley-n...
- niftich 10y ago
  Silicon Heartland
- hcrisp 10y ago
  It's already there in the list, Silicon Prairie.
jasoncchild 10y ago
so came here for the comments :trollface:
csense 10y ago
PG gave a speech in Pittsburgh earlier this year on much the same topic [1]. [1] http://paulgraham.com/pgh.html http://paulgraham.com/pgh.html
andythro77 10y ago
hi, am Anderson, i had my friend help me hack my ex's email, facebook, whatsapp,and his phone cause i suspected he was cheating. all he asked for was a his phone number. he's email is (cyberlord7714@gmail.com)..IF u need help tell him Anderson referred you to him and he'll help. Am sure his going to help you do it, good luck

175 points by vollmarj 10y ago

Any reason why midwest and not southeast? The outskirts of Raleigh and Atlanta have the same cost of living benefits while having access to a large talent pool and being close to the coast line/major cities.

devonkim 10y ago
I've worked both coasts equally in my career and have found that despite cost of living differences, wages for the top 25 percentile are quite compressed compared to SV or NYC. Furthermore, there is a rash of jobs that are primarily cost-cutting measures from companies based out of more expensive areas, which puts you at a kind of career positioning disadvantage. Case in point, when I was at HP in the Seattle area we had an office in Cary - it was primarily for QA, not for our platform developers that were more important to continued success of the product. I'm finding the same trend in Atlanta and even fintech 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).
- s_baby 10y ago
  >Furthermore, there is a rash of jobs that are primarily cost-cutting measures from companies based out of more expensive areas, which puts you at a kind of career positioning disadvantage 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.
  - devonkim 10y ago
    With my experiences with the F500s cutting IT costs, most onshore outsourcing was going directly to Texas and the Southeast for what appeared to be specific state-driven tax advantages - only with one or two sites did I see going somewhere like IN, OK, or KS usually due to existing assets there. Based upon more anecdotal info based upon Indeed results, in proportion to the population, there are potentially more and better software jobs as well as greater legacy of older-generation tech companies mentioned elsewhere in the thread from, say, Indiana and Ohio (Xerox). There's also healthcare companies in the midwest like CERNer that would result in some more (admittedly, IT primarily rather than software) tech jobs. Furthermore, Walmart seems to have a pretty solid number of technology jobs that aren't network and storage janitor work. 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.
notadoc 10y ago
The southeast is really nice, I would agree.

PaulHoule 10y ago

At this point in time the advantage of SV is not for the "angel" sized company, but for scale-up from the $1M to $1B range. (i.e. Y Combinator would not have a huge advantage in being there except for the fact that the next round of funding is available there)

Hydraulix989 10y ago
Yes, you can rent a 1 bedroom in Pittsburgh, Pennsylvania for the same cost as a parking spot for your car in SF. Great for lowering that burn rate, plus you're surrounded by the CMU talent pool (Carnegie Mellon is located in Pittsburgh).

sharemywin 10y ago

Columbus, OH is a big food test market. Why because it's got a large cross section of "middle america". If you can make something work here you can probably make it work anywhere. I think if more on demand companies were started here they could have adapted and/or blown up a lot faster. If you want a niche that caters to rich people go to NY and/or CA. If you want something the "average" american will buy try selling it here.

derwiki 10y ago
Having one of the largest public universities in the U.S. also makes it a good test market.

dang 10y ago

We changed the baity title, happily in time to preempt the unproductive argument it probably would have led to. If someone can suggest a better (more accurate and neutral) title, we can change it again.

vollmarj 10y ago
Yeah, I just posted with the word for word title that was on venture beat. Thought that was best practice, but I see what you mean.
- dang 10y ago
  You did fine, though you could also have changed it, since the guidelines say "Please use the original title, unless it is misleading or linkbait." When we change titles for that reason we always try to use a representative phrase from the article itself (e.g. a subtitle or leading sentence) but I had trouble finding one here.
- vollmarj 10y ago
  How about this: "Former Sequoia Capital partners believe the Midwest is the future of startups"
  - dang 10y ago
    Ok let's go with that.

