6 ms·

Can You Really Build A Great Tech Firm Outside Silicon Valley?

43 points by bjonathan 16y ago

jdp23 16y ago
A lot of great companies have come from outside the Valley and Mark does a good job of outlining all the advantages ...
binarycheese 16y ago
Yes. But you might not get the Silicon Valley buzz like some "answers" websites are getting.
- deleted 16y ago
  [deleted]
notahacker 16y ago
Am I the only person that's alarmed that some VCs whose supposed expertise in the world of tech startups qualifies them to invest millions of dollars may be incapable of acknowledging the success or potential for success of anything beyond a 30 mile radius of Sand Hill Road
- mgkimsal 16y ago
  No, you're not.
  - eaxitect 16y ago
    I feel the same, I think most of VC's badly bias themselves
- mixmax 16y ago
  An entrepreneurial VC would see this as an opportunity - there's probably a great untapped market for VC's willing to move a few hundred miles east.
deleted 16y ago
[deleted]
dr_ 16y ago
Not sure if I agree with this article. None of the LA companies he mentions have been home runs or anything even close. And NYC is a different story altogether - there's one VC (USV) basically trying to run the entire show, with a supporting cast here and there and even their biggest "success" to date (Twitter) is really based in Northern California. Other companies like 4square are proving to be succesful, but even they finally had to open operations in the SF/Valley area because they couldn't get enough talent in NYC, and ones like drop.io flopped cause they just couldn't get traction despite having a talented team. I think when it comes to developing pure tech companies - like hardware (although that's moving to Asia, except for "Design") and hardcore software, the Valley will always be the place for those companies. Places like LA/NYC, etc. will use this technology to enhance whatever industries are a dominant part of their respective economies. I say this living in the NYC metropolitan area. Personally I would love to see the Wall Streeters vanish and be replaced by tech companies doing cool, interesting stuff. But I know it won't happen.
- muhfuhkuh 16y ago
  "Personally I would love to see the Wall Streeters vanish and be replaced by tech companies doing cool, interesting stuff. But I know it won't happen." That could be the problem with NYC startup scene. You simply _cannot_ get the absolute best and brightest "rock star" developers because they sucked into blackrock, D.E. Shaw, or some such doing rack room quant algorithms. You can't compete with what may as well be a blank check and insane bonuses. You _might_ get lucky and snag the starry eyed idealist fresh out of college, but then again, the "rock stars" in that crop might go start their own thing, or, worse, hear the siren song of Sand Hill Rd. (or Stanford Grad program, which is eventually the same thing).
- staunch 16y ago
  You'll have to define what you mean by "home run" if $500M+ exits don't count.
- gyardley 16y ago
  Union Square Ventures is only a small part of the NYC funding landscape. First Round, Betaworks, RRE, DFJ Gotham, IA Ventures, Starvest, SAVP, Softbank, Rho, Greycroft, and that's just off the top of my head (I know I'm missing some), in addition to firms like Spark / True / Kodiak / CRV that often come here to invest and Sand Hill Road firms that are newly opening offices here like Canaan and Accel. Don't get me wrong, USV is a great firm to work with, but you can comfortably do a round in NYC without ever having to talk to them. Don't let the fact that Fred has a popular blog blind you to the rest of the ecosystem. I also think you're underestimating how much interesting technology there is in NYC. Yes, a lot of it is related to advertising or the financial sector. But the type of scale many of these companies are working with requires 'hardcore software' by anyone's definition. I do agree that recruiting is hard here, but recruiting is hard everywhere.
jiffylu 16y ago
Mark is right to point out that each geographic region has its advantages. Places like Boston may not be known for home runs in the consumer space but because of MIT, it's been known to produce some heavy tech winners (A123 systems, ITA, kiva) There's also a reason why Google has offices in Seattle, Boston, NYC, and soon, Pittsburgh. Hiring is tough in the valley and there's an abundance of talent elsewhere. If you want to innovate on web technology, the valley is the place to be. If you want to innovate on business models, content, or heavy technology (to name a few) there are other places where you can thrive.
- sroussey 16y ago
  And Google just leased an office to hold over 1000 people in L.A.
- cyrus_ 16y ago
  Google has had a small office in Pittsburgh for a few years. They moved into a much bigger space recently and are hiring pretty ferociously out of CMU.
  - jiffylu 16y ago
    Yeah I heard they were heavily targeting CMU. Here are some pictures of the new offices. http://www.businessinsider.com/google-pittsburgh-office-2011-2# http://www.businessinsider.com/google-pittsburgh-office-2011...
jonny_eh 16y ago
This may be naive, but other than the local talent pool, why does it matter where you're located? It's relatively cheap to fly around the continent. On top of that, communication has never been so cheap and easy. When I visit a website, as a user or customer, I could care less where that site was designed or is hosted.
- sfphotoarts 16y ago
  It does matter, culture, infrastructure, proximity to events/meetups etc. Walk to see customers, competitors, etc. Can't go to a bar without ending up debating which key value store to use for high throughput write operations, or which python library is better for imap attachment handling, or which ruby gem works the best for hooking up facet search to your app. Add to that, its also just really beautiful here and we don't spend half the year buried under snow or sweltering in heat. And of course SF women are the best in the country :)
  - yakto 16y ago
    > SF women are the best in the country Yeah, all 218 of them.
a5seo 16y ago
The headline makes me think Arrington's first earnout calculation from AOL is close at hand and he needs a few extra pageviews to make it.
- sroussey 16y ago
  I don't think so, this was a subject at last weeks Twiistup8.
sroussey 16y ago
Well, the part that says "young engineers who want to make $200,000 or more" in the Valley, will only make engineers want to move to the valley... Who has the name of a recruiter? Maybe it is time for me to move out of LA and to the Valley!
- sroussey 16y ago
  So, you know, those comments don't help his cause...
  - Dylanlacey 16y ago
    Comments are meant to enrich a discussion and provide alternative views and corroboration, not support the article under discussion's POV slavishly.
patrickgzill 16y ago
I remember dealing with this in 1998 or so, at a company located just outside Philadelphia. The new sales director, and the marketing director, were from SV and made it clear they were in a backwater - they may as well have told us that traveling through hyperspace wasn't like dusting crops.
JCB_K 16y ago
If you've got a good idea, and you're passionate for it, you don't need Silcion Valley.
wslh 16y ago
There is a high potential for the first VCs/Angels who search opportunities outside SV and USA, main cities of Europe, Israel, etc. I find it the most obvious http://en.wikipedia.org/wiki/Arbitrage http://en.wikipedia.org/wiki/Arbitrage situation.
vannevar 16y ago
Do people still start real technology companies in Silicon Valley? It seems like everything coming out of there these days is some variety of web mashup. The semiconductor launched the original Valley ecosystem, the Internet launched the current one. Where is the technological foundation for the next wave?
- knieveltech 16y ago
  http://www.reprap.org/wiki/Main_Page http://www.reprap.org/wiki/Main_Page
Skillset 16y ago
Interesting, something of a successor to the classic Paul Graham essay, "How to Be Silicon Valley" (May 2006): http://www.paulgraham.com/siliconvalley.html http://www.paulgraham.com/siliconvalley.html
wglb 16y ago
It seems that TFA is answering a slighty different question: "Can you find a great VC investment company outside of SHR". The difference is important, as there are certainly a few Tech Firms in, oh, Chicago, and Japan, New York who are bootstrapped. That is, their goal is more "how do I get my first paying customer" than "i need millions of eyeballs".

