5 ms·

Why are entrepreneurs leaving the U.S.?

81 points by mchafkin 15y ago

sounds 15y ago
This is just one anecdote. I don't see a broader trend of entrepreneurs fleeing the U.S. It's true, entrepreneurs are outside-the-box thinkers, so they may do unexpected things. Though the U.S. has plenty of troubles, I don't believe it's any better anywhere else. (Except maybe Canada :-) I'm not from there, though, so I wouldn't know.)
- randomdata 15y ago
  > Except maybe Canada Canada is generally regarded as a terrible place for startups, unfortunately. The laws are pretty restrictive towards "disruptive" technologies and the government always bends in favour of the existing players.
  - iqster 15y ago
    That's been my impression too. I'm trying to figure out why that is the case. Is it mainly because of laws that make it hard to fire bad employees? Payments such as unemployment benefits, social benefits, etc.? Tax code issues? Or something else entirely?
    - hello_moto 15y ago
      Lack of exposures mostly. Also Canadians tend to be less ruthless (I'm not going to debate the right or wrong on this but seeing that the biggest and most successful companies are driven by ruthless people...) Canada also has a small (but growing) market. There aren't too many big cities and big spenders. Vancouver, while it's beautiful and nice and all that, the majority businesses tend to revolve around government agencies. Every little bits definitely taxed startups chance to be successful. Compare to Silicon Valley where people would almost definitely give try all-things-mobile or web2.0, Vancouverites prefer to hike, bike, enjoy foods. All in all, Canada is still conservatives when it comes to technology. Having said that, I was surprised to see big names in Computing technology born and bred in Canada but all moved and made it big in US. Kernighan, Gosling, Aho, Rob Pike, Rasmus Lerdorf, Kenneth Iverson, etc. http://en.wikipedia.org/wiki/Category:Canadian_computer_scientists http://en.wikipedia.org/wiki/Category:Canadian_computer_scie... Too bad... Just too bad...
      - trevelyan 15y ago
        "Also Canadians tend to be less ruthless (I'm not going to debate the right or wrong on this but seeing that the biggest and most successful companies are driven by ruthless people...)" I agree Americans are more entrepreneurial, but I don't think it's evident that ruthlessness is a desirable trait in business and think that Canada's sane public policy in taxation and health care makes it better to live and hire in Canada than the United States. The problem as parent-post says is that if you need venture capital you simply won't find it, so businesses have to focus on revenue rather than offering free online services. As far as academia goes, my experience is that when it comes to undergraduate education Canadian universities are better or equal to their American counterparts. But the States have better graduate programs and better endowments at the top-end, so a good student can get a free ride in the States and return to Canada with a prestigious foreign degree that will carry more weight in the job search and that reflects more cutting-edge research. Their counterparts who stay in Canada will conversely have to self-fund graduate work and do more teaching work for lower pay, often getting a separate MA and PhD instead of doing them concurrently as in the best US programs. Prior to 2008, the American economy had always been better than the Canadian economy for about twenty years, so you have twenty years of economic pull as well -- there have traditionally been more and better paying jobs in the States than Canada. That said, there's an old Canadian joke about a preacher from Saskatchewan who was getting up in years and began to pepper his sermons with asides about how he would soon be leaving for that land from which no man ever returns. And how his parishioners immediately understood that he was moving south of the border.
        hello_moto 15y ago
        Oh there's this thing called SRED which can be double edged sword. On one hand, you get back half of your expenses paying salary and all that stuff and on the other hand, it makes your balance sheet looks profitable even though in reality, a few companies are actually on the red. When it comes to paying jobs and cost of living, my idiotic brain usually look at the situation this way (this is by no mean the right way to make a decision but I use it for my own regardless): Let's take one O'reilly book and turn back to check the price. Canadian is always more expensive right? (Due to currency exchange or whatnot). Let's take the same job (Software Developer) salary average given the same experience level: intermediate. One might receive about $80-100k in the US while in Canada, they might receive $65-75k. Plus the jobs aren't that many here. Canada: higher nominal cost of living and lower nominal. income.
  - deleted 15y ago
    [deleted]
  - OmarIsmail 15y ago
    > Canada is generally regarded as a terrible place for startups, unfortunately. The laws are pretty restrictive towards "disruptive" technologies and the government always bends in favour of the existing players. What the heck are you talking about? Can you please provide some sources for this? Other than telecom and media I can't think of any space in the tech industry that the government is "restrictive" towards. In fact the Government has amazing programs for tech startups like SR&ED and IRAP, and you have amazing support systems like MaRS and Communitech in Ontario, with analogs in practically every province. The thing that makes Canada tough for startups is the lack of an established VC ecosystem. This is why you see quite a few bootstrapped Canadian startups, and only a few Canadian startups that go really big. But labour is significantly cheaper than in the US (especially when you factor in free healthcare), labour in Canada often has a more worldwide mix (because of a large immigrant population), you get awesome tax credits and incentives, and quality of life is near the top of the world. I'm not usually so jingoistic, but this one-off comment was really quite strange.
    - randomdata 15y ago
      It's not exactly a one off comment. There was an article posted, I believe here, about the state of startups in Canada. I can't seem to find it at the moment, but I do remember a few examples from it: * iCraveTV, a Canadian online video service, saw the government cave from US pressure to change Canadian laws regarding online video, which ultimately put them out of business. Later, a bunch of US-based startups entered the same space. * OpenText, a Canadian search engine, was unable to index the general web due to the law in Canada. While still successful in the corporate space, they could have been a player against Google and Bing if things had been different. * ZENN, a Canadian automobile manufacturer, is unable to sell their cars in Canada due to legislation. For comparison, Terrafugia, US-based company building a car/airplane hybrid has been able to change several laws in the US to allow them to enter the market. You can attribute the position these companies find themselves in down to management, but the political climate does not help matters. You can still build a decent business in Canada, but building something revolutionary is more easily accomplished by people of other countries.