Hydraulix989 10y ago

Great article, except Pittsburgh, Pennsylvania is not midwest, it's East Coast. (I'm from Pittsburgh, born and raised)

coev 10y ago
If a ~7 hour drive from the beach is considered "East Coast" then Vegas is prime waterfront real estate.
- sophacles 10y ago
  I think the parent meant "east coast region". 7 hr drive to the beach sounds lovely compared to my 12-14 hours.
  - Hydraulix989 10y ago
    Except I never heard anyone call Vegas midwest.
    - deleted 10y ago
      [deleted]
    - dllthomas 10y ago
      Why would you? The midwest isn't anywhere near there - it doesn't extend much (if at all) into the Western half of the US. Do you often hear people call Vegas "the West Coast"?
ArkyBeagle 10y ago
Pittsburgh is somehow less East Coast than is Philadelphia. Philly is an original-13-colonies port town; Pittsburg was (for them ) way west . 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.

deleted 10y ago

[deleted]

sailfast 10y ago

This article is hilarious. "Did you know that there are smart people in this place called the Midwest that can also code and find product / market fit? Who knew!?" The tone, though positive, is quite patronizing to midwestern ears. If you're not investing here, you're missing a huge opportunity.

cloudjacker 10y ago
Can you elaborate? 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?
- joshmanders 10y ago
  > Everywhere we looked, the data supported our conclusion that today entrepreneurs are building more billion-dollar companies in the Midwest than in the last 50 years combined. That's a pretty big incentive.
  - cloudjacker 10y ago
    > California is the eighth largest economy in the world. The Midwest is the fifth. 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.
    - joshmanders 10y ago
      I don't know, I'm a programmer in the Midwest and not a investor. But judging by Sequoia's track record, if they think my area is a good place to start investing, I'm gonna accept their notions as pretty accurate over mine.
    - sailfast 10y ago
      You keep mentioning exits - are you talking about being close to a network of partners that will BUY your portfolio companies, or being close to companies that can exit / go public / etc? A large number of exits have occurred in the Midwest over the past few years. Payments, Enterprise Software, Aerospace, finance, etc. What concern is there about a shortage of exits or exit source? It sounds like I'm missing a very valid concern. 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.

joezydeco 10y ago

"Why weren’t top-tier VC firms spending time in Ann Arbor, Indianapolis, Minneapolis, Columbus, Chicago, Detroit, Kansas City, Pittsburgh, and St. Louis?" 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.

Hydraulix989 10y ago
On the flip side, in the Internet's nascent days, you HAD to get an in person meeting with the VC before convincing them to part with a 5 or 6 digit sum of money. Skype was not really possible on a 56k modem.
- joezydeco 10y ago
  Well of course you had to meet in person to get business done. 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.
  - cgearhart 10y ago
    > SV is too expensive a place to be, even at GoogleMicroUberAmazon pay rates. 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.
    - Hydraulix989 10y ago
      Pretty sure at Uber and Google pay rates (esp. Uber, but also Facebook), SV is what I'd describe as affordable. 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.

ArkyBeagle 10y ago

They tried that in N. Texas in the '90s. I'd say it didn't work out. The crash there meant you probably had to leave. Austin? I dunno if it's really a startup hub or not.

RhodesianHunter 10y ago
In my experience, it most definitely is.
- ArkyBeagle 10y ago
  Is this principally in the web space? That would be why I don't see it then. BuiltInAustin has ... probably a couple-three hundred positions open, no more than 100 per job description. Edit:s/1000/100/stupid fingers...
amyjess 10y ago
I beg to differ. North Texas is still one of the most important hubs for the telecom and gaming industries in the country.
- ArkyBeagle 10y ago
  I'd amend that to "...important hubs for what is left of telecom." It's just the Schumpeter cycle at work. 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.
  - amyjess 10y ago
    I work at Masergy. We're a mid-size (~500 employees) telecom based in Plano, TX. We are doing very, very well. I don't think I'm allowed to share numbers, but this is the first company I've worked at where I don't have to worry about whether or not the company will be out of money by the end of the year. I remember my first employer, a small UC security company that eventually got bought by Avaya in a rather successful exit; every year, we played the game of "will the VCs go for another round of funding or leave us to die?". I don't have to worry about that here. 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).

