14 ms·

Why entrepreneurs are leaving the Bay Area for their next startup

187 points by rafaelc 8y ago

nkkollaw 8y ago
I wonder why entrepreneurs don't come to Poland to build their product. Warsaw or Wroclaw in particular are vibrant, tech-oriented cities where life is about 1/4 of SF. If I had to bet my future on being able to building something with 1M, I would want to get 4 months instead of 1 for the money. Of course, SF might have better investing ecosystem, but once you got the money development should be done in a more appropriate place to buy yourself more time.
- bovermyer 8y ago
  How's the internet/infrastructure in Poland?
  - king_magic 8y ago
    I'd say very good. Talent very good as well. Have worked for a bunch of years with a team in Krakow, great people.
- HillaryBriss 8y ago
  > buy yourself more time but, does that extra time result in success? I mean, if it takes 4 times as long, then doing a better job of building a higher quality product is probably a losing strategy.
- cranklin 8y ago
  1M -> 4 months? o_O
- Toine 8y ago
  Networking.
  - navigatesol 8y ago
    >Networking Yeah, in SV you can hook up with all the USC and Stanford kids who bribed their way into college!
    - toephu2 8y ago
      That's only a very small percentage of the population that actually graduated from those schools.
- sl1ck731 8y ago
  Probably because if they are going to move its easier to just move to one of the other areas of the US. I'd assume cross-Atlantic movement would be after all options in the US, then NA were exhausted of which there are plenty and many up-and-coming areas.
- everdev 8y ago
  Timezones can be tricky if you need to interface with US stake holders or customers.
- qaq 8y ago
  tech is one thing but sales is key
- donretag 8y ago
  Venture capitalists need to be close to the CEO, who in turns needs to be close to the initial team. The Bay Area is popular because that is where the VCs are.
  - driverdan 8y ago
    They don't need to, they want to. There's really no need for it.
- beat 8y ago
  They're probably leaving for home, or for other cities where they have connections. The idea of an entrepreneur taking off from the hottest startup climate in the world to another country, where they don't speak the language, may not have direct access to their target customers, etc... it's just not viable. I'd love to see a startup culture of note form in places like Warsaw, but it's unrealistic to expect cost of living alone to bring brand-new startups there.
  - njepa 8y ago
    More specifically you need to be unique to gather critical mass. It doesn't just help being cheap, you have to cheap and something else that puts you a head of a lot of other similar places that are also cheap. And it has to be different enough that it is worth the extra effort. It can't just be, say, relatively easy to for example find an apartment, it has to be significantly easier so that it is an actual advantage. There have been a bunch of Swedes moving to Berlin the last 10 years, with SoundCloud being the most prominent example.
- mrkstu 8y ago
  The initial seed for a startup culture must be locally derived first. Looking at places like Austin and Utah (Silicon Slopes), the local scene developed first- now more outside money is coming now that the 'existence proof' that it can be done well in these places has been established. I think the necessary (but not completely sufficient) ingredients are lots of young CS grads who would like to stick in the area and a strong local entrepreneurial business culture. That will eventually create the base for successful startups and hopefully get a couple unicornish companies to blaze the trail.
- q3k 8y ago
  Political climate, for one thing. (recent anti-LGBT sentiment, anti-refugee/migrant sentiment, anti-EU sentiment and general right/nationalist movement uptick)
  - badpun 8y ago
    Racism is arguably strong in the US and yet founders are not leaving... I don’t think political climate is on average a strong factor in their decision making.
    - nkkollaw 8y ago
      Ehm... There is no more racism in Poland than in any other country. OP is Pole (from his profile), and some Poles who left the country are bitter about their own country and campaign against it.
      - badpun 8y ago
        I’m a Pole as well. These people you talk about are probably a textbook example of a vocal minority.
        nkkollaw 8y ago
        Sure, but he's one of them :-)
  - nkkollaw 8y ago
    > Political climate, for one thing. (recent anti-LGBT sentiment, anti-refugee/migrant sentiment, anti-EU sentiment and general right/nationalist movement uptick) Did you post this to start a flamewar, because you love campaigning against your own country, or just to spread misinformation? This comment should be flagged.
    - llukas 8y ago
      GP comment can be backed up with news reports and with quotes of MP/government members. What do you need more? > because you love campaigning against your own country Democracy works best when discussion is open.
- buryat 8y ago
  - laws - capital - language - networking - talent pool - weather&climate
- d136o 8y ago
  What are the long term prospects for freedom of expression there? [1] As a first generation immigrant I just don't think the opportunities for socio-economic mobility would be present for my (future) kids anywhere but in a liberal democracy. [1] https://www.theatlantic.com/magazine/archive/2018/10/poland-polarization/568324/ https://www.theatlantic.com/magazine/archive/2018/10/poland-...
  - badpun 8y ago
    Most statements in this piece are highly debatable or blown out of proportions. Poland gets a lot of bad press under the new government (which sucks IMO, but on the grounds of their mundane incompetence and stupidity - high even for modern democracies - and not because they’re some evil authoritarians) in part because Polish media is mostly controlled by anti-government journalists, who put very heavy spin on reality. And these are the people who the foreign journalists (Spiegel, NYT, Guardian etc) talk to about situation in Poland. IMO, we’re ruled by cynical simpletons, but probably no greater than Trump, Berlusconi, Cameron etc.
  - nkkollaw 8y ago
    The Atlantic seems to be reputable, but extremely biased towards left-wing causes. Left-wing causes include smearing Poland because of its supposedly right-wing government (some Poles don't agree it's right-wing, actually).
- scarmig 8y ago
  I know the reason I'd be scared to go is Poland's relatively high levels of politicized homophobia. There was this, as recently as checks notes earlier today. https://www.reuters.com/article/us-poland-lgbt/polands-ruling-party-picks-lgbt-rights-as-election-battlefront-idUSKCN1QW0T7 https://www.reuters.com/article/us-poland-lgbt/polands-rulin...
  - nkkollaw 8y ago
    Why are you obsessed with that? There are gays everywhere that live normal lives, here, just like in any other European country. As for your link: what are LGBT rights? It's unconstitutional to treat any citizen differently than the next in any western country, so there is nothing to whine about. LGBT rights are LGBT privileges, and Poland has rightfully decided to not let PC trump common sense. Sorry!
- deleted 8y ago
  [deleted]
- nathan_f77 8y ago
  > I wonder why entrepreneurs don't come to Poland to build their product. The answer is that immigration is very difficult. I couldn't find any freelancer or entrepreneur visas for Poland, so it looks like it would be impossible for me to relocate there and work on my own startup. I'm making it even more difficult for myself, because I would prefer to build a small sustainable business where I don't take any traditional investment or go through an accelerator. I also want to have a fully remote team, so I have no need for a physical office or local employees. Thailand seems to be the best option for now, and it's not through any government program. I'm actually employed by an agency called Iglu [1], so I have a business visa and work permit. However, I don't have a boss, and I find all of my own freelancing contracts. My startup also hires Iglu for development services, even though I'm the sole developer, so I am technically working for Iglu while building my own product. I think it's a really great setup, and it makes everything very easy, stable, and legal. But I would really like to find some similar opportunities in other countries. [1] https://iglu.net https://iglu.net
  - nkkollaw 8y ago
    You don't need to have a visa to start a company. I started one and it takes 5 minutes from a government website. After that you can stay anywhere in Europe for 6mo./year without a visa, which includes Poland.