    - rdouble 15y ago
      Cheap labor isn't necessarily a win. It means the best engineers will use NAFTA to go work in the USA where they will be paid 2-3x as much. The last startup I worked for in the Bay Area had over half its engineering staff from Canada.
geebee 15y ago
Yeah, it's worrisome to see immigrants or (especially) naturalized or native-born citizens with strong ties overseas leave the US to start companies. But not necessarily a bad thing. If they are leaving because the US has become an unfriendly place to new businesses, especially in high tech, that's bad. If they are leaving because opportunities overseas are exceptional, and it's easier to capitalize on those opportunities for people with strong cultural or linguistic ties to a particular region, that's not necessarily bad. Having grown up in SF, I see the tech boom as a mixed bag. It's of course phenomenal to have so much wealth here. But I've also seen a lot of displacement. It's hardly a crisis that we can't cram every single tech startup in to this small peninsula, and I don't think it's a bad thing that people might actually want to live somewhere else either, in the US (Austin, Seattle, Boulder...) or overseas (Seoul, Bangalore, Copenhagen...). That said, I do think these sort of stories do underscore why it's so important for the US to have a steady and reliable stream of STEM graduates come up through our own educational system. It's great to be open to talent from the rest of the world, but becoming excessively reliant on it long-term seems like folly to me.
- mikemarotti 15y ago
  It seems to be a case of the latter. These entrepreneurs identified a gap in a foreign market and exploited it. It's mutually beneficial - benefits them because they are now a leader in their market, and it benefits us as there is now one less social-fucking-coupon website that we have to hear about.
billpatrianakos 15y ago
There may be a few stories like this but this is the exception, not the rule. As much as we have problems here in the states, it's still one of the easiest places to start and run a business (#4 in the world). I didn't quite get why the guy in the story left for Korea though. It was just a story of an entrepreneur who left the states and is now S. Korea's Zuckerberg. So? I mean, it's impressive but so what if he left? Maybe his particular business would fair better there but again this the exception and not the rule. There are other countries like China and India that have exploding GDP but the great thing about the U.S. is that while we are decently regulated those regulations don't do much to Hirt the founding of a business and allow businesses to expand easily. For example, India until recently has been chock full of mom and pop shops but not many larger, expanding businesses. This is because they didn't allow you to open a store in more than 2 location until just recently. That means no corporate franchises and the like. Over here you can pretty much do what you please within reason. Not sure why I got off track with the India anecdote but I just learned about it and thought it was very intriguing.
- CWuestefeld 15y ago
  while we are decently regulated those regulations don't do much to Hirt the founding of a business and allow businesses to expand easily. On the contrary, consider: [beginquote] In the wake of Sarbanes-Oxley legislation ..., "the psychology of the entrepreneur has changed dramatically," say Mark Heesen, president of the National Venture Capital Association. The basic reason is that in a world with Sarbanes-Oxley, everyone who wants to take their company public has to deal with extra paperwork and hoops to jump through. Those costs can add up and sometimes make going public simply not worth it. [1] [endquote] For further details on this, see also [2] [1] http://money.usnews.com/money/blogs/risky-business/2008/07/17/sarbanes-oxley-a-chilling-effect-on-venture-capital http://money.usnews.com/money/blogs/risky-business/2008/07/1... [2] http://www.nysscpa.org/cpajournal/2006/606/infocus/p14.htm http://www.nysscpa.org/cpajournal/2006/606/infocus/p14.htm
  - wtvanhest 15y ago
    If your concern is going public then you have successfully grown a business to a gigantic and reasonably stable level and have beat all the odds. You have therefore picked the correct country. While Sarbanes-Oxely does pose a financial burden on companies which is still too high (typically $1M to $3M/year), it does provide a level of protection for employees of those companies, bond holders and mutual funds which hold most of America's retirement money. Paperwork and hoops for going public are handled by accountants and attorneys. Sarbanes effectively removed corporate governance issues which cause huge problems (like having a captured board or having the audit firm also being paid for consulting etc. The citations you cited are written by The National Venture Capital Association who lobbies against Sarbanes because it affects their returns. In fact, 69% of NCVA dues go to lobbying. "We estimate that 69% of your dues will be used for lobbying and is not deductible because of recent changes in federal tax law." http://www.nvca.org/index.php?option=com_content&view=article&id=85&Itemid=111 http://www.nvca.org/index.php?option=com_content&view=ar... The second article you cite has the following quote: "Despite the many chilling headlines and reported cases where companies have cited SOX as the reason to shelve plans for an IPO, the evidence to date that SOX is sufficient cause for companies to stay private has been largely anecdotal or limited in scale." --- All that said, SOX is too expensive and the D&O insurance should be reduced to increase public company valuations and IPO valuations. It does represent an unintended burden on shareholders, CEOs, Bond Holders etc. but SOX is overall positive in the sense that it minimizes fraud and reduces risk for all stakeholders including non management employees.
8bitpal 15y ago
I'm really interested in what compels entrepreneurs to leave a country or area that was formerly a hub for startups. I posted before in the context of SOPA: http://news.ycombinator.com/item?id=3265961 http://news.ycombinator.com/item?id=3265961 What would it take for you to leave the place you are based now and try your luck somewhere else?
- danneu 15y ago
  Along with the answer to your question that someone may provide you, perhaps also change, adventure, and rocking the boat? Mixing a little bit of life experience in with entrepreneurial endeavors? I'm only 23, but those reasons compel me.
  - 8bitpal 15y ago
    Very true. Would it compel to leave permanently though? I left my country of birth for the reasons you stated but I guess somewhere in the back of my head I see myself returning one day.
    - danneu 15y ago
      I don't think I could leave permanently. And I can't see myself rescinding my American passport. Very circumstantial extremes. Even travel writer Paul Theroux, having spent most of his life abroad, said that nothing will ever replace home and its familiarity.
