8 ms·
As a Boston resident, but former midwesterner, I wish the story was "Midwest competitive with East and West Coast for venture totals". I think it's a real prob
by swalsh 8y ago
As a Boston resident, but former midwesterner, I wish the story was "Midwest competitive with East and West Coast for venture totals". I think it's a real problem that venture capital is highly concentrated in just a few places.
- lotsofpulp 8y agoTerrible weather, flat terrain, socially conservative populace, lower probabilities of meeting important or rich people to create network. These qualities don't seem like they would appeal for those with money or in tech/science oriented fields.
- pretendscholar 8y agoWhy is flat terrain an negative trait?
- lotsofpulp 8y agoI didn't mean that it's inherently negative, I meant given the option, more people will choose mountainous/hilly terrain over flat terrain. Either for aesthetics, or hiking, or skiing, or whatever. My only proof is that property values are higher in those areas.
- RandallBrown 8y agoFlat terrain is one of the biggest reasons why I never plan to move back to my home state of Michigan. Skiing, hiking, and climbing are 3 important things to me that the midwest simply doesn't have in any meaningful way.
- ensignavenger 8y agoThere are plenty of hiking trails throughout the midwest, and Arkansas has some of the finest rock climbing in the nation. Plenty of climbing in other Midwestern states as well. Snow skiing, not so much.
- RandallBrown 8y agoThe hiking in the midwest is hardly comparable to the hiking in the rockies and west coast. It's hardly even comparable to the hiking on the east coast. There's some good rock climbing sure, but there's no alpine climbing.
- ryanwaggoner 8y agoBoring.
- DoofusOfDeath 8y agoCan you elaborate on why you see socially-conservative politics as being unattractive to people with money? (I don't know if you're right or wrong, I'm just trying to learn something.)
- lotsofpulp 8y agoI should be clear that I can't claim to know why. I just look at the stats, and I see more wealthier people in areas that are more socially liberal.
- DoofusOfDeath 8y ago> I should be clear that I can't claim to know why. I meant no offense. I simply had no idea how much data or reasoning backed up your statement.
- lotsofpulp 8y agoCost of land and rent prices. If we're talking about the people who work at startups, whose labor is among the most in demand in the world, they can basically choose to live wherever they want to. I know some of it is due to most employers being in urban areas etc etc, but I also think a lot of it is people wanting to be in those areas.
- andrewvc 8y agoLarge Midwestern cities like Minneapolis and Chicago are quite liberal and have a lot of rich people who could fund startups. We actually do have a lot of tech in these places, but generally only because large companies are in these places and they need a lot of engineering. The startup culture is not here of course, but the reasons are not the ones you list.
- lotsofpulp 8y agoThey are, and I'm sure they are great places to live. But the person I responded to was hoping Midwest can compete with NYC/SF/SEA/DC/etc, so I offered the reasons why I think there's a structural reason that you don't see that headline, and not just because some VC fund hasn't offered money to people in the midwest. It's because the people the VC funds want to invest in also want to live in the cities with high rents.
- vasilipupkin 8y agothere is decent amount of startup activity in the midwest and growing https://www.bloomberg.com/graphics/2018-venture-capital-deals/ https://www.bloomberg.com/graphics/2018-venture-capital-deal...
- swalsh 8y agoIt's a great place to start a family. Housing is a lot cheaper, and the people are hard workers. There's a lot of really smart people in the Midwest who will dedicate themselves to your cause because they have a family to take care of. The midwest will probably never be competitive for top AI talent, but it already has some of the hardest working, and most loyal talent. Most companies don't need genius, they just need someone with a lot of grit. The Midwest has vast swaths of folks with grit.
- nostrademons 8y agoThat same level-headedness and sense of responsibility can be a liability when it comes to startups. Most successful startups are insane when people first start working on them; if they weren't, someone would already have done them, and the market opportunity would be filled. (I had a Boston-based mentor who's already had two successful exits tell me once, "The only startups I've ever seen succeed are the ones where some engineer figured they could do something thought to be impossible.") It's very hard to justify devoting years of your life to working on something believed to be impossible or a waste of time if you have a family to support, and a deep-seated belief in using your time productively.