jaxomlotus 10y ago

Given a choice for investing in a new firm that is a 15 minute drive from the VC's office, and with tons of existing talent to recruit into the company, and with lots of other VC's in the area to fund future rounds VS a startup that might get a better bang for the buck on pricing because it's in the boondocks, and I don't think MORE startups will appear in the midwest than SV.

hga 10y ago
California, and therefore "Silicon Valley", still enjoys the unique advantage of non-competes being unenforceable, creating a particularly liquid market in talent.
- ghaff 10y ago
  It's probably an advantage for California but it's far from clear how major a factor it is in why Silicon Valley developed the way it did. My understanding is that the law that's the basis for non-competes not being generally enforceable has been in place for a very long time (1800s). Yet, Silicon Valley was fruit orchards while other areas of the country were the centers for developing computers and creating much of the technology behind the early Internet.
  - hga 10y ago
    Indeed, and my question, having lived the tail end of Route 128's boom years and then its hard and final death, is why those other places got eclipsed by SV, with no clear sign that's going to change (modulo it looking to be harder and harder to make it work economically). 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 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.
    - mlinksva 10y ago

pklausler 10y ago

Some of us are old enough to remember when the midwest (or more precisely, the Twin Cities area) was the nation's center for high-performance computing businesses. ERA, Univac, Honeywell, Control Data, Cray Research, ETA -- there was something in the water up there that laid a lot of groundwork for modern computing but is mostly now all forgotten.

hga 10y ago
A lot of good stuff also came out of IBM Rochester (https://en.wikipedia.org/wiki/IBM_Rochester https://en.wikipedia.org/wiki/IBM_Rochester), Minnesota. 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.
- poulsbohemian 10y ago
  Any Luther College grads here? Once upon a time there were quite a few of us at IBM Rochester.
tdb7893 10y ago
Shoutout to the twin cities! As a developer here (without kids and living pretty cheap) I'm saving half of my income each month. I have a 1000sq ft apartment for 1k a month
- amyjess 10y ago
  I have to admit that St. Paul is on my short list for places to move in case I ever have to leave my home state (which might actually happen next year, thanks to Texas's transphobic state legislature). How's the food there?
  - mitchty 10y ago
    Its fine, we've even got a kurdish restaurant. http://www.babanis.com http://www.babanis.com 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.

dang 10y ago

Another article about this is http://www.chicagotribune.com/bluesky/originals/ct-drive-capital-300-million-fund-bsi-20160829-story.html http://www.chicagotribune.com/bluesky/originals/ct-drive-cap..., via https://news.ycombinator.com/item?id=12391391 https://news.ycombinator.com/item?id=12391391.

le-mark 10y ago

I've been in the Kansas City developer market since 2002, and I can report that salaries for senior developers (java and .net) are going through the roof here. 110k to 120k is becoming common. At a very non coastal cost of living. It's a great time to be a developer in the midwest!

jordache 10y ago
but it's not only a salary to cost of living differential. some of these geographically uninspiring places will have to pay a premium to attract people, and compete with areas with greater potential for high quality of life.
- ajlburke 10y ago
  Have you BEEN to Kansas City? I got sent there for work meetings once and I have to admit I dreaded it - but it's got lots going for it, with lots of great cultural history (Jazz!) and some awesome food (BBQ!) and some really interesting places downtown. The people I met there were a whole lot more genuinely nice than most Bay Area folks, too. 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.
  - jordache 10y ago
    My bar is geographically compelling regions: West Coast to the Mountain West essentially
  - ocb 10y ago
    Shh, west coast people have a higher quality of life than you! They can drive to better-than-average hikes on weekends! That's such a huge part of their identities that nowhere else could possibly be bearable!
    - jordache 10y ago
      some ppl's quality of life is defined by being able to buy a bigger mcmansion. Other people likes the ability to reconnect with nature. KS? sheesh.. no way man