- polyfractal 15y ago
  I can think of a number of reasons. -If you make hard-goods, being closer to your manufacturing may be helpful -Cheaper staffing/skilled labor in non-US countries -Cheaper cost of living elsewhere -More corporation-friendly tax regulations
  - 8bitpal 15y ago
    Rationally those are compelling reasons for a business to leave. But I think personal reasons play a huge role in this decision. A majority of the people tend to only leave when the situation becomes unbearable (or not even then). What would it take for you to leave your home country/area? I guess it's hard to say until it actually happens. One reason for me to leave would be an oppressive government, I guess.
alecco 15y ago
Anecdotal evidence and a lot of narrative. What a poor article. Reminds me the also poorly researched bashing piece on Argentina a few months ago. They missed the point completely as business is booming here. A recent startup conference registered hundreds of projects. INC is junk reporting. Edit: Same reporter! This is hilarious. http://www.inc.com/magazine/201106/doing-business-in-argentina.html http://www.inc.com/magazine/201106/doing-business-in-argenti...
hello_moto 15y ago
There are gazzilion reasons why people opted to do business back home as opposed to the U.S. and all of them are probably similar decision-making as to choosing your next programming languages: there's no one reason to rule them all. I'm an immigrant. I'm considering heavily to go back home and start a business there (online, offline, doesn't matter). Reasons? cheaper workforce, more power, more connections, cherry picking, bigger pond, more people (consumers), etc. I'll be using North America to include both US and Canada for the rest of my comment. Here are a few more detailed examples (all of them are of course anecdotes to me): Managing westerners that believe that they're entitled for everything such as perks, private offices, their choice of programming languages, their choice of best practices are often a time consuming activity. Back home, I can drive the workforce to do the best practices that I believe without having to have long discussions. Give them laptop, give them work, they're happy. This is because their mindset, perspective, and standard are different than here in North America. They're also cheaper. After working with many programmers throughout my careers, I kind of grow a belief that I can train the less "creative" developers back home to be at the same level at most of the programmers in North America. They might not reach the level of superstar engineers, but they will reach the level of more than good enough at where I will be. Connection is a big thing. It's harder to have a connection in N.A., especially when you're an immigrant (maybe it's just me). Where I come from, hooking up with people who have excess money is very easy. Especially when you graduate from a pretty good N.A. university (doesn't have to be Wharton or Harvard, UC Berkeley, UC Irvine is enough). They look at you as someone who has something "more" (whatever more that is). In Iowa, you're nobody. In the [Capital City of your ancestor's land], you're something. Imagine that. Overall, I find that the majority of large Asian cities are probably more alive than some well-known (but not necessarily large) N.A. cities. Again, all of these are anecdotes.
- moocow01 15y ago
  "Back home, I can drive the workforce to do the best practices that I believe without having to have long discussions" But this where you may be missing out on the value of a worker. In this day in age, someone who just cranks out something to a mold or specification is not as valuable to an organization. I'd much rather pay someone 5 times as much if they can think on their feet and not always have to rely on me to figure out how they should be working. Constantly having to define practices for a team of lemmings is a typically exhausting full time gig when you're the only one to take initiative and guide. The other problem is that we all make bad decisions from time to time and it is important to make sure we have competent people around us to correct our course when that occurs rather than a bunch of yes-men.
PLejeck 15y ago
If SOPA passes, imagine how much worse the situation will get D:
bryanlarsen 15y ago
Sure, there are entrepreneurs leaving. But there are still lots of people moving to the States to become entrepreneurs. YC is one of many factors. What's the ratio of coming to going? I suspect that it's still quite a bit higher than 1.0...
beefman 15y ago
Yet another article written for the pleasure of its author. Just tell us what data you have and how they answer the question in your (leading) headline. Three sentences and a table; done.
- mchafkin 15y ago
  I take exception to this point--You want a table? Make a table--But so you know: There are very few stats on reverse migration because the U.S. government stopped tracking it in 1957. There have been some really great studies academic studies, if you're interested in checking them out. http://www.kauffman.org/research-and-policy/immigration-and-the-american-economy.aspx http://www.kauffman.org/research-and-policy/immigration-and-... But even these studies are pretty small and fairly limited. Definitely more research is needed into this area.
  - beefman 15y ago
    Your comment would have been an excellent alternative to the article; I'm not sure why you're taking exception.
nirvana 15y ago
In several of the comments, people have asked why entrepreneurs might want to leave the USA, given the common perception that the USA is a great place to do a business. I'm making this comment in response to those questions as an example of an entrepreneur whose left the USA. My reasons for doing this are obviously going to be different than those who would choose not to, so don't get mad. I'm not trying to persuade you, just explaining. I was born in the USA, and worked for startups for nearly 2 decades in the USA, but when it came time to do my own startup, I left the USA. There are many reasons for this, and further, when I come back to the USA, I'm reminded of some of the nice things we've given up. The biggest reason we left is that the cost of living is high in the west coast of the USA, compared to most of the rest of the world. If we could travel around the world and actually save money while getting to do something we've always enjoyed doing, then that's great. Going to europe is more expensive than the USA, but not that much, well worth it. In fact, berlin was such cool city, that if germans were more supportive of the idea that we might want to stay there for an extended period we'd be working on residency permits. But behind this reason is another one- The USA is going in the wrong direction. Pick whatever examples work best for you- SOPA, domain seizures, an increasingly baroque tax code, increasing regulations all over that, even though they don't yet effect small businesses much, would be a burden if we are at all successful, even dealing with the TSA when I want to fly, and the thought that my tax money is being used to kill afghani, iraqi, pakistani and other children. When I was young, I was brought up to