- mooreds 8y agoSo I might phrase it as "the Midwest is a great place for a startup to grow in" because what you said about families and startups is very true. When a company is ready for steady loyal employees, they can come to the Midwest and find them. As many companies are starting to do.
- testplzignore 8y agoAs far as weather, the Midwest, Boston, and NYC are pretty much the same. Boston and the upper Midwest are cooler, of course. If weather mattered all that much, the coast from LA to San Diego would be where you'd want to go.
- nostrademons 8y agoSilicon Valley is pretty awesome as far as weather goes - it will be straight 70 degrees and sunny from March till November, and rarely gets below 50. Summers are a bit more mild than in SoCal, air pollution is less of a problem, and the fire danger has been less in recent years. There is more rain and lower temperatures in the winter, but not really enough to be annoying, and it means you might actually see running water that's not channeled by concrete in the South Bay. https://en.wikipedia.org/wiki/Los_Angeles#Climate https://en.wikipedia.org/wiki/Los_Angeles#Climate https://en.wikipedia.org/wiki/San_Jose,_California#Climate https://en.wikipedia.org/wiki/San_Jose,_California#Climate
- lotsofpulp 8y agoConsidering the Cali coast has the highest cost of living, doesn't that mean it is where many people want to be? Boston/NYC have the benefits of being in very highly populated areas with very old institutions, especially with reputations like MIT/Harvard/Columbia/etc and there's already a lot of money floating around, so that makes up for the weather part a little. It's not just one factor, it's a combination of all of these that unfortunately make some places more desirable to live in than others. And who knows, may be it will change in the future.
- deleted 8y ago[deleted]
- amyjess 8y ago> Considering the Cali coast has the highest cost of living, doesn't that mean it is where many people want to be? CA has more natural boundaries that spike the cost of living higher. For example, pretty much the entire LA area (except around Palmdale) consists of a bunch of small valleys nestled between mountains. Not only do they have the west coast in the way, but they've got mountains blocking them from expanding in every other direction. And you can say the same thing about the Bay Area, too. If expansion isn't blocked by water, it's blocked by mountains. NYC's COL is also in large part due to natural boundaries, but it's not as bad as CA. Manhattan is a tiny island. Long Island is also, well, an island. The Bronx and Westchester are a peninsula. But there's at least some room to expand. The Hudson Valley opens up when you get north of White Plains, and Jersey has plenty of room to sprawl. So the COL isn't nearly as bad as SF. What really keeps it as high as it is, though, is culture: Manhattan is the center of the world, and that's exactly how New Yorkers like it. There's a massive stigma to setting up shop in places like Morristown or Ossining. So instead everyone either pays $$$$$ to live near work in Manhattan or they pay $$$$ live in the suburbs but not so far out in the suburbs that they can't commute to Manhattan every day. In the midwest and the southwest, on the other hand, there's no stigma to setting up shop in suburban edge cities. So you have metro areas like Dallas where there are large tech hubs in suburbs like Plano and Richardson, and some companies now are setting up shop in the exurbs.
- Serow225 8y agoEquating the US mid-west with socially-conservative populace is a gross generalization.
- psychometry 8y agoHave you seen the kinds of politicians WI and MI have been electing recently? It's not generalization.
- mi100hael 8y agoMidwestern cities are usually pretty liberal & progressive. Minneapolis, Chicago, Madison, etc are all highly inclusive, green, and well-educated. Often times certain rural districts can be more backwards, which is how you get Michele Bachmann & Amy Klobuchar coming out of the same state.
- ryanwaggoner 8y agoIt's more complicated than that. I'd replace "usually" with "sometimes", but you also have the issue of what the overall state looks like. So you can have a "liberal and progressive" city in the middle of a fairly red state, and you end up with a liberal mayor but a conservative governor and legislature, which are constantly stymying your city's attempts to do progressive things. See WI for example.