pithic 10y ago

A one-word rebuttal: weather

hga 10y ago
You know, some of us like weather that changes a lot more, also killing frosts/freezes kill a lot of nasty bugs (although I'm not aware of the Bay Area being know for that sort of problem, maybe too dry?). A quick check indicates you can go decades without a white Christmas, and Wikipedia says about San Jose that "On average, there are 2.7 nights annually where the temperature lowers to or below the freezing mark". 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 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/ 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.
- shostack 10y ago
  Many people like that, but just as many if not more don't. 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.
  - hga 10y ago
    I don't disagree, hence my use of the word "some", and I think Chicago's combination of very cold winters plus humid summers would not be to my taste. Experience shows I can tolerate one or the other based on living in the Boston area for a dozen years, and the rest in the Joplin and D.C. areas which are pretty similar, on the order of 15 degrees F higher in the day during the winter than Chicago.

Lagged2Death 10y ago

"Did you know it was possible to outfit an open-plan office with Ikea desks -- in the midwest? TIL." 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.

wgyn 10y ago
I find it kind of strange that there's no mention of the university in Urbana/Champaign.
- joezydeco 10y ago
  UIUC is a basket case when it comes to incubation and crossover into the industry. And I say this as an alumnus.
  - jessaustin 10y ago
    The location is the reason, right? Not really close to Chicago, Indianapolis, or St. Louis.
- deleted 10y ago
  [deleted]
AcerbicZero 10y ago
Having recently abandoned the Columbus area, I can safely say the Midwest has a long way to go in the culture department. Even relatively new startups in that area tend to adopt the conservative workplace culture that the old guard is still addicted to.
- amyjess 10y ago
  Honestly, that sounds like a good thing to me. I find SV startup culture to be degenerate, but it does sound nice to have a large amount of job opportunity in tech industries around. Putting a large tech investment in a region that values conservative workplace culture honestly sounds perfect to me. I like my cube farm :)

b_emery 10y ago

Silicon Valley is, and will continue to be, to tech, what New York is to finance. Which means all these other startups will be like regional banks. Good businesses, yes, but not a 'threat' to the big Silicon Valley companies and the tech ecosystem there.

deleted 10y ago
[deleted]
ghaff 10y ago
For certain values of tech perhaps. Silicon Valley already isn't and never has been a particular center for biotech/pharma for example. One of the things that I expect we're seeing (in addition to the fact that it doesn't work economically for everyone to be in California) is that, as technology of various sorts becomes central to more and more different industries, the centralization of "tech" increasingly makes even less sense than it does already. 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.
clavalle 10y ago
New York isn't the New York of finance anymore. Firms are scrambling to get their presence all over the world because the opportunities are no longer converging on Wall Street as they once did.
- xenihn 10y ago
  Do you have any articles or anything covering this? Would love to send it to my friend who just lost their finance job in NYC and now thinks they've been blacklisted... 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.
  - clavalle 10y ago
    http://www.forbes.com/sites/joelkotkin/2016/08/11/welcome-to-yall-street-the-cities-challenging-new-york-for-financial-supremacy/#2776f7c163f9 http://www.forbes.com/sites/joelkotkin/2016/08/11/welcome-to... It is summed up in the last line: "Of the 70 large metro areas we studied, only three have lost financial jobs since 2010."

spitfire 10y ago

>what would we find when we looked in ....Pittsburgh (home of the leading computer science school in the world, Carnegie Mellon) 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.

muzz 10y ago
Also in the article, it was also 2012 when VC's were figuring out that the Midwest is cheaper than Silicon Valley. What an epiphany!

20yrs_no_equity 10y ago

This topic has been coming up on this site for the past decade. Every time it does there are a lot of people who say Silicon Valley will never be beaten. I call this way of thinking "California exceptionalism". 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.