HillaryBriss 8y ago
> ...one thing there is a lack of outside the Bay Area are the people who really know how to scale a fast-growing tech company This reinforces the notion that new tech startups don't really need to save money. They need to dominate their niche. They need to scale up fast and become the biggest player first.
- xj9 8y ago
  there are lots of ways to start a successful business that don't involve millions of dollars of seed money. you don't have to grow into a multinational conglomerate to be a sustainable enterprise, you know. if you have to huge for your business to make sense at all, maybe you just have a stupid idea. statistically, it is more likely that you are wrong than that you are a zuck-level-genius.
  - HillaryBriss 8y ago
    > there are lots of ways to start a successful business that don't involve millions of dollars of seed money. not disagreeing with you, but this article seems to be about the ones that do involve millions of dollars of seed money
linguae 8y ago
On a related topic, I’m wondering what careers are like for CS researchers in industry outside of Silicon Valley but still in the United States. My specialties are in systems software research (e.g., operating systems, distributed systems), machine learning, and databases. Most of the companies that I’m familiar with that do research in these areas are Silicon Valley-based, although there are some obvious options in Seattle (Amazon and Microsoft are headquartered there, and Facebook and Google have offices there). My ideal situation would be a culturally diverse area with a low-to-moderate cost of living. I like Silicon Valley due to its amenities and opportunities, but I could see myself starting a family within the next 3-5 years and I don’t think I’d be able to afford it in Silicon Valley unless I give up research, hit Leetcode really hard, and apply for a FAANG software engineering position.
- tomcam 8y ago
  The compiler folks at Microsoft are first rate and just good people.
- njepa 8y ago
  Generally the more specific your "requirement" is the more specific you have to get. So if you are looking for something specific you want to (to borrow a YC quote) "do things that doesn't scale". Talk to former faculty, colleagues and other contacts. Manually look up companies who do research or have business in your field. Make diagrams, charts and spreadsheets if you have to. That is how you would find the things that no one would generally advice you to do since they wouldn't know about them because it would be specific to your situation. (I hope that made sense).
monsterbash506 8y ago
We don't need high-tax, low freedom SF. People can do work over the internet. Look at GitLab. Hundreds of employees and no physical location. Imagine making a 6 figure income but living in a place with minimal state and local income taxes. We are entering the period of fully digital corporations. The ultimate form of this is the DAO (see Bisq, Maker, Augur sort of).
- butstillbad99 8y ago
  You seem to assume SF salaries will be offered in places that are also super cheap? Do you expect founders and investors to ignore the cost of living reality in Nowheresville just cause?
  - malvosenior 8y ago
    Why on earth would the value someone added to a company have anything to do with the cost of living where they live? Either you support remote or you don't but I would not expect different remote salaries based on where that remote employee lives. I know some companies do this, but I can't imagine it's a practice that will continue once remote work becomes the norm as it makes little sense.
    - deleted 8y ago
      [deleted]
    - blizkreeg 8y ago
      What you're proposing is out of touch with reality. Compensation is based on value added, but also based on geography. Bartenders in South Dakota don't make the same as bartenders in San Francisco for a reason, though they add the same value to an establishment. Most companies would stop hiring remote if they had to pay SF salaries - that's just the fact.
      - monsterbash506 8y ago
        The companies could be incorporated in remote areas as well, and use the benefits to provide competitive salaries.
potatofarmer45 8y ago
SV isn't the best fit for a lot of startups. It really shouldn't be the default location for all startups especially since there are different options that offer different things (NYC, Denver/Boulder, Austin etc). The Bay Area has 3 things that set it apart from anywhere else and startups that really need this have no other real choice: Investors who are willing to invest super early Lots of top tier engineers An extremely optimistic culture Investors- Our startup did fundraising on both east/west coast. Valuations, investor quality and potential help was relatively the same, but those in the the Bay Area were completely fine in investing in a pre-rev idea. That was, and still is inconceivable outside. A NYC fund flatly told us they will do no investments until we reach 50k MRR. That wasn't a requirement at SV and we got the initial seed funding as a result. We do something very tech heavy and quite at the forefront in our field. We need really good engineers and most these types of specialists currently are employed at a Google or Facebook etc. In theory they should be super expensive and impossible to dislodge from these tech giants but what I find is that these super smart people get bored after a few years. They know their worth and that there will always be high paying jobs for them, but they can be persuaded to join a startup on a lot lower salary because they get a lot of freedom and ability to make a difference. A lot of the people that complain about expensive demanding engineers in SV are basically a bunch of PMs or salespeople who want a CTO to build a front end app. If you actually have interesting tech, finding engineers at a discount is quite feasible. The last thing is about culture. It's like the YC interview day. We spent the entire day before and after the interview (and snuck in again the next) because the other teams you meet- the optimism and energy is infectious. It's the same feeling the morning of a marathon where you're worried it's too cold and wet, but the instant you see the crowd, everything feels right. If you're doing something that counter-intuitive, and changes existing thinking, then culture is essential. Most startups, even in the accelerators, are ops businesses. They utilize tech, but business not tech is their key driver. There's nothing wrong with being that kind of startup, but if that is the case, then the Bay Area isn't a good a fit which is what this article says. Your customers aren't there, it's expensive, and there are other options. But if you do have a early crazy idea that is based around a key piece of tech, the Bay Area is still the best choice by far.
- blizkreeg 8y ago
  what is your startup working on?
rgrieselhuber 8y ago
I highly recommend that anybody who loves SF and startup culture stay in the Bay Area. It's best for everybody.
gumby 8y ago
This is the key part of this article (emphasis mine): > This kind of story is often framed as a tug of war between Silicon Valley and the rest of the country. But Silicon Valley isn't going any where, and for every startup or founder who leaves the Bay Area, someone else graduates from Stanford or wants to move here. This is about tech becoming a bigger part of the overall economy.
- sanderjd 8y ago
  That does seem to be the crux of the article, but I find it very unsatisfying without data. It's extremely improbable that it is exactly 1 person leaving to 1 person graduating from Stanford or wanting to come. So what is the actual trend? This article doesn't know.
  - njepa 8y ago
    It is hard, if not impossible, to say. What I think one could say is that these things doesn't generally happen in the way people think. Since there is generally a lot of inertia that prevents people from seeing what is going on. People expects shifts, but it is usually more similar to leaving things on the table. Because this is hard to figure out, it is therefor instead more important to you make these decisions for good reasons. And that what I think is the real problem for the Bay Area (and other regions in a similar position). That you end up losing a lot of potential for no good reason.
  - nostrademons 8y ago
