5 ms·

The Trouble with Bubbles (talent, angel & incubators… oh my)

36 points by ssclafani 16y ago

Stevenup7002 16y ago
"With Twitter, Zynga, Facebook and Google in the ultimate game of one-upmanship, small startups are simply not going to be able to compete for talent in the Valley." I disagree, there will always be a sizable handful of engineers that would rather work in a startup environment than in a big company like Google or Facebook.
jasonmcalacanis 16y ago
1. What did I get right? 2. What did I get wrong? 3. What did I miss? Interested to hear yc folks thoughts on the incubator bubble that the massive success of YC and TechStars has caused.
- athst 16y ago
  My question from this was, if you shouldn't be in Silicon Valley or NYC and choose a different city, how does that affect your ability to raise money? And what does it cost to give up some of the community/cross-pollination effect that goes on in those major areas?
  - qthrul 16y ago
    To fully address that question you'd probably want to review the meta coverage of the topic. I'm not offering a comprehensive listing but these are two links you might consider: http://www.readwriteweb.com/start/never-mind-the-valley/ http://www.readwriteweb.com/start/never-mind-the-valley/ http://www.fastcompany.com/1699323/why-you-should-start-a-company-in-raleigh-durham http://www.fastcompany.com/1699323/why-you-should-start-a-co... The key take away (for me) isn't that one city can make or break a company but there are certain considerations to make. Caveat A: if your company success is predicated on being inside of a known echo chamber or circulatory system of talent -- by all means consider SF/NY/etc... Caveat B: if you need to be aligned a specific niche that has no ties to an "NFL city" -- get away as fast as you can to where that niche can best be served with the basics quality of life that will draw the talent and team you desire. SAS software is the largest privately held software company on the planet. Yet... they started not in SF/NY... but... North Carolina? rip needle across the record http://sas.com http://sas.com RightNow is a public software company that was not started in SF/NY... but... Montana? rip needle across the record http://rightnow.com http://rightnow.com There are more. Seriously. Think about it and do the searches. Download Crunchbase and plot it... http://trends.techcrunch.com/ http://trends.techcrunch.com/ Don't take my text for it... Just pick up your head and look around to see a world that doesn't -exclusively- fit in zip codes starting with 941xxx and 112xxx.
  - jasonmcalacanis 16y ago
    1. It is much easier to raise money in the Valley than any where else--certainly. However, based on what I've seen from Open Angel Forum, you can raise money in Seattle, Boston, Los Angeles and Boulder almost as easily, and at a similar (maybe -10-25%) valuation. 2. Los Angeles, Seattle, Austin and Boston specifically have a lot of angels and not a lot of great companies in my experience. 3. You will give up some cross-pollination, yes. However, you will experience less turnover and competition for talent. The best thing an up and coming startup could do in my mind right now is move to Seattle, DC or Boston.... there are so many amazing developers there who want to work at a kick-ass startup. If Twitter moved their HQ to Seattle right now they would get a flood of folks from Amazon, Microsoft, etc. to join them.
    - athst 16y ago
      Thanks. DC is an interesting one, you don't hear it mentioned very often.
    - neworbit 16y ago
      I don't see those valuations nor investor traction in Seattle, Boston, or LA. Not sure I ever have for Seattle and LA. Part of the reason there is that they aren't in the Valley echo chamber. Farther you get from home, the less press you get, therefore the fewer people thinking "what a great company".
      - jasonmcalacanis 16y ago
        at the Boston, Seattle and Los Angeles Open Angel Forums we have seen companies that are slightly less (10-35%) further along than the Valley and New York City, but that have valuations that are much less (50%). Folks in those cities are raising $250-500k at $1.5-2m valuations, where in NYC and the Bay Area/Valley we see $4-6M valuations. You are correct that those companies get less press.... however, they just have to be creative and successful and they will get it (RedFin and Groupon and Gowalla come to mind).
        neworbit 16y ago
- zackattack 16y ago
  I have a globalization question. Where can I get data on which countries are spending money online, and which age groups are spending money online?
alain94040 16y ago
I liked that post from Jason, I found it quite insightful. I just disagree with the talent part. Yes, it's tough to hire the best in Silicon Valley, but frankly, moving to Oklahoma will not make it better. Is there an angel bubble? There is definitely a major uptick. I agree with his reasoning. Angels have money. Even the stock market is back higher than it was before the 2008 crash. So cash is available. But for how long?
- thetrumanshow 16y ago
  If there is a talent bubble causing salaries to surge, it must be HIGHLY localized... say, at the top 3% of talent.
  - jasonmcalacanis 16y ago
    Actually, I've been hearing stories of 80-100k out of school for developers. That would be the high/highest end of salaries in cities like Boston, Austin, seattle, etc.
deleted 16y ago
[deleted]
austinnobody 16y ago
if i read one more title like this: blah, blah, and blah, oh my! or like this: blah or: How I Learned to Stop blah and Love the blah i'm gonna punch my monitor!
- joshu 16y ago
  top 10 titles not to use anymore!
- danilocampos 16y ago
  I'm not sure why you're being voted down. These cliches are awful. Not clever, not any signaling mechanism that you're a friend of Dorothy or a fan of Kubrick or anything else. Just awful. It's enough to prevent me reading the article unless the author has already banked some serious credibility with past work.
  - austinnobody 16y ago
    non-haters gotta hate
- jasonmcalacanis 16y ago
  That's a really astute observation. Thanks for contributing to the discourse.
DanielRibeiro 16y ago
The following quote reminds me a lot of what pg said in "Why to Start a Startup in a Bad Economy" Let me repeat that: great startups grow independently of the stock market. The fact is, the public markets rarely have much effect on a startup at all.