believe that the USA was great because it believed in human rights. That the bill of rights protected us from an out of control government. Over the years, I've seen those rights be violated, one by one, and the supreme court claim that it was "legal" in their rulings. I've come to believe that there is no effective restraint on the US government by the legal system, and I've been shocked to see, how rapidly these transgressions are accelerating. For instance, I still can't wrap my mind around the fact that at ever airport adults and children have a choice between being photographed nude by government agents and being molested by same. This is a violation of state laws in probably all 50 states, yet no charges have been filed. Worse, while many americans protest, there has been no action. I take this as evidence that americans will put up with any rights violations. Many of them will get mad, but they have no method to resolve the situation. While Obama was president when these scanners were put in, only a couple of the people wanting to run against him want them out. And while Bush was president when the TSA was created and the PATRIOT act was passed, Obama has expanded both. Despite the majority of people opposing various bits of legislation (like the bank bailouts) they still get passed. So, I see no way for things to turn around until things get bad enough to make people really unformfortable. Also, I've studied economics and been watching the economic situation. I've come to understand the real nature of the federal reserve and the fiat currency of the USA. The USA benefited greatly from Bretton Woods alls these decades, but a side effect of that is that the inflation that has existed in the dollar supply has been exported to other countries, giving americans an artificially better standard of living. This in itself is not bad, but it and our debtor economy are dependent on that money being kept out of the system by being locked up in vaults and pocketbooks and accounts of foreigners who want it because they think the dollar is a strong currency. Given the fact that our economy is faltering, but more importantly our government is spending like crazy (obama is worse than bush who was worse than clinton who was worse than bush who was worse than the very bad reagan who was worse than carter, it just goes on...) eventually they are going to be inflating so fast that the dollar loses its reserve status, and at that point, it won't matter that the US government is inflating because people will start dumping their dollars. We'll start seeing the effect of all those previous years inflation that was exported realized in the dollars in a rather short time. This is not a black swan event, it happens regularly, just not often enough that people remember its possible. But because of bretton woods, it will be much worse for the usa than, say, argentina. Its pretty much impossible to do business in the USA and not be tied up in the dollar economy. Meanwhile, because I have been a traveller, I've been to other countries and seen how in some ways at least many of them are better than the USA. Chile for instance, has a culture that is more instinctively capitalist. New Zealand, while its more socialist on the surface has a much less corrupt government. So the question becomes, of all these countries, which provides the best protections of the rights I care most about and is also going in the right direction? I've not yet decided, I'm still traveling. There's a lot to commend the USA. One surprising thing is how convenient having amazon and walmart is. Especially compared to europe. You can just order anything you want from amazon or go to a walmart and buy most anything you want. In europe, the retail stores are generally very tiny, and with the exception of an astounding chain of 3 story electronics shops we found in berlin, its often very hard to find obscure things. And when you do, of course, the prices are often almost doublet the USA due to tariffs and on top of that you've got %20 VAT. One downside of running a startup this way is that traveling involves spending a fair bit of time on the traveling part. This gets in the way of the startup part, and it is also a bit disruptive. Each time we go to the next country we have a bit of time figuring out where the grocery store is, arranging the apartment to suit our needs, etc. We're staying in AirBnB places almost exclusively and AirBnB has totally solved a lot of the hassles of having to find apartments. But we're going to try staying linger- getting permits to stay a year or so in each country. Finally, its a hell of a lot of fun to run a startup this way. So, I'm sure most on hacker news disagree with at least something I've said, and this post is by its nature political because it is a questions whose answers, for me, are politically motivated. I'm not looking for a debate. If you disagree with my perspective on any of these things, that's fine, but I took a long time to reach them, and a lot of consideration, and there's really not much point in trying to persuade me (nor am I trying to pursuade you. I'm just answering the question.) I am up for answering followup questions if anyone's concerned about mechanics etc.
tomkarlo 15y ago
Amazingly, if you have thousands of entrepreneurs, some of them will go to other countries. I'm sure there's also some examples of South Korean entrepreneurs coming to the US and starting businesses here. I've worked with some guys who came from Taiwan and started multi-billion-dollar US ecommerce businesses. Are either of those necessarily trends? Not unless you can come up with some numbers to support the anecdotes, which this story doesn't seem to have. We don't know if entrepreneurs are leaving at a greater rate than before, or even if there's a net loss (lots of people come to the US and end up starting small businesses.) If it's in the story, I missed it.
protez 15y ago
It’s true that South Korean start-up scene is getting better from the interest of institutional funds, which got up from the apparent success of the Grouponzi-style businesses, esp. TicketMonster. But it’s a whole lot different story that the Americans return here because Seoul is a better place for start-ups. The M&A market for Internet start-ups in Seoul is almost non-existent, except few cases like TM, and TNC, the only acquisition Google made in South Korea. I don’t understand how this ecosystem would persist without deals any longer. As a side note, the Shin in the article is a family member of the “big brother” Chaebol, Samsung Group, which has close knots with big conglomerates such as CJ Group, Joongang Ilbo, Shinsegae, and more, almost to the extent of their aggregate revenue reaching almost a half of South Korea GDP, so he earned attractive deals from big local brands so easily. Shin wan’t irrational enough not to exploit his family connections to build a business based on a totally unprofitable model, a feat only possible at the right moment and right place. Definitely, he’s a smart guy, smart enough being ready to return if he no longer sees his advantages here in Seoul, which I think would be quite unlikely though, due to his superb “Zuck status” in S. Korea.