43 points by bjonathan 16y ago

jdp23 16y ago

A lot of great companies have come from outside the Valley and Mark does a good job of outlining all the advantages ...

binarycheese 16y ago

Yes. But you might not get the Silicon Valley buzz like some "answers" websites are getting.

deleted 16y ago
[deleted]

notahacker 16y ago

Am I the only person that's alarmed that some VCs whose supposed expertise in the world of tech startups qualifies them to invest millions of dollars may be incapable of acknowledging the success or potential for success of anything beyond a 30 mile radius of Sand Hill Road

mgkimsal 16y ago
No, you're not.
- eaxitect 16y ago
  I feel the same, I think most of VC's badly bias themselves
mixmax 16y ago
An entrepreneurial VC would see this as an opportunity - there's probably a great untapped market for VC's willing to move a few hundred miles east.

deleted 16y ago

[deleted]

dr_ 16y ago

Not sure if I agree with this article. None of the LA companies he mentions have been home runs or anything even close. And NYC is a different story altogether - there's one VC (USV) basically trying to run the entire show, with a supporting cast here and there and even their biggest "success" to date (Twitter) is really based in Northern California. Other companies like 4square are proving to be succesful, but even they finally had to open operations in the SF/Valley area because they couldn't get enough talent in NYC, and ones like drop.io flopped cause they just couldn't get traction despite having a talented team. I think when it comes to developing pure tech companies - like hardware (although that's moving to Asia, except for "Design") and hardcore software, the Valley will always be the place for those companies. Places like LA/NYC, etc. will use this technology to enhance whatever industries are a dominant part of their respective economies. I say this living in the NYC metropolitan area. Personally I would love to see the Wall Streeters vanish and be replaced by tech companies doing cool, interesting stuff. But I know it won't happen.