36 points by ssclafani 16y ago

"With Twitter, Zynga, Facebook and Google in the ultimate game of one-upmanship, small startups are simply not going to be able to compete for talent in the Valley." I disagree, there will always be a sizable handful of engineers that would rather work in a startup environment than in a big company like Google or Facebook.

jasonmcalacanis 16y ago

1. What did I get right? 2. What did I get wrong? 3. What did I miss? Interested to hear yc folks thoughts on the incubator bubble that the massive success of YC and TechStars has caused.

athst 16y ago
My question from this was, if you shouldn't be in Silicon Valley or NYC and choose a different city, how does that affect your ability to raise money? And what does it cost to give up some of the community/cross-pollination effect that goes on in those major areas?
- qthrul 16y ago
  To fully address that question you'd probably want to review the meta coverage of the topic. I'm not offering a comprehensive listing but these are two links you might consider: http://www.readwriteweb.com/start/never-mind-the-valley/ http://www.readwriteweb.com/start/never-mind-the-valley/ http://www.fastcompany.com/1699323/why-you-should-start-a-company-in-raleigh-durham http://www.fastcompany.com/1699323/why-you-should-start-a-co... The key take away (for me) isn't that one city can make or break a company but there are certain considerations to make. Caveat A: if your company success is predicated on being inside of a known echo chamber or circulatory system of talent -- by all means consider SF/NY/etc... Caveat B: if you need to be aligned a specific niche that has no ties to an "NFL city" -- get away as fast as you can to where that niche can best be served with the basics quality of life that will draw the talent and team you desire. SAS software is the largest privately held software company on the planet. Yet... they started not in SF/NY... but... North Carolina? rip needle across the record http://sas.com http://sas.com RightNow is a public software company that was not started in SF/NY... but... Montana? rip needle across the record http://rightnow.com http://rightnow.com There are more. Seriously. Think about it and do the searches. Download Crunchbase and plot it... http://trends.techcrunch.com/ http://trends.techcrunch.com/ Don't take my text for it... Just pick up your head and look around to see a world that doesn't -exclusively- fit in zip codes starting with 941xxx and 112xxx.
- jasonmcalacanis 16y ago
  1. It is much easier to raise money in the Valley than any where else--certainly. However, based on what I've seen from Open Angel Forum, you can raise money in Seattle, Boston, Los Angeles and Boulder almost as easily, and at a similar (maybe -10-25%) valuation. 2. Los Angeles, Seattle, Austin and Boston specifically have a lot of angels and not a lot of great companies in my experience. 3. You will give up some cross-pollination, yes. However, you will experience less turnover and competition for talent. The best thing an up and coming startup could do in my mind right now is move to Seattle, DC or Boston.... there are so many amazing developers there who want to work at a kick-ass startup. If Twitter moved their HQ to Seattle right now they would get a flood of folks from Amazon, Microsoft, etc. to join them.
  - athst 16y ago
    Thanks. DC is an interesting one, you don't hear it mentioned very often.
  - neworbit 16y ago
    I don't see those valuations nor investor traction in Seattle, Boston, or LA. Not sure I ever have for Seattle and LA. Part of the reason there is that they aren't in the Valley echo chamber. Farther you get from home, the less press you get, therefore the fewer people thinking "what a great company".
    - jasonmcalacanis 16y ago
      at the Boston, Seattle and Los Angeles Open Angel Forums we have seen companies that are slightly less (10-35%) further along than the Valley and New York City, but that have valuations that are much less (50%). Folks in those cities are raising $250-500k at $1.5-2m valuations, where in NYC and the Bay Area/Valley we see $4-6M valuations. You are correct that those companies get less press.... however, they just have to be creative and successful and they will get it (RedFin and Groupon and Gowalla come to mind).
      - neworbit 16y ago
zackattack 16y ago
I have a globalization question. Where can I get data on which countries are spending money online, and which age groups are spending money online?

alain94040 16y ago

I liked that post from Jason, I found it quite insightful. I just disagree with the talent part. Yes, it's tough to hire the best in Silicon Valley, but frankly, moving to Oklahoma will not make it better. Is there an angel bubble? There is definitely a major uptick. I agree with his reasoning. Angels have money. Even the stock market is back higher than it was before the 2008 crash. So cash is available. But for how long?

thetrumanshow 16y ago
If there is a talent bubble causing salaries to surge, it must be HIGHLY localized... say, at the top 3% of talent.
- jasonmcalacanis 16y ago
  Actually, I've been hearing stories of 80-100k out of school for developers. That would be the high/highest end of salaries in cities like Boston, Austin, seattle, etc.

deleted 16y ago

[deleted]

austinnobody 16y ago

if i read one more title like this: blah, blah, and blah, oh my! or like this: blah or: How I Learned to Stop blah and Love the blah i'm gonna punch my monitor!

joshu 16y ago
top 10 titles not to use anymore!
danilocampos 16y ago
I'm not sure why you're being voted down. These cliches are awful. Not clever, not any signaling mechanism that you're a friend of Dorothy or a fan of Kubrick or anything else. Just awful. It's enough to prevent me reading the article unless the author has already banked some serious credibility with past work.
- austinnobody 16y ago
  non-haters gotta hate
jasonmcalacanis 16y ago
That's a really astute observation. Thanks for contributing to the discourse.

DanielRibeiro 16y ago

The following quote reminds me a lot of what pg said in "Why to Start a Startup in a Bad Economy" Let me repeat that: great startups grow independently of the stock market. The fact is, the public markets rarely have much effect on a startup at all.