81 points by mchafkin 15y ago

This is just one anecdote. I don't see a broader trend of entrepreneurs fleeing the U.S. It's true, entrepreneurs are outside-the-box thinkers, so they may do unexpected things. Though the U.S. has plenty of troubles, I don't believe it's any better anywhere else. (Except maybe Canada :-) I'm not from there, though, so I wouldn't know.)

randomdata 15y ago
> Except maybe Canada Canada is generally regarded as a terrible place for startups, unfortunately. The laws are pretty restrictive towards "disruptive" technologies and the government always bends in favour of the existing players.
- iqster 15y ago
  That's been my impression too. I'm trying to figure out why that is the case. Is it mainly because of laws that make it hard to fire bad employees? Payments such as unemployment benefits, social benefits, etc.? Tax code issues? Or something else entirely?
  - hello_moto 15y ago
    Lack of exposures mostly. Also Canadians tend to be less ruthless (I'm not going to debate the right or wrong on this but seeing that the biggest and most successful companies are driven by ruthless people...) Canada also has a small (but growing) market. There aren't too many big cities and big spenders. Vancouver, while it's beautiful and nice and all that, the majority businesses tend to revolve around government agencies. Every little bits definitely taxed startups chance to be successful. Compare to Silicon Valley where people would almost definitely give try all-things-mobile or web2.0, Vancouverites prefer to hike, bike, enjoy foods. All in all, Canada is still conservatives when it comes to technology. Having said that, I was surprised to see big names in Computing technology born and bred in Canada but all moved and made it big in US. Kernighan, Gosling, Aho, Rob Pike, Rasmus Lerdorf, Kenneth Iverson, etc. http://en.wikipedia.org/wiki/Category:Canadian_computer_scientists http://en.wikipedia.org/wiki/Category:Canadian_computer_scie... Too bad... Just too bad...
    - trevelyan 15y ago
      "Also Canadians tend to be less ruthless (I'm not going to debate the right or wrong on this but seeing that the biggest and most successful companies are driven by ruthless people...)" I agree Americans are more entrepreneurial, but I don't think it's evident that ruthlessness is a desirable trait in business and think that Canada's sane public policy in taxation and health care makes it better to live and hire in Canada than the United States. The problem as parent-post says is that if you need venture capital you simply won't find it, so businesses have to focus on revenue rather than offering free online services. As far as academia goes, my experience is that when it comes to undergraduate education Canadian universities are better or equal to their American counterparts. But the States have better graduate programs and better endowments at the top-end, so a good student can get a free ride in the States and return to Canada with a prestigious foreign degree that will carry more weight in the job search and that reflects more cutting-edge research. Their counterparts who stay in Canada will conversely have to self-fund graduate work and do more teaching work for lower pay, often getting a separate MA and PhD instead of doing them concurrently as in the best US programs. Prior to 2008, the American economy had always been better than the Canadian economy for about twenty years, so you have twenty years of economic pull as well -- there have traditionally been more and better paying jobs in the States than Canada. That said, there's an old Canadian joke about a preacher from Saskatchewan who was getting up in years and began to pepper his sermons with asides about how he would soon be leaving for that land from which no man ever returns. And how his parishioners immediately understood that he was moving south of the border.
      - hello_moto 15y ago
        Oh there's this thing called SRED which can be double edged sword. On one hand, you get back half of your expenses paying salary and all that stuff and on the other hand, it makes your balance sheet looks profitable even though in reality, a few companies are actually on the red. When it comes to paying jobs and cost of living, my idiotic brain usually look at the situation this way (this is by no mean the right way to make a decision but I use it for my own regardless): Let's take one O'reilly book and turn back to check the price. Canadian is always more expensive right? (Due to currency exchange or whatnot). Let's take the same job (Software Developer) salary average given the same experience level: intermediate. One might receive about $80-100k in the US while in Canada, they might receive $65-75k. Plus the jobs aren't that many here. Canada: higher nominal cost of living and lower nominal. income.
- deleted 15y ago
  [deleted]
- OmarIsmail 15y ago
  > Canada is generally regarded as a terrible place for startups, unfortunately. The laws are pretty restrictive towards "disruptive" technologies and the government always bends in favour of the existing players. What the heck are you talking about? Can you please provide some sources for this? Other than telecom and media I can't think of any space in the tech industry that the government is "restrictive" towards. In fact the Government has amazing programs for tech startups like SR&ED and IRAP, and you have amazing support systems like MaRS and Communitech in Ontario, with analogs in practically every province. The thing that makes Canada tough for startups is the lack of an established VC ecosystem. This is why you see quite a few bootstrapped Canadian startups, and only a few Canadian startups that go really big. But labour is significantly cheaper than in the US (especially when you factor in free healthcare), labour in Canada often has a more worldwide mix (because of a large immigrant population), you get awesome tax credits and incentives, and quality of life is near the top of the world. I'm not usually so jingoistic, but this one-off comment was really quite strange.
  - randomdata 15y ago
    It's not exactly a one off comment. There was an article posted, I believe here, about the state of startups in Canada. I can't seem to find it at the moment, but I do remember a few examples from it: * iCraveTV, a Canadian online video service, saw the government cave from US pressure to change Canadian laws regarding online video, which ultimately put them out of business. Later, a bunch of US-based startups entered the same space. * OpenText, a Canadian search engine, was unable to index the general web due to the law in Canada. While still successful in the corporate space, they could have been a player against Google and Bing if things had been different. * ZENN, a Canadian automobile manufacturer, is unable to sell their cars in Canada due to legislation. For comparison, Terrafugia, US-based company building a car/airplane hybrid has been able to change several laws in the US to allow them to enter the market. You can attribute the position these companies find themselves in down to management, but the political climate does not help matters. You can still build a decent business in Canada, but building something revolutionary is more easily accomplished by people of other countries.
  - rdouble 15y ago
    Cheap labor isn't necessarily a win. It means the best engineers will use NAFTA to go work in the USA where they will be paid 2-3x as much. The last startup I worked for in the Bay Area had over half its engineering staff from Canada.