    In the absence of housing construction & vacancies, it's probably pretty close to 1 person leaving to 1 person arriving. The limiting factor in the Bay Area is usually housing; if there were really a net outmigration, you'd see vacancies and a drop in rents. If there were a large net inmigration, you'd see new construction (which you do to some extent, but not a lot). There's probably a mild net inflow that's accounted for by new construction, people doubling up in houses that used to be single-family, and homelessness. The continued rise in housing prices seems to indicate a large latent demand, i.e. many more people want to come or want to stay but are discouraged because they can't get housing at reasonable prices.
dumbfoundded 8y ago
As someone in the hemp business, I have a relatively unique reason. There's no hemp (CBD, non-psychoactive) program in Oregon. You can do cannabis in California but not CBD. I moved everything to Oregon. It's funny that the cannabis industry in California is actually trying to slow down any regulation allowing THC-free, hemp derived products.
- moate 8y ago
  Did the "recent" changes to the farm bill affect this in either the short or long term? Just curious.
  - dumbfoundded 8y ago
    Absolutely. Long term I think it's going to open up in many states.
hellllllllooo 8y ago
Seems reasonable but not really a lot of data points in this article to show a real trend. It's just an option piece. Could just as easily point at a lot of startups staying and growing in the Bay Area and write an article saying why Bay Area is still the place to be.
gesman 8y ago
California better stop punishing entrepreneurs with it's heavy tax stick before experiencing disaster in it's tax revenues. Exodus seems to be accelerating.
- jdhn 8y ago
  I've heard the argument that despite the heavy tax burden, it's just treated as another cost of doing business due to all the benefits of being in the Bay Area (depth of talent pool, fantastic network support, oodles and oodles of VC money, etc).
- hellisothers 8y ago
  Talk of exodus is certainly accelerating
- nrb 8y ago
  This viewpoint doesn't appear to jive with the one being portrayed currently[1], that the exodus is only among the poor/middle-class and that the immigration of the rich and high-earners is actually accelerating. 1: https://www.latimes.com/politics/la-pol-sac-skelton-income-tax-california-wealthy-20190311-story.html https://www.latimes.com/politics/la-pol-sac-skelton-income-t...
  - stcredzero 8y ago
    the exodus is only among the poor/middle-class and that the immigration of the rich and high-earners is actually accelerating. Is that supposed to make the groupthink better or worse? I suspect worse, as it's reducing the viewpoint diversity, as viewpoint is affected by socioeconomic status and livelihood.
    - hellllllllooo 8y ago
      I think the point is that tax isn't driving an exodus of businesses/entrepreneurs as OP suggested. The opposite is true and it's driving out lower income people. Oakland, for example, is growing like SF with 10+ tall buildings going up this year downtown to accommodate tech companies and their employees.
auston 8y ago
FB group for anyone else considering leaving: https://www.facebook.com/groups/373683909882919/ https://www.facebook.com/groups/373683909882919/ I can tell you that Miami would definitely like you here, even our Mayor cosigns: https://twitter.com/FrancisSuarez/status/1100425644968738822 https://twitter.com/FrancisSuarez/status/1100425644968738822
- yohann305 8y ago
  A group of SV VCs have moved to Miami and are in the process of building a whole neighborhood called "Magic City" dedicated to startups and entrepreneurship. It's an opportunity zone, so they're using their stock investments "tax free". A city like Miami has had a very hard time creating a startup ecosystem, many have tried and failed, but it's a matter of time for it to happen. Source: https://magiccitydistrict.com/ https://magiccitydistrict.com/ Note: what you see in the pictures are not built yet
  - auston 8y ago
    IDK if those are SV VCs but I applaud their effort nonetheless.
- opportune 8y ago
  I would love to start a business in Miami but the COL seems pretty high. I feel like it's probably the best place in the world to start a latin america-focused tech company (social networking, streaming, fintech, etc.) and it seems like a great place to live. Does anybody happen to know what kind of companies the VC's there are focused on - could see pure tech plays being outside of their core competencies and thus unlikely to get funded.
  - sbilstein 8y ago
    I grew up there, I'm a Peruvian immigrant and just don't understand why people think Miami is good for tech. Solid engineers just move to the Bay Area; who wants to keep living in Miami which has such a cultural aversion to education, a major machismo problem, and frequent flooding. If you want to work with LATAM, hire Latinx engineers in the Bay (there are lots of us) and hire tech people in Argentina, Mexico, Chile, and Brazil. Lots of talented folks in all those places.
basseq 8y ago
What a terrible, clickbait headline. In short (first sentence), tech start-ups are setting up shop in non-SV locations where they can find cheaper rent and more affordable talent. This is a good thing because it means a) physical proximity to funding sources is less important, b) more funding sources are available, c) good talent is everywhere, and d) the trend of tech becoming part of the general economy (dare I say democratized?) continues.
justboxing 8y ago
Ah, If I had a dollar for every time a post like this shows up on HN, I'd be a millionaire. It's either this, or some personal anecdote of how some founder took his startup to Austin, Detroit, Nashville, Seattle .. < insert gentrifying city here > and they are kicking butt. Last I checked, San Francisco alone accounted for 25% of the V.C Money and San Francisco + Silicon Valley accounts for over 45% of V.C. Money. Source: https://www.citylab.com/life/2018/03/the-extreme-geographic-inequality-of-high-tech-venture-capital/552026/ https://www.citylab.com/life/2018/03/the-extreme-geographic-... > The Bay Area—that is, San Francisco and Silicon Valley—currently accounts for nearly 45 percent of total venture capital investment in the entire United States and there is no tug of war. >This kind of story is often framed as a tug of war between Silicon Valley and the rest of the country Write all you want, but if you are looking for funding (which most entrepreneurs are), then San Francisco and Silicon Valley is still the place to be at.
- bwb 8y ago
  Well said.
- bdcravens 8y ago
  I don't think it's a matter of "SF dying for startups" as much as it points out that starting there, and then moving elsewhere when you've moved to the next level, is very viable. Basically SF is to startups as Nashville is to country musicians or Los Angeles is to actors.
- dmode 8y ago
  There was an article voted up in HN on how we are in Peak California and Bay Area. And someone pointed out that this narrative has been going on for decades.
  - r00fus 8y ago
    Meme: beleaguered Apple / SV
- souprock 8y ago
  The landlords without rent control are enjoying this, as are the homeowners moving out. That 45% feels a lot smaller once you realize that your money doesn't go very far. It's also not all your 45%. You have more competitors for that investment, so you can expect a smaller slice of the pie or a reduced chance at getting some pie.
KorematsuFred 8y ago
The only reason I am still in SV is because I am stuck on H1B. I think having a better immigration system is a Red president's best bet to finally spite the largest Blue state. You need to bring in talented engineers from world over and let them flood boise, Reno, Austin, Sarasota and Denver. See the Silicon Valley crumble.
- wavefunction 8y ago
  That would be a terrible way to run a national economy. But perhaps I shouldn't use the speculative tense...
- dmode 8y ago
  H1B is not location specific. You are free to work from anywhere in the US you find employment
  - KorematsuFred 8y ago
    It is job specific which means I can not go to Texas and take up ranching or just freelance from Reno.
opportune 8y ago
I'm heavily considering Tallinn for a tech startup - It's easy to get residence status (IIRC basically requires a ~$60k investment in a business you are starting) and extremely easy to start a business. You get access to the EU labor/trade markets in a low COL city which already has a decent sized tech and entrepreneurship presence. The government is actively courting you and in general seems very easy to interact with and move forward with - reducing the PM/lawyer overhead of operating a medium sized business in other countries. And if you stay there long enough it's not overly complicated to get EU permanent resident status. Overall, Tallinn beats SV in almost every way except for two - developer talent/concentration (though it's still pretty good) and local capital.