Analemma_ 10y ago
> This topic has been coming up on this site for the past decade. Every time it does there are a lot of people who say Silicon Valley will never be beaten. 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.

bryanh 10y ago

I definitely think there will be a gentle trend of tech moving away from Silicon Valley - perhaps not by people/organizations "leaving SV" - instead, people/organizations not "moving to SV". The center of mass will just disperse a bit even if the absolute numbers in SV remain more or less constant. 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.

randall 10y ago
We started out similarly and the only reason not to is if your customers cluster geographically. It's a huge competitive disadvantage to not be where your customers are.
- bryanh 10y ago
  This is true and a very good point.

toephu2 10y ago

The midwest is not the future of startups and will not overtake Silicon Valley in the next 15 years. Yes you can find talent in the midwest but do you think top CS grads from CMU, UIUC, Purdue, etc. want to stay in the midwest after graduating? Think about it.. 22 years old, fresh out of college, after living in the midwest for 4 years...most of them want to come to San Francisco / Silicon Valley, the tech center of the world. Also home of all the other famous tech companies they heard of / interned for before. 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.

sonoffett 10y ago
Stanford?
rpedela 10y ago
I don't have source for you other than I went to Purdue, but I believe the 25% number for research dollars. You have Purdue, Indiana, Ohio State, Michigan, and many other research universities in the Midwest. Did you know that because both Purdue and Indiana are such powerhouses for biotech research that Indiana is one of the best places in the US to start a biotech company? As for a source, I did biotech research during my graduate studies at Purdue. 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.
- mark-r 10y ago
  I think the germ of truth was in the article - you need to be close to your customers. If your customers are tech firms, or the kind of people who work at tech firms, Silicon Valley is a good place to be. If your customers are biotech or banks or any of 100 other disciplines, you're better off being elsewhere.

bluetwo 10y ago

I am a software developer outside Philadelphia. I love what I do but I've never considered Silicon Valley as a place I would want to live. 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.

jazzyk 10y ago
One problem could be crime rates - Philadelphia usually ranks in the 10-15 worst metro areas in the country.
- bluetwo 10y ago
  Nope. As long as you stay out of North Philadelphia you'll be just fine.
  - dajohnson89 10y ago
    I hate to be pedantic, but strictly speaking that's half of the city.
    - bluetwo 10y ago
      Only if you have no idea of the layout of philadelphia.
- jeffreyrogers 10y ago
  Usually the neighborhoods with high crime rates are places software developers don't go to often.
quaffapint 10y ago
I'm outside Philly as well (western suburbs). There are plenty of opportunities. I wouldn't say the pay is as good as other places. When you factor in the cost of living, while certainly less than the bay area, it can be higher than midwest. Also, I've run into very few remote possibilities around here, maybe because it's mostly corporate gigs.

robterrin 10y ago

Finance and technical people both underrate the power of tribalism, a major force in making any area a hub for a particular industry.

mark_l_watson 10y ago

Could they add Arizona to the list of good places for tech business, please :-) 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.

initram 10y ago
I have to disagree with your assessment of people in California. Having lived in the MidWest, New England, the South, and out West, I can say that the people in California (at least in Los Angeles where I am) are very friendly. I chat with them in the store and at the pump all the time. I can also say that it is the place where it matters the least what you look like when you talk to people you don't know. Skin color, clothing, etc. don't really seem to change people's attitudes too much here, whereas those other places all had very strict expectations of how people doing certain things should look. 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.)
GFK_of_xmaspast 10y ago
> very friendly people How's that work out if you're Hispanic and / or African American?
daxorid 10y ago
Seconded. I am running the technology department of my (California) company from rural Eastern Arizona. Travel back to CA every couple months and it works out well.

eikenberry 10y ago

I read somewhere that the one thing all the startup hubs had in common was that they were a desirable place to live. This does not seem to describe just about anywhere in the mid-west with its bad climate and shrinking cities.

JoeAltmaier 10y ago
Maybe that info is stale? Climate isn't perfect but cities are not shrinking. There are 200M more Americans these days; they don't all live on the coast. Many midwest cities are growing. Slowly with reasonable housing costs.

egypturnash 10y ago

> With a modest amount of effort, we met Duo Security, Farmlogs, Notion, Deepfield, and Llama Soft. 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.

cableshaft 10y ago

I don't know. I live in Chicago, and while I do get recruiters representing Chicago firms pinging me on LinkedIn from time to time, the majority still seem to come from elsewhere. I also had a tough time finding my next job after I was laid off here, twice in the past three years. 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.