geebee 15y ago

Yeah, it's worrisome to see immigrants or (especially) naturalized or native-born citizens with strong ties overseas leave the US to start companies. But not necessarily a bad thing. If they are leaving because the US has become an unfriendly place to new businesses, especially in high tech, that's bad. If they are leaving because opportunities overseas are exceptional, and it's easier to capitalize on those opportunities for people with strong cultural or linguistic ties to a particular region, that's not necessarily bad. Having grown up in SF, I see the tech boom as a mixed bag. It's of course phenomenal to have so much wealth here. But I've also seen a lot of displacement. It's hardly a crisis that we can't cram every single tech startup in to this small peninsula, and I don't think it's a bad thing that people might actually want to live somewhere else either, in the US (Austin, Seattle, Boulder...) or overseas (Seoul, Bangalore, Copenhagen...). That said, I do think these sort of stories do underscore why it's so important for the US to have a steady and reliable stream of STEM graduates come up through our own educational system. It's great to be open to talent from the rest of the world, but becoming excessively reliant on it long-term seems like folly to me.

mikemarotti 15y ago
It seems to be a case of the latter. These entrepreneurs identified a gap in a foreign market and exploited it. It's mutually beneficial - benefits them because they are now a leader in their market, and it benefits us as there is now one less social-fucking-coupon website that we have to hear about.

billpatrianakos 15y ago

There may be a few stories like this but this is the exception, not the rule. As much as we have problems here in the states, it's still one of the easiest places to start and run a business (#4 in the world). I didn't quite get why the guy in the story left for Korea though. It was just a story of an entrepreneur who left the states and is now S. Korea's Zuckerberg. So? I mean, it's impressive but so what if he left? Maybe his particular business would fair better there but again this the exception and not the rule. There are other countries like China and India that have exploding GDP but the great thing about the U.S. is that while we are decently regulated those regulations don't do much to Hirt the founding of a business and allow businesses to expand easily. For example, India until recently has been chock full of mom and pop shops but not many larger, expanding businesses. This is because they didn't allow you to open a store in more than 2 location until just recently. That means no corporate franchises and the like. Over here you can pretty much do what you please within reason. Not sure why I got off track with the India anecdote but I just learned about it and thought it was very intriguing.

CWuestefeld 15y ago
while we are decently regulated those regulations don't do much to Hirt the founding of a business and allow businesses to expand easily. On the contrary, consider: [beginquote] In the wake of Sarbanes-Oxley legislation ..., "the psychology of the entrepreneur has changed dramatically," say Mark Heesen, president of the National Venture Capital Association. The basic reason is that in a world with Sarbanes-Oxley, everyone who wants to take their company public has to deal with extra paperwork and hoops to jump through. Those costs can add up and sometimes make going public simply not worth it. [1] [endquote] For further details on this, see also [2] [1] http://money.usnews.com/money/blogs/risky-business/2008/07/17/sarbanes-oxley-a-chilling-effect-on-venture-capital http://money.usnews.com/money/blogs/risky-business/2008/07/1... [2] http://www.nysscpa.org/cpajournal/2006/606/infocus/p14.htm http://www.nysscpa.org/cpajournal/2006/606/infocus/p14.htm
- wtvanhest 15y ago
  If your concern is going public then you have successfully grown a business to a gigantic and reasonably stable level and have beat all the odds. You have therefore picked the correct country. While Sarbanes-Oxely does pose a financial burden on companies which is still too high (typically $1M to $3M/year), it does provide a level of protection for employees of those companies, bond holders and mutual funds which hold most of America's retirement money. Paperwork and hoops for going public are handled by accountants and attorneys. Sarbanes effectively removed corporate governance issues which cause huge problems (like having a captured board or having the audit firm also being paid for consulting etc. The citations you cited are written by The National Venture Capital Association who lobbies against Sarbanes because it affects their returns. In fact, 69% of NCVA dues go to lobbying. "We estimate that 69% of your dues will be used for lobbying and is not deductible because of recent changes in federal tax law." http://www.nvca.org/index.php?option=com_content&view=article&id=85&Itemid=111 http://www.nvca.org/index.php?option=com_content&view=ar... The second article you cite has the following quote: "Despite the many chilling headlines and reported cases where companies have cited SOX as the reason to shelve plans for an IPO, the evidence to date that SOX is sufficient cause for companies to stay private has been largely anecdotal or limited in scale." --- All that said, SOX is too expensive and the D&O insurance should be reduced to increase public company valuations and IPO valuations. It does represent an unintended burden on shareholders, CEOs, Bond Holders etc. but SOX is overall positive in the sense that it minimizes fraud and reduces risk for all stakeholders including non management employees.