- dkfmn 8y ago
  I'd suggest asking what is uniquely beneficial about Tallinn that will make your business more likely to succeed. Lots of places are cheap and the two exceptions you identify, talent and capital, are absolutely critical to the success of high-growth tech companies.
  - opportune 8y ago
    Very good point. I am actually visiting Tallinn later this year to try to meet with people in the entrepeneurship scene and learn more about the city. While you're right that talent and capital are important, it's also true that no place on the planet has more capital and software talent than SV. So you're never going to beat SV measuring only those metrics. The challenge of an entrepeneur who wants to found a startup outside of the Bay area is to pick a location that is beneficial in other ways while not sacrificing too much in terms of capital and talent. I'm not too sure about the local capital in Tallinn (not that you necessarily need to raise money locally) but I do know it has a pretty strong developer community by european standards, maybe in the top 5 in europe. And it also excels in terms of government support for entrepreneurship and, afaik, local cybersecurity talent. So it's not just a cheap place, it's a cheap place that also has basically every other thing that makes founding a software business attractive with the possible exception of capital.
justfor1comment 8y ago
As an engineer in the Bay Area I would recommend most startups to locate themselves outside the bay. Especially if they operate a low margins business. Rent is expensive and so are the employee salaries over here. I have many Bay Area startup recruiters reach out to me with rather interesting projects. However, a quick look at Glassdoor reveals that the liquid portion of the salaries they offer is so low that I would need to live in a trailer to work there.
- i_phish_cats 8y ago
  If only there were trailer parks or other cheaper housing options around here. Fuck NIMBY's.
  - stcredzero 8y ago
    If only there were trailer parks or other cheaper housing options around here. There's one in Milpitas.
    - chipotle_coyote 8y ago
      There are several large ones in Sunnyvale and San Jose, too. But even mobile homes are expensive in Silicon Valley by the standards of most other places; at this point, $150K would be a steal, and prices approaching $300K aren't uncommon -- and monthly land rental fees in the park can easily be more than the mortgage. (For instance, a listing I just pulled up on Zillow is a reasonable-ish $155K for a 3br/2ba manufactured home in Sunnyvale, for an estimated mortgage of just over $600 a month...and a rental fee of another $1600 a month.)
  - masonic 8y ago
    It's the YIMBY developers that are destroying mobile home parks here, including the two closest to me right now (on El Camino near Poplar, and the former Blue Bonnet complex at Fair Oaks and Evelyn).
jedberg 8y ago
The solution to this is remote work. The main benefits of being in the valley are access to investors/capital. This advantage mostly only applies to executives. So have your executives in SV and have everyone else be wherever they want to be that is cheaper and nicer for them.
- johannes1234321 8y ago
  Depending on the amount of communication needed for being efficient. I work 10+ years in a Rendite First organisation and there are regular times where I think "damn, discussing this over the water cooler, while running into each other, would be more efficient" than a chat exchange or setting up a video/phone conf. Of course on the plus side I have the uninterrupted working hours, where nobody walks in to me and flexible hours to arrange my life and the tendency to not fully separate private and work which easily leads to free overtime ;)
  - jedberg 8y ago
    I actually saw an interesting solution to this. I don't remember what company it was, but they had a designated "water cooler time" where they had a video chat up every day that anyone could pop into and talk about whatever they want, business or not. It gave people a chance to have those serendipitous conversations and built team morale.
    - johannes1234321 8y ago
      What I do in my team is dedicate time in regular meetings for "fun talk" which is non work related, but still different from a true informal thing. What friends of mine are doing is "nearmote" everybody still in a one or two our distance, so you can meet up on relatively short notice and can schedule regular team meetings, but also have benefits of remote.
    - state_less 8y ago
      I'll second this. Turning the camera on 15min in the morning to chat about anything: pressing issues, vacation or home life makes for good digital water cooler time.
ssimoni 8y ago
You should be close to your customers. My cofounders and I coded most of the MVP in the bay because we all happened to be living there, but then we started going to tradeshows and saw that most of our customers were in NYC so we moved east. If you are doing a startup where you are a B2B tech company that sells to other tech companies, the bay area is great.
babyslothzoo 8y ago
TLDR: cost of living But leaving for another west coast city is not going to improve things much, housing and cost of living in Los Angeles, Seattle, Portland, etc are also very high when compared to costs elsewhere in the USA. The midwest and south should be aggressively courting entrepreneurs based on cost of living alone.
- analog31 8y ago
  We are, but nobody has discovered the silver bullet, if there even is one. Every medium sized city dreams of being the Something Valley.
  - souprock 8y ago
    Eh, go for it? My place began with a few people out of the local university and an angel investor. There was organic growth and an actual profit. The exit was a company of about 40 people being sold ($36.4 million in 2019 dollars) to a large defense contractor. That's in Melbourne, Florida. There are several start-ups in the area created by former employees, generally beginning on personal funds. This also works in Longmont, Colorado. I have a relative who did a couple businesses starting from personal funds. One sold for millions of dollars, and the other is ongoing with decent success.
    - analog31 8y ago
      Indeed, there are scattered start-ups everywhere. The university in my town is a major center for biology research, and has resulted in formation of a number of businesses, some of which have grown to respectable size. We have Epic. I have my own side-business, but not even scalable to a level of interest for a VC. But still nothing at a level to suggest the tide turning away from the big coastal cities.
dmode 8y ago
Narrative: Startups are moving out of Bay Area Reality: 2018 VC funding: Bay Area = $45bn, Austin = $1.5bn
sonnyblarney 8y ago
For 'big bet' things it might make a lot of sense. I can see why Uber, AirBnB, and especially OpenAI are going to be there. But for other, slightly niche businesses, wherein you're competing in a vertical/horizontal that may not be specifically tech, it might make sense to be elsewhere. Fashion heavy, Mining & Materials, Manufacturing, Fintech, Agriculture etc. I suggest it might be ok to be somewhere else. As a very crude rule of thumb, if you need 'good engineers' but not 'world class engineers' i.e. the problem space is more or less 'domain' and not 'tech' ... well you can get good engineers in a lot of places, and domain knowledge is not inherently in the Valley.
beager 8y ago
The notion that the Bay Area contains all the wisdom about high-growth, VC-backed success, if true, seems to me like a great opportunity for those who have been successful at it in the Bay Area to consult for those who want to replicate it for the rest of the country. It may well be more lucrative for those people to stay put and startup again, but there’s certainly a tier of people who are craving adventure and would much more enjoy sharing their blueprint for success with Austin, Boulder, Atlanta, SLC, Portland, on and on. If I were a big VC firm (and sure, this might be a good reason why I’m not), I’d be forward-deploying my analysts and recruiting a class of EIRs from the flyover states. It’s a new flavor of alpha for VC: sourcing dealflow from the entire US.
thrax 8y ago
Please God yes.
crissyw 8y ago
For anyone else looking to move away from the Bay Area, I'm hiring in Jakarta, Indonesia :) Email me at crystal@go-jek.com https://docs.google.com/document/d/1aWeK0dReWeufZUN11f2QMoEP3Of5aok7295msDJGxOs/edit https://docs.google.com/document/d/1aWeK0dReWeufZUN11f2QMoEP...