- vasilipupkin 8y agothe biggest Midwestern state by population is Illinois, which is blue, it is where both Lincoln and Obama came from. So, saying "Midwest is conservative", while the biggest state in the Midwest is actually liberal is kinda silly.
- meddlepal 8y agoIllinois is more purple than anything and it's trending red. It's purpleness is heavily buoyed by Chicago as a blue place.
- vasilipupkin 8y agoChicago has socially conservative populace and lower probability of meeting rich people ? hmmmmm
- dmode 8y agoAnother thing that works against Midwest is that when the world things of "America", Midwest is not what comes to mind. To build a large competitive tech hub, you need to be able to attract huge numbers of Indian and Chinese developers are you scale your company to 10,000 engineers. However, most Asians (and even Europeans) prefer to stay on the coast due to the storied past, Silicon Valley name recognition, socially liberal policies, huge diversity, access to ethnic food etc.
- vasilipupkin 8y agojeez. this thread seems to be full of bad takes. you think Chicago doesn't have huge numbers of indian and chinese developers? please.
- amyjess 8y ago> However, most Asians (and even Europeans) prefer to stay on the coast due to the storied past, Silicon Valley name recognition, socially liberal policies, huge diversity, access to ethnic food etc. Tell that to the huge Asian population in Dallas. It's not quite the Midwest, but it's still the Great Plains and the culture is similar. The Indian and Chinese food here is second to none, and we're one of the most diverse metro areas in the country. Also, while Asians may prefer the Democrats' stances on immigration, they are often deeply socially conservative, just as much as any white Southern Baptist, and they tend to form extremely conservative ethnic enclaves.
- dmode 8y agoAsians make up 15% of California population and is the fastest growing ethnicity in CA. While they make up only 3% of Texas. It is not comparable https://en.wikipedia.org/wiki/Demographics_of_California https://en.wikipedia.org/wiki/Demographics_of_California https://en.wikipedia.org/wiki/Demographics_of_Texas https://en.wikipedia.org/wiki/Demographics_of_Texas
- DoofusOfDeath 8y ago> I think it's a real problem that venture capital is highly concentrated in just a few places. My impression is that technical communities strongly benefit from getting many techies into a small geographic area. If we take that as a starting assumption, then I'm not sure there's anything amiss about VC funding being concentrated in those specific geographies.
- ng12 8y agoBecause it's a massive waste of money. How much of that VC funding is disappearing due to high COL and high CODB?
- DoofusOfDeath 8y agoI guess the question then is whether or not the marginal costs outweigh the marginal benefits. I have no clue what the answer to that is.
- esturk 8y agoIt's not a waste if they get better returns. In comparison, you're not going to attract many people to the Midwest when no one wants to go there, which in turn yield lower returns.
- ng12 8y agoThe VCs are acting rationally but it's still an inefficiency. Theoretically if a significant number of tech people chose to gather in a low-COL Midwest city you could stretch VC dollars much further while still undercutting SF/NYC.
- dnadler 8y ago> if a significant number of tech people chose to gather in a low-COL Midwest city Honestly, the cost of living would probably go up...
- 8y ago
- robbiemitchell 8y agoI assume most venture capital is currently spent on growth rounds for companies that already have traction. There are more of the companies on the coasts than within them, and they're in areas with a high concentration of talent and customers, which fuels the cycle.
- drngdds 8y agoIt's convenient for people who already live in those places and want to be able to move between companies without totally uprooting, though.
- jorblumesea 8y agoAs a former midwesterner, most places don't have nearly the density of schools, people, infrastructure, etc to support a large startup environment, or even a medium sized one. Too spread out, too little emphasis on education. Pittsburg and Chicago are a notable exceptions.
- hibikir 8y agoThere are startups in the midwest, but it's very hard to get funding here: Exec teams have to spend a lot of time traveling to raise money. Still, there are sectors where the midwest is a clear competitive advantage: You can build a biotech startup working on agriculture in California, but if you need to hire crop scientists and test equipment in farms, you are better off in a midwestern metro, 45 minutes away from large corn and soybean operations. You might want a small office in Boston or San Francisco too though, just to cut exec travel to see investors.