8bitpal 15y ago

I'm really interested in what compels entrepreneurs to leave a country or area that was formerly a hub for startups. I posted before in the context of SOPA: http://news.ycombinator.com/item?id=3265961 http://news.ycombinator.com/item?id=3265961 What would it take for you to leave the place you are based now and try your luck somewhere else?

danneu 15y ago
Along with the answer to your question that someone may provide you, perhaps also change, adventure, and rocking the boat? Mixing a little bit of life experience in with entrepreneurial endeavors? I'm only 23, but those reasons compel me.
- 8bitpal 15y ago
  Very true. Would it compel to leave permanently though? I left my country of birth for the reasons you stated but I guess somewhere in the back of my head I see myself returning one day.
  - danneu 15y ago
    I don't think I could leave permanently. And I can't see myself rescinding my American passport. Very circumstantial extremes. Even travel writer Paul Theroux, having spent most of his life abroad, said that nothing will ever replace home and its familiarity.
polyfractal 15y ago
I can think of a number of reasons. -If you make hard-goods, being closer to your manufacturing may be helpful -Cheaper staffing/skilled labor in non-US countries -Cheaper cost of living elsewhere -More corporation-friendly tax regulations
- 8bitpal 15y ago
  Rationally those are compelling reasons for a business to leave. But I think personal reasons play a huge role in this decision. A majority of the people tend to only leave when the situation becomes unbearable (or not even then). What would it take for you to leave your home country/area? I guess it's hard to say until it actually happens. One reason for me to leave would be an oppressive government, I guess.

alecco 15y ago

Anecdotal evidence and a lot of narrative. What a poor article. Reminds me the also poorly researched bashing piece on Argentina a few months ago. They missed the point completely as business is booming here. A recent startup conference registered hundreds of projects. INC is junk reporting. Edit: Same reporter! This is hilarious. http://www.inc.com/magazine/201106/doing-business-in-argentina.html http://www.inc.com/magazine/201106/doing-business-in-argenti...

hello_moto 15y ago

There are gazzilion reasons why people opted to do business back home as opposed to the U.S. and all of them are probably similar decision-making as to choosing your next programming languages: there's no one reason to rule them all. I'm an immigrant. I'm considering heavily to go back home and start a business there (online, offline, doesn't matter). Reasons? cheaper workforce, more power, more connections, cherry picking, bigger pond, more people (consumers), etc. I'll be using North America to include both US and Canada for the rest of my comment. Here are a few more detailed examples (all of them are of course anecdotes to me): Managing westerners that believe that they're entitled for everything such as perks, private offices, their choice of programming languages, their choice of best practices are often a time consuming activity. Back home, I can drive the workforce to do the best practices that I believe without having to have long discussions. Give them laptop, give them work, they're happy. This is because their mindset, perspective, and standard are different than here in North America. They're also cheaper. After working with many programmers throughout my careers, I kind of grow a belief that I can train the less "creative" developers back home to be at the same level at most of the programmers in North America. They might not reach the level of superstar engineers, but they will reach the level of more than good enough at where I will be. Connection is a big thing. It's harder to have a connection in N.A., especially when you're an immigrant (maybe it's just me). Where I come from, hooking up with people who have excess money is very easy. Especially when you graduate from a pretty good N.A. university (doesn't have to be Wharton or Harvard, UC Berkeley, UC Irvine is enough). They look at you as someone who has something "more" (whatever more that is). In Iowa, you're nobody. In the [Capital City of your ancestor's land], you're something. Imagine that. Overall, I find that the majority of large Asian cities are probably more alive than some well-known (but not necessarily large) N.A. cities. Again, all of these are anecdotes.

moocow01 15y ago
"Back home, I can drive the workforce to do the best practices that I believe without having to have long discussions" But this where you may be missing out on the value of a worker. In this day in age, someone who just cranks out something to a mold or specification is not as valuable to an organization. I'd much rather pay someone 5 times as much if they can think on their feet and not always have to rely on me to figure out how they should be working. Constantly having to define practices for a team of lemmings is a typically exhausting full time gig when you're the only one to take initiative and guide. The other problem is that we all make bad decisions from time to time and it is important to make sure we have competent people around us to correct our course when that occurs rather than a bunch of yes-men.