187 points by rafaelc 8y ago

I wonder why entrepreneurs don't come to Poland to build their product. Warsaw or Wroclaw in particular are vibrant, tech-oriented cities where life is about 1/4 of SF. If I had to bet my future on being able to building something with 1M, I would want to get 4 months instead of 1 for the money. Of course, SF might have better investing ecosystem, but once you got the money development should be done in a more appropriate place to buy yourself more time.

bovermyer 8y ago
How's the internet/infrastructure in Poland?
- king_magic 8y ago
  I'd say very good. Talent very good as well. Have worked for a bunch of years with a team in Krakow, great people.
HillaryBriss 8y ago
> buy yourself more time but, does that extra time result in success? I mean, if it takes 4 times as long, then doing a better job of building a higher quality product is probably a losing strategy.
cranklin 8y ago
1M -> 4 months? o_O
Toine 8y ago
Networking.
- navigatesol 8y ago
  >Networking Yeah, in SV you can hook up with all the USC and Stanford kids who bribed their way into college!
  - toephu2 8y ago
    That's only a very small percentage of the population that actually graduated from those schools.
sl1ck731 8y ago
Probably because if they are going to move its easier to just move to one of the other areas of the US. I'd assume cross-Atlantic movement would be after all options in the US, then NA were exhausted of which there are plenty and many up-and-coming areas.
everdev 8y ago
Timezones can be tricky if you need to interface with US stake holders or customers.
qaq 8y ago
tech is one thing but sales is key
donretag 8y ago
Venture capitalists need to be close to the CEO, who in turns needs to be close to the initial team. The Bay Area is popular because that is where the VCs are.
- driverdan 8y ago
  They don't need to, they want to. There's really no need for it.
beat 8y ago
They're probably leaving for home, or for other cities where they have connections. The idea of an entrepreneur taking off from the hottest startup climate in the world to another country, where they don't speak the language, may not have direct access to their target customers, etc... it's just not viable. I'd love to see a startup culture of note form in places like Warsaw, but it's unrealistic to expect cost of living alone to bring brand-new startups there.
- njepa 8y ago
  More specifically you need to be unique to gather critical mass. It doesn't just help being cheap, you have to cheap and something else that puts you a head of a lot of other similar places that are also cheap. And it has to be different enough that it is worth the extra effort. It can't just be, say, relatively easy to for example find an apartment, it has to be significantly easier so that it is an actual advantage. There have been a bunch of Swedes moving to Berlin the last 10 years, with SoundCloud being the most prominent example.
mrkstu 8y ago
The initial seed for a startup culture must be locally derived first. Looking at places like Austin and Utah (Silicon Slopes), the local scene developed first- now more outside money is coming now that the 'existence proof' that it can be done well in these places has been established. I think the necessary (but not completely sufficient) ingredients are lots of young CS grads who would like to stick in the area and a strong local entrepreneurial business culture. That will eventually create the base for successful startups and hopefully get a couple unicornish companies to blaze the trail.
q3k 8y ago
Political climate, for one thing. (recent anti-LGBT sentiment, anti-refugee/migrant sentiment, anti-EU sentiment and general right/nationalist movement uptick)
- badpun 8y ago
  Racism is arguably strong in the US and yet founders are not leaving... I don’t think political climate is on average a strong factor in their decision making.
  - nkkollaw 8y ago
    Ehm... There is no more racism in Poland than in any other country. OP is Pole (from his profile), and some Poles who left the country are bitter about their own country and campaign against it.
    - badpun 8y ago
      I’m a Pole as well. These people you talk about are probably a textbook example of a vocal minority.
      - nkkollaw 8y ago
        Sure, but he's one of them :-)
- nkkollaw 8y ago
  > Political climate, for one thing. (recent anti-LGBT sentiment, anti-refugee/migrant sentiment, anti-EU sentiment and general right/nationalist movement uptick) Did you post this to start a flamewar, because you love campaigning against your own country, or just to spread misinformation? This comment should be flagged.
  - llukas 8y ago
    GP comment can be backed up with news reports and with quotes of MP/government members. What do you need more? > because you love campaigning against your own country Democracy works best when discussion is open.
buryat 8y ago
- laws - capital - language - networking - talent pool - weather&climate
d136o 8y ago
What are the long term prospects for freedom of expression there? [1] As a first generation immigrant I just don't think the opportunities for socio-economic mobility would be present for my (future) kids anywhere but in a liberal democracy. [1] https://www.theatlantic.com/magazine/archive/2018/10/poland-polarization/568324/ https://www.theatlantic.com/magazine/archive/2018/10/poland-...
- badpun 8y ago
  Most statements in this piece are highly debatable or blown out of proportions. Poland gets a lot of bad press under the new government (which sucks IMO, but on the grounds of their mundane incompetence and stupidity - high even for modern democracies - and not because they’re some evil authoritarians) in part because Polish media is mostly controlled by anti-government journalists, who put very heavy spin on reality. And these are the people who the foreign journalists (Spiegel, NYT, Guardian etc) talk to about situation in Poland. IMO, we’re ruled by cynical simpletons, but probably no greater than Trump, Berlusconi, Cameron etc.
- nkkollaw 8y ago
  The Atlantic seems to be reputable, but extremely biased towards left-wing causes. Left-wing causes include smearing Poland because of its supposedly right-wing government (some Poles don't agree it's right-wing, actually).
scarmig 8y ago
I know the reason I'd be scared to go is Poland's relatively high levels of politicized homophobia. There was this, as recently as checks notes earlier today. https://www.reuters.com/article/us-poland-lgbt/polands-ruling-party-picks-lgbt-rights-as-election-battlefront-idUSKCN1QW0T7 https://www.reuters.com/article/us-poland-lgbt/polands-rulin...
- nkkollaw 8y ago
  Why are you obsessed with that? There are gays everywhere that live normal lives, here, just like in any other European country. As for your link: what are LGBT rights? It's unconstitutional to treat any citizen differently than the next in any western country, so there is nothing to whine about. LGBT rights are LGBT privileges, and Poland has rightfully decided to not let PC trump common sense. Sorry!
deleted 8y ago
[deleted]
nathan_f77 8y ago
> I wonder why entrepreneurs don't come to Poland to build their product. The answer is that immigration is very difficult. I couldn't find any freelancer or entrepreneur visas for Poland, so it looks like it would be impossible for me to relocate there and work on my own startup. I'm making it even more difficult for myself, because I would prefer to build a small sustainable business where I don't take any traditional investment or go through an accelerator. I also want to have a fully remote team, so I have no need for a physical office or local employees. Thailand seems to be the best option for now, and it's not through any government program. I'm actually employed by an agency called Iglu [1], so I have a business visa and work permit. However, I don't have a boss, and I find all of my own freelancing contracts. My startup also hires Iglu for development services, even though I'm the sole developer, so I am technically working for Iglu while building my own product. I think it's a really great setup, and it makes everything very easy, stable, and legal. But I would really like to find some similar opportunities in other countries. [1] https://iglu.net https://iglu.net
- nkkollaw 8y ago
  You don't need to have a visa to start a company. I started one and it takes 5 minutes from a government website. After that you can stay anywhere in Europe for 6mo./year without a visa, which includes Poland.