muhfuhkuh 16y ago
"Personally I would love to see the Wall Streeters vanish and be replaced by tech companies doing cool, interesting stuff. But I know it won't happen." That could be the problem with NYC startup scene. You simply _cannot_ get the absolute best and brightest "rock star" developers because they sucked into blackrock, D.E. Shaw, or some such doing rack room quant algorithms. You can't compete with what may as well be a blank check and insane bonuses. You _might_ get lucky and snag the starry eyed idealist fresh out of college, but then again, the "rock stars" in that crop might go start their own thing, or, worse, hear the siren song of Sand Hill Rd. (or Stanford Grad program, which is eventually the same thing).
staunch 16y ago
You'll have to define what you mean by "home run" if $500M+ exits don't count.
gyardley 16y ago
Union Square Ventures is only a small part of the NYC funding landscape. First Round, Betaworks, RRE, DFJ Gotham, IA Ventures, Starvest, SAVP, Softbank, Rho, Greycroft, and that's just off the top of my head (I know I'm missing some), in addition to firms like Spark / True / Kodiak / CRV that often come here to invest and Sand Hill Road firms that are newly opening offices here like Canaan and Accel. Don't get me wrong, USV is a great firm to work with, but you can comfortably do a round in NYC without ever having to talk to them. Don't let the fact that Fred has a popular blog blind you to the rest of the ecosystem. I also think you're underestimating how much interesting technology there is in NYC. Yes, a lot of it is related to advertising or the financial sector. But the type of scale many of these companies are working with requires 'hardcore software' by anyone's definition. I do agree that recruiting is hard here, but recruiting is hard everywhere.

jiffylu 16y ago

Mark is right to point out that each geographic region has its advantages. Places like Boston may not be known for home runs in the consumer space but because of MIT, it's been known to produce some heavy tech winners (A123 systems, ITA, kiva) There's also a reason why Google has offices in Seattle, Boston, NYC, and soon, Pittsburgh. Hiring is tough in the valley and there's an abundance of talent elsewhere. If you want to innovate on web technology, the valley is the place to be. If you want to innovate on business models, content, or heavy technology (to name a few) there are other places where you can thrive.

sroussey 16y ago
And Google just leased an office to hold over 1000 people in L.A.
cyrus_ 16y ago
Google has had a small office in Pittsburgh for a few years. They moved into a much bigger space recently and are hiring pretty ferociously out of CMU.
- jiffylu 16y ago
  Yeah I heard they were heavily targeting CMU. Here are some pictures of the new offices. http://www.businessinsider.com/google-pittsburgh-office-2011-2# http://www.businessinsider.com/google-pittsburgh-office-2011...

jonny_eh 16y ago

This may be naive, but other than the local talent pool, why does it matter where you're located? It's relatively cheap to fly around the continent. On top of that, communication has never been so cheap and easy. When I visit a website, as a user or customer, I could care less where that site was designed or is hosted.

sfphotoarts 16y ago
It does matter, culture, infrastructure, proximity to events/meetups etc. Walk to see customers, competitors, etc. Can't go to a bar without ending up debating which key value store to use for high throughput write operations, or which python library is better for imap attachment handling, or which ruby gem works the best for hooking up facet search to your app. Add to that, its also just really beautiful here and we don't spend half the year buried under snow or sweltering in heat. And of course SF women are the best in the country :)
- yakto 16y ago
  > SF women are the best in the country Yeah, all 218 of them.

a5seo 16y ago

The headline makes me think Arrington's first earnout calculation from AOL is close at hand and he needs a few extra pageviews to make it.

sroussey 16y ago
I don't think so, this was a subject at last weeks Twiistup8.

sroussey 16y ago

Well, the part that says "young engineers who want to make $200,000 or more" in the Valley, will only make engineers want to move to the valley... Who has the name of a recruiter? Maybe it is time for me to move out of LA and to the Valley!

sroussey 16y ago
So, you know, those comments don't help his cause...
- Dylanlacey 16y ago
  Comments are meant to enrich a discussion and provide alternative views and corroboration, not support the article under discussion's POV slavishly.

patrickgzill 16y ago

I remember dealing with this in 1998 or so, at a company located just outside Philadelphia. The new sales director, and the marketing director, were from SV and made it clear they were in a backwater - they may as well have told us that traveling through hyperspace wasn't like dusting crops.

JCB_K 16y ago

If you've got a good idea, and you're passionate for it, you don't need Silcion Valley.

wslh 16y ago

There is a high potential for the first VCs/Angels who search opportunities outside SV and USA, main cities of Europe, Israel, etc. I find it the most obvious http://en.wikipedia.org/wiki/Arbitrage http://en.wikipedia.org/wiki/Arbitrage situation.

vannevar 16y ago

Do people still start real technology companies in Silicon Valley? It seems like everything coming out of there these days is some variety of web mashup. The semiconductor launched the original Valley ecosystem, the Internet launched the current one. Where is the technological foundation for the next wave?

knieveltech 16y ago
http://www.reprap.org/wiki/Main_Page http://www.reprap.org/wiki/Main_Page

Skillset 16y ago

Interesting, something of a successor to the classic Paul Graham essay, "How to Be Silicon Valley" (May 2006): http://www.paulgraham.com/siliconvalley.html http://www.paulgraham.com/siliconvalley.html

wglb 16y ago

It seems that TFA is answering a slighty different question: "Can you find a great VC investment company outside of SHR". The difference is important, as there are certainly a few Tech Firms in, oh, Chicago, and Japan, New York who are bootstrapped. That is, their goal is more "how do I get my first paying customer" than "i need millions of eyeballs".