npiazza83 10y ago
My impression is that Chicago has a lot of catching up to do in terms of recruitment. The jobs are there, but a lot of places are clueless about advertising them and courting talent. Housing prices are more affordable than the valley, but still high for the median salary here. Really the biggest problem with Chicago IMHO is the aging demographic of the highly skilled sought after developer means they want things like good schools and safe neighborhoods IN their city not an hour outside of it.

spo81rty 10y ago

My startup is in Kansas City. There are a lot of great developers here. Huge companies like Garmin, Cerner, Sprint and others do a good job of attracting a lot of talent from all over the US here out of college. Startups like mine can then hire them when they are ready for something new. 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! :-)

madengr 10y ago
I'm in OP. Shhh... Don't let them know median household income in Leawood, KS is higher than Palo Alto, CA. Those SV people can stay in their rat race. http://www.city-data.com/city/Palo-Alto-California.html http://www.city-data.com/city/Palo-Alto-California.html http://www.city-data.com/city/Leawood-Kansas.html http://www.city-data.com/city/Leawood-Kansas.html
- caseyf7 10y ago
  That was surprising. Where would you say the $ comes from in Leawood? It's not clear from Wikipedia. Is it retired Sprint founders/execs?
  - madengr 10y ago
    Mostly dual income households (with kids) with white collar jobs (accounting, engineering, etc). Not difficult to have that income. I'm in the 66211 zip code, but not in Leawood. Wife and I are both engineers. My base income alone is more than that household. Household income is double that. 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. http://www.city-data.com/zips/66211.html http://www.city-data.com/zips/66211.html

notadoc 10y ago

For good reason, some of the cheapest cost of living and highest quality of life in the USA is found in the midwest and flyover country.

bsder 10y ago

So, cities like Pittsburgh are so much better that the founder of ModCloth relocated the whole way across the country after having founded the company in Pittsburgh while at Carnegie Mellon. Ummmmmmmm ... yeah ... seems like the people making these decisions speak with their feet. In addition, Austin actually seems to be in a big venture capital slowdown right now. So, VC's already there don't seem to share the sentiment. I'll believe these partners when they start forking out big checks rather than just blathering words. And I don't think I even need to comment about the cities that have to deal with the political problems of being in a red state. Sure, if you're white, heterosexual, christian, and have a wife mostly interested in spawning burb-rats, the midwest is awesome. If you miss on any of those categories, even God won't help you.

draw_down 10y ago
I'm from Pittsburgh and I think it's a really nice city. But I doubt I will move back, the weather sucks. And, less of a concern, but PA is generally an unlovely part of the country in my opinion. I could barely believe my eyes when I saw Oregon and northern CA.
- bsder 10y ago
  > the weather sucks Yeah, no argument. > And, less of a concern, but PA is generally an unlovely part of the country in my opinion. I could barely believe my eyes when I saw Oregon and northern CA. I'll disagree with you there. I think Western PA is quite beautiful in the late spring, summer and early autumn. My reaction to Northern Ireland was "It's pretty, but going up US-22 through the Applachian Plateau is prettier--especially around Cresson." The problem is that the winter is just awful.
  - draw_down 10y ago
    To each their own. Besides family and stuff I don't really care to step foot in PA again.
rayiner 10y ago
> burb-rats Ironic, considering that "Silicon Valley" is a bougie suburban wasteland where Michelin restaurants can be found in strip malls.

perseusprime11 10y ago

We need to come up with some new Silicon something for Midwest. Here's a quick guide on all the silicon something's so far...http://chicagoinno.streetwise.co/2015/05/03/silicon-valley-names-what-other-tech-hubs-call-themselves/ http://chicagoinno.streetwise.co/2015/05/03/silicon-valley-n...

niftich 10y ago
Silicon Heartland
hcrisp 10y ago
It's already there in the list, Silicon Prairie.

jasoncchild 10y ago

so came here for the comments :trollface:

csense 10y ago

PG gave a speech in Pittsburgh earlier this year on much the same topic [1]. [1] http://paulgraham.com/pgh.html http://paulgraham.com/pgh.html

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