HillaryBriss 8y ago

> ...one thing there is a lack of outside the Bay Area are the people who really know how to scale a fast-growing tech company This reinforces the notion that new tech startups don't really need to save money. They need to dominate their niche. They need to scale up fast and become the biggest player first.

xj9 8y ago
there are lots of ways to start a successful business that don't involve millions of dollars of seed money. you don't have to grow into a multinational conglomerate to be a sustainable enterprise, you know. if you have to huge for your business to make sense at all, maybe you just have a stupid idea. statistically, it is more likely that you are wrong than that you are a zuck-level-genius.
- HillaryBriss 8y ago
  > there are lots of ways to start a successful business that don't involve millions of dollars of seed money. not disagreeing with you, but this article seems to be about the ones that do involve millions of dollars of seed money

linguae 8y ago

On a related topic, I’m wondering what careers are like for CS researchers in industry outside of Silicon Valley but still in the United States. My specialties are in systems software research (e.g., operating systems, distributed systems), machine learning, and databases. Most of the companies that I’m familiar with that do research in these areas are Silicon Valley-based, although there are some obvious options in Seattle (Amazon and Microsoft are headquartered there, and Facebook and Google have offices there). My ideal situation would be a culturally diverse area with a low-to-moderate cost of living. I like Silicon Valley due to its amenities and opportunities, but I could see myself starting a family within the next 3-5 years and I don’t think I’d be able to afford it in Silicon Valley unless I give up research, hit Leetcode really hard, and apply for a FAANG software engineering position.

tomcam 8y ago
The compiler folks at Microsoft are first rate and just good people.
njepa 8y ago
Generally the more specific your "requirement" is the more specific you have to get. So if you are looking for something specific you want to (to borrow a YC quote) "do things that doesn't scale". Talk to former faculty, colleagues and other contacts. Manually look up companies who do research or have business in your field. Make diagrams, charts and spreadsheets if you have to. That is how you would find the things that no one would generally advice you to do since they wouldn't know about them because it would be specific to your situation. (I hope that made sense).

monsterbash506 8y ago

We don't need high-tax, low freedom SF. People can do work over the internet. Look at GitLab. Hundreds of employees and no physical location. Imagine making a 6 figure income but living in a place with minimal state and local income taxes. We are entering the period of fully digital corporations. The ultimate form of this is the DAO (see Bisq, Maker, Augur sort of).

butstillbad99 8y ago
You seem to assume SF salaries will be offered in places that are also super cheap? Do you expect founders and investors to ignore the cost of living reality in Nowheresville just cause?
- malvosenior 8y ago
  Why on earth would the value someone added to a company have anything to do with the cost of living where they live? Either you support remote or you don't but I would not expect different remote salaries based on where that remote employee lives. I know some companies do this, but I can't imagine it's a practice that will continue once remote work becomes the norm as it makes little sense.
  - deleted 8y ago
    [deleted]
  - blizkreeg 8y ago
    What you're proposing is out of touch with reality. Compensation is based on value added, but also based on geography. Bartenders in South Dakota don't make the same as bartenders in San Francisco for a reason, though they add the same value to an establishment. Most companies would stop hiring remote if they had to pay SF salaries - that's just the fact.
    - monsterbash506 8y ago
      The companies could be incorporated in remote areas as well, and use the benefits to provide competitive salaries.

potatofarmer45 8y ago

SV isn't the best fit for a lot of startups. It really shouldn't be the default location for all startups especially since there are different options that offer different things (NYC, Denver/Boulder, Austin etc). The Bay Area has 3 things that set it apart from anywhere else and startups that really need this have no other real choice: Investors who are willing to invest super early Lots of top tier engineers An extremely optimistic culture Investors- Our startup did fundraising on both east/west coast. Valuations, investor quality and potential help was relatively the same, but those in the the Bay Area were completely fine in investing in a pre-rev idea. That was, and still is inconceivable outside. A NYC fund flatly told us they will do no investments until we reach 50k MRR. That wasn't a requirement at SV and we got the initial seed funding as a result. We do something very tech heavy and quite at the forefront in our field. We need really good engineers and most these types of specialists currently are employed at a Google or Facebook etc. In theory they should be super expensive and impossible to dislodge from these tech giants but what I find is that these super smart people get bored after a few years. They know their worth and that there will always be high paying jobs for them, but they can be persuaded to join a startup on a lot lower salary because they get a lot of freedom and ability to make a difference. A lot of the people that complain about expensive demanding engineers in SV are basically a bunch of PMs or salespeople who want a CTO to build a front end app. If you actually have interesting tech, finding engineers at a discount is quite feasible. The last thing is about culture. It's like the YC interview day. We spent the entire day before and after the interview (and snuck in again the next) because the other teams you meet- the optimism and energy is infectious. It's the same feeling the morning of a marathon where you're worried it's too cold and wet, but the instant you see the crowd, everything feels right. If you're doing something that counter-intuitive, and changes existing thinking, then culture is essential. Most startups, even in the accelerators, are ops businesses. They utilize tech, but business not tech is their key driver. There's nothing wrong with being that kind of startup, but if that is the case, then the Bay Area isn't a good a fit which is what this article says. Your customers aren't there, it's expensive, and there are other options. But if you do have a early crazy idea that is based around a key piece of tech, the Bay Area is still the best choice by far.

blizkreeg 8y ago
what is your startup working on?

rgrieselhuber 8y ago

I highly recommend that anybody who loves SF and startup culture stay in the Bay Area. It's best for everybody.

gumby 8y ago

This is the key part of this article (emphasis mine): > This kind of story is often framed as a tug of war between Silicon Valley and the rest of the country. But Silicon Valley isn't going any where, and for every startup or founder who leaves the Bay Area, someone else graduates from Stanford or wants to move here. This is about tech becoming a bigger part of the overall economy.

sanderjd 8y ago
That does seem to be the crux of the article, but I find it very unsatisfying without data. It's extremely improbable that it is exactly 1 person leaving to 1 person graduating from Stanford or wanting to come. So what is the actual trend? This article doesn't know.
- njepa 8y ago
  It is hard, if not impossible, to say. What I think one could say is that these things doesn't generally happen in the way people think. Since there is generally a lot of inertia that prevents people from seeing what is going on. People expects shifts, but it is usually more similar to leaving things on the table. Because this is hard to figure out, it is therefor instead more important to you make these decisions for good reasons. And that what I think is the real problem for the Bay Area (and other regions in a similar position). That you end up losing a lot of potential for no good reason.
- nostrademons 8y ago
  In the absence of housing construction & vacancies, it's probably pretty close to 1 person leaving to 1 person arriving. The limiting factor in the Bay Area is usually housing; if there were really a net outmigration, you'd see vacancies and a drop in rents. If there were a large net inmigration, you'd see new construction (which you do to some extent, but not a lot). There's probably a mild net inflow that's accounted for by new construction, people doubling up in houses that used to be single-family, and homelessness. The continued rise in housing prices seems to indicate a large latent demand, i.e. many more people want to come or want to stay but are discouraged because they can't get housing at reasonable prices.

dumbfoundded 8y ago

As someone in the hemp business, I have a relatively unique reason. There's no hemp (CBD, non-psychoactive) program in Oregon. You can do cannabis in California but not CBD. I moved everything to Oregon. It's funny that the cannabis industry in California is actually trying to slow down any regulation allowing THC-free, hemp derived products.

moate 8y ago
Did the "recent" changes to the farm bill affect this in either the short or long term? Just curious.
- dumbfoundded 8y ago
  Absolutely. Long term I think it's going to open up in many states.

hellllllllooo 8y ago

Seems reasonable but not really a lot of data points in this article to show a real trend. It's just an option piece. Could just as easily point at a lot of startups staying and growing in the Bay Area and write an article saying why Bay Area is still the place to be.

gesman 8y ago

California better stop punishing entrepreneurs with it's heavy tax stick before experiencing disaster in it's tax revenues. Exodus seems to be accelerating.

jdhn 8y ago
I've heard the argument that despite the heavy tax burden, it's just treated as another cost of doing business due to all the benefits of being in the Bay Area (depth of talent pool, fantastic network support, oodles and oodles of VC money, etc).
hellisothers 8y ago
Talk of exodus is certainly accelerating
nrb 8y ago
This viewpoint doesn't appear to jive with the one being portrayed currently[1], that the exodus is only among the poor/middle-class and that the immigration of the rich and high-earners is actually accelerating. 1: https://www.latimes.com/politics/la-pol-sac-skelton-income-tax-california-wealthy-20190311-story.html https://www.latimes.com/politics/la-pol-sac-skelton-income-t...
- stcredzero 8y ago
  the exodus is only among the poor/middle-class and that the immigration of the rich and high-earners is actually accelerating. Is that supposed to make the groupthink better or worse? I suspect worse, as it's reducing the viewpoint diversity, as viewpoint is affected by socioeconomic status and livelihood.
  - hellllllllooo 8y ago
    I think the point is that tax isn't driving an exodus of businesses/entrepreneurs as OP suggested. The opposite is true and it's driving out lower income people. Oakland, for example, is growing like SF with 10+ tall buildings going up this year downtown to accommodate tech companies and their employees.

auston 8y ago

FB group for anyone else considering leaving: https://www.facebook.com/groups/373683909882919/ https://www.facebook.com/groups/373683909882919/ I can tell you that Miami would definitely like you here, even our Mayor cosigns: https://twitter.com/FrancisSuarez/status/1100425644968738822 https://twitter.com/FrancisSuarez/status/1100425644968738822

yohann305 8y ago
A group of SV VCs have moved to Miami and are in the process of building a whole neighborhood called "Magic City" dedicated to startups and entrepreneurship. It's an opportunity zone, so they're using their stock investments "tax free". A city like Miami has had a very hard time creating a startup ecosystem, many have tried and failed, but it's a matter of time for it to happen. Source: https://magiccitydistrict.com/ https://magiccitydistrict.com/ Note: what you see in the pictures are not built yet
- auston 8y ago
  IDK if those are SV VCs but I applaud their effort nonetheless.
opportune 8y ago
I would love to start a business in Miami but the COL seems pretty high. I feel like it's probably the best place in the world to start a latin america-focused tech company (social networking, streaming, fintech, etc.) and it seems like a great place to live. Does anybody happen to know what kind of companies the VC's there are focused on - could see pure tech plays being outside of their core competencies and thus unlikely to get funded.
- sbilstein 8y ago
  I grew up there, I'm a Peruvian immigrant and just don't understand why people think Miami is good for tech. Solid engineers just move to the Bay Area; who wants to keep living in Miami which has such a cultural aversion to education, a major machismo problem, and frequent flooding. If you want to work with LATAM, hire Latinx engineers in the Bay (there are lots of us) and hire tech people in Argentina, Mexico, Chile, and Brazil. Lots of talented folks in all those places.

basseq 8y ago

What a terrible, clickbait headline. In short (first sentence), tech start-ups are setting up shop in non-SV locations where they can find cheaper rent and more affordable talent. This is a good thing because it means a) physical proximity to funding sources is less important, b) more funding sources are available, c) good talent is everywhere, and d) the trend of tech becoming part of the general economy (dare I say democratized?) continues.

justboxing 8y ago

Ah, If I had a dollar for every time a post like this shows up on HN, I'd be a millionaire. It's either this, or some personal anecdote of how some founder took his startup to Austin, Detroit, Nashville, Seattle .. < insert gentrifying city here > and they are kicking butt. Last I checked, San Francisco alone accounted for 25% of the V.C Money and San Francisco + Silicon Valley accounts for over 45% of V.C. Money. Source: https://www.citylab.com/life/2018/03/the-extreme-geographic-inequality-of-high-tech-venture-capital/552026/ https://www.citylab.com/life/2018/03/the-extreme-geographic-... > The Bay Area—that is, San Francisco and Silicon Valley—currently accounts for nearly 45 percent of total venture capital investment in the entire United States and there is no tug of war. >This kind of story is often framed as a tug of war between Silicon Valley and the rest of the country Write all you want, but if you are looking for funding (which most entrepreneurs are), then San Francisco and Silicon Valley is still the place to be at.

bwb 8y ago
Well said.
bdcravens 8y ago
I don't think it's a matter of "SF dying for startups" as much as it points out that starting there, and then moving elsewhere when you've moved to the next level, is very viable. Basically SF is to startups as Nashville is to country musicians or Los Angeles is to actors.
dmode 8y ago
There was an article voted up in HN on how we are in Peak California and Bay Area. And someone pointed out that this narrative has been going on for decades.
- r00fus 8y ago
  Meme: beleaguered Apple / SV
souprock 8y ago
The landlords without rent control are enjoying this, as are the homeowners moving out. That 45% feels a lot smaller once you realize that your money doesn't go very far. It's also not all your 45%. You have more competitors for that investment, so you can expect a smaller slice of the pie or a reduced chance at getting some pie.

KorematsuFred 8y ago

The only reason I am still in SV is because I am stuck on H1B. I think having a better immigration system is a Red president's best bet to finally spite the largest Blue state. You need to bring in talented engineers from world over and let them flood boise, Reno, Austin, Sarasota and Denver. See the Silicon Valley crumble.

wavefunction 8y ago
That would be a terrible way to run a national economy. But perhaps I shouldn't use the speculative tense...
dmode 8y ago
H1B is not location specific. You are free to work from anywhere in the US you find employment
- KorematsuFred 8y ago
  It is job specific which means I can not go to Texas and take up ranching or just freelance from Reno.

opportune 8y ago

I'm heavily considering Tallinn for a tech startup - It's easy to get residence status (IIRC basically requires a ~$60k investment in a business you are starting) and extremely easy to start a business. You get access to the EU labor/trade markets in a low COL city which already has a decent sized tech and entrepreneurship presence. The government is actively courting you and in general seems very easy to interact with and move forward with - reducing the PM/lawyer overhead of operating a medium sized business in other countries. And if you stay there long enough it's not overly complicated to get EU permanent resident status. Overall, Tallinn beats SV in almost every way except for two - developer talent/concentration (though it's still pretty good) and local capital.

dkfmn 8y ago
I'd suggest asking what is uniquely beneficial about Tallinn that will make your business more likely to succeed. Lots of places are cheap and the two exceptions you identify, talent and capital, are absolutely critical to the success of high-growth tech companies.
- opportune 8y ago
  Very good point. I am actually visiting Tallinn later this year to try to meet with people in the entrepeneurship scene and learn more about the city. While you're right that talent and capital are important, it's also true that no place on the planet has more capital and software talent than SV. So you're never going to beat SV measuring only those metrics. The challenge of an entrepeneur who wants to found a startup outside of the Bay area is to pick a location that is beneficial in other ways while not sacrificing too much in terms of capital and talent. I'm not too sure about the local capital in Tallinn (not that you necessarily need to raise money locally) but I do know it has a pretty strong developer community by european standards, maybe in the top 5 in europe. And it also excels in terms of government support for entrepreneurship and, afaik, local cybersecurity talent. So it's not just a cheap place, it's a cheap place that also has basically every other thing that makes founding a software business attractive with the possible exception of capital.

justfor1comment 8y ago

As an engineer in the Bay Area I would recommend most startups to locate themselves outside the bay. Especially if they operate a low margins business. Rent is expensive and so are the employee salaries over here. I have many Bay Area startup recruiters reach out to me with rather interesting projects. However, a quick look at Glassdoor reveals that the liquid portion of the salaries they offer is so low that I would need to live in a trailer to work there.

i_phish_cats 8y ago
If only there were trailer parks or other cheaper housing options around here. Fuck NIMBY's.
- stcredzero 8y ago
  If only there were trailer parks or other cheaper housing options around here. There's one in Milpitas.
  - chipotle_coyote 8y ago
    There are several large ones in Sunnyvale and San Jose, too. But even mobile homes are expensive in Silicon Valley by the standards of most other places; at this point, $150K would be a steal, and prices approaching $300K aren't uncommon -- and monthly land rental fees in the park can easily be more than the mortgage. (For instance, a listing I just pulled up on Zillow is a reasonable-ish $155K for a 3br/2ba manufactured home in Sunnyvale, for an estimated mortgage of just over $600 a month...and a rental fee of another $1600 a month.)
- masonic 8y ago
  It's the YIMBY developers that are destroying mobile home parks here, including the two closest to me right now (on El Camino near Poplar, and the former Blue Bonnet complex at Fair Oaks and Evelyn).

jedberg 8y ago

The solution to this is remote work. The main benefits of being in the valley are access to investors/capital. This advantage mostly only applies to executives. So have your executives in SV and have everyone else be wherever they want to be that is cheaper and nicer for them.

johannes1234321 8y ago
Depending on the amount of communication needed for being efficient. I work 10+ years in a Rendite First organisation and there are regular times where I think "damn, discussing this over the water cooler, while running into each other, would be more efficient" than a chat exchange or setting up a video/phone conf. Of course on the plus side I have the uninterrupted working hours, where nobody walks in to me and flexible hours to arrange my life and the tendency to not fully separate private and work which easily leads to free overtime ;)
- jedberg 8y ago
  I actually saw an interesting solution to this. I don't remember what company it was, but they had a designated "water cooler time" where they had a video chat up every day that anyone could pop into and talk about whatever they want, business or not. It gave people a chance to have those serendipitous conversations and built team morale.
  - johannes1234321 8y ago
    What I do in my team is dedicate time in regular meetings for "fun talk" which is non work related, but still different from a true informal thing. What friends of mine are doing is "nearmote" everybody still in a one or two our distance, so you can meet up on relatively short notice and can schedule regular team meetings, but also have benefits of remote.
  - state_less 8y ago
    I'll second this. Turning the camera on 15min in the morning to chat about anything: pressing issues, vacation or home life makes for good digital water cooler time.

ssimoni 8y ago

You should be close to your customers. My cofounders and I coded most of the MVP in the bay because we all happened to be living there, but then we started going to tradeshows and saw that most of our customers were in NYC so we moved east. If you are doing a startup where you are a B2B tech company that sells to other tech companies, the bay area is great.

babyslothzoo 8y ago

TLDR: cost of living But leaving for another west coast city is not going to improve things much, housing and cost of living in Los Angeles, Seattle, Portland, etc are also very high when compared to costs elsewhere in the USA. The midwest and south should be aggressively courting entrepreneurs based on cost of living alone.

analog31 8y ago
We are, but nobody has discovered the silver bullet, if there even is one. Every medium sized city dreams of being the Something Valley.
- souprock 8y ago
  Eh, go for it? My place began with a few people out of the local university and an angel investor. There was organic growth and an actual profit. The exit was a company of about 40 people being sold ($36.4 million in 2019 dollars) to a large defense contractor. That's in Melbourne, Florida. There are several start-ups in the area created by former employees, generally beginning on personal funds. This also works in Longmont, Colorado. I have a relative who did a couple businesses starting from personal funds. One sold for millions of dollars, and the other is ongoing with decent success.
  - analog31 8y ago
    Indeed, there are scattered start-ups everywhere. The university in my town is a major center for biology research, and has resulted in formation of a number of businesses, some of which have grown to respectable size. We have Epic. I have my own side-business, but not even scalable to a level of interest for a VC. But still nothing at a level to suggest the tide turning away from the big coastal cities.

dmode 8y ago

Narrative: Startups are moving out of Bay Area Reality: 2018 VC funding: Bay Area = $45bn, Austin = $1.5bn

sonnyblarney 8y ago

For 'big bet' things it might make a lot of sense. I can see why Uber, AirBnB, and especially OpenAI are going to be there. But for other, slightly niche businesses, wherein you're competing in a vertical/horizontal that may not be specifically tech, it might make sense to be elsewhere. Fashion heavy, Mining & Materials, Manufacturing, Fintech, Agriculture etc. I suggest it might be ok to be somewhere else. As a very crude rule of thumb, if you need 'good engineers' but not 'world class engineers' i.e. the problem space is more or less 'domain' and not 'tech' ... well you can get good engineers in a lot of places, and domain knowledge is not inherently in the Valley.

beager 8y ago

The notion that the Bay Area contains all the wisdom about high-growth, VC-backed success, if true, seems to me like a great opportunity for those who have been successful at it in the Bay Area to consult for those who want to replicate it for the rest of the country. It may well be more lucrative for those people to stay put and startup again, but there’s certainly a tier of people who are craving adventure and would much more enjoy sharing their blueprint for success with Austin, Boulder, Atlanta, SLC, Portland, on and on. If I were a big VC firm (and sure, this might be a good reason why I’m not), I’d be forward-deploying my analysts and recruiting a class of EIRs from the flyover states. It’s a new flavor of alpha for VC: sourcing dealflow from the entire US.

thrax 8y ago

Please God yes.

crissyw 8y ago

For anyone else looking to move away from the Bay Area, I'm hiring in Jakarta, Indonesia :) Email me at crystal@go-jek.com https://docs.google.com/document/d/1aWeK0dReWeufZUN11f2QMoEP3Of5aok7295msDJGxOs/edit https://docs.google.com/document/d/1aWeK0dReWeufZUN11f2QMoEP...