PLejeck 15y ago

If SOPA passes, imagine how much worse the situation will get D:

bryanlarsen 15y ago

Sure, there are entrepreneurs leaving. But there are still lots of people moving to the States to become entrepreneurs. YC is one of many factors. What's the ratio of coming to going? I suspect that it's still quite a bit higher than 1.0...

beefman 15y ago

Yet another article written for the pleasure of its author. Just tell us what data you have and how they answer the question in your (leading) headline. Three sentences and a table; done.

mchafkin 15y ago
I take exception to this point--You want a table? Make a table--But so you know: There are very few stats on reverse migration because the U.S. government stopped tracking it in 1957. There have been some really great studies academic studies, if you're interested in checking them out. http://www.kauffman.org/research-and-policy/immigration-and-the-american-economy.aspx http://www.kauffman.org/research-and-policy/immigration-and-... But even these studies are pretty small and fairly limited. Definitely more research is needed into this area.
- beefman 15y ago
  Your comment would have been an excellent alternative to the article; I'm not sure why you're taking exception.

nirvana 15y ago

In several of the comments, people have asked why entrepreneurs might want to leave the USA, given the common perception that the USA is a great place to do a business. I'm making this comment in response to those questions as an example of an entrepreneur whose left the USA. My reasons for doing this are obviously going to be different than those who would choose not to, so don't get mad. I'm not trying to persuade you, just explaining. I was born in the USA, and worked for startups for nearly 2 decades in the USA, but when it came time to do my own startup, I left the USA. There are many reasons for this, and further, when I come back to the USA, I'm reminded of some of the nice things we've given up. The biggest reason we left is that the cost of living is high in the west coast of the USA, compared to most of the rest of the world. If we could travel around the world and actually save money while getting to do something we've always enjoyed doing, then that's great. Going to europe is more expensive than the USA, but not that much, well worth it. In fact, berlin was such cool city, that if germans were more supportive of the idea that we might want to stay there for an extended period we'd be working on residency permits. But behind this reason is another one- The USA is going in the wrong direction. Pick whatever examples work best for you- SOPA, domain seizures, an increasingly baroque tax code, increasing regulations all over that, even though they don't yet effect small businesses much, would be a burden if we are at all successful, even dealing with the TSA when I want to fly, and the thought that my tax money is being used to kill afghani, iraqi, pakistani and other children. When I was young, I was brought up to believe that the USA was great because it believed in human rights. That the bill of rights protected us from an out of control government. Over the years, I've seen those rights be violated, one by one, and the supreme court claim that it was "legal" in their rulings. I've come to believe that there is no effective restraint on the US government by the legal system, and I've been shocked to see, how rapidly these transgressions are accelerating. For instance, I still can't wrap my mind around the fact that at ever airport adults and children have a choice between being photographed nude by government agents and being molested by same. This is a violation of state laws in probably all 50 states, yet no charges have been filed. Worse, while many americans protest, there has been no action. I take this as evidence that americans will put up with any rights violations. Many of them will get mad, but they have no method to resolve the situation. While Obama was president when these scanners were put in, only a couple of the people wanting to run against him want them out. And while Bush was president when the TSA was created and the PATRIOT act was passed, Obama has expanded both. Despite the majority of people opposing various bits of legislation (like the bank bailouts) they still get passed. So, I see no way for things to turn around until things get bad enough to make people really unformfortable. Also, I've studied economics and been watching the economic situation. I've come to understand the real nature of the federal reserve and the fiat currency of the USA. The USA benefited greatly from Bretton Woods alls these decades, but a side effect of that is that the inflation that has existed in the dollar supply has been exported to other countries, giving americans an artificially better standard of living. This in itself is not bad, but it and our debtor economy are dependent on that money being kept out of the system by being locked up in vaults and pocketbooks and accounts of foreigners who want it because they think the dollar is a strong currency. Given the fact that our economy is faltering, but more importantly our government is spending like crazy (obama is worse than bush who was worse than clinton who was worse than bush who was worse than the very bad reagan who was worse than carter, it just goes on...) eventually they are going to be inflating so fast that the dollar loses its reserve status, and at that point, it won't matter that the US government is inflating because people will start dumping their dollars. We'll start seeing the effect of all those previous years inflation that was exported realized in the dollars in a rather short time. This is not a black swan event, it happens regularly, just not often enough that people remember its possible. But because of bretton woods, it will be much worse for the usa than, say, argentina. Its pretty much impossible to do business in the USA and not be tied up in the dollar economy. Meanwhile, because I have been a traveller, I've been to other countries and seen how in some ways at least many of them are better than the USA. Chile for instance, has a culture that is more instinctively capitalist. New Zealand, while its more socialist on the surface has a much less corrupt government. So the question becomes, of all these countries, which provides the best protections of the rights I care most about and is also going in the right direction? I've not yet decided, I'm still traveling. There's a lot to commend the USA. One surprising thing is how convenient having amazon and walmart is. Especially compared to europe. You can just order anything you want from amazon or go to a walmart and buy most anything you want. In europe, the retail stores are generally very tiny, and with the exception of an astounding chain of 3 story electronics shops we found in berlin, its often very hard to find obscure things. And when you do, of course, the prices are often almost doublet the USA due to tariffs and on top of that you've got %20 VAT. One downside of running a startup this way is that traveling involves spending a fair bit of time on the traveling part. This gets in the way of the startup part, and it is also a bit disruptive. Each time we go to the next country we have a bit of time figuring out where the grocery store is, arranging the apartment to suit our needs, etc. We're staying in AirBnB places almost exclusively and AirBnB has totally solved a lot of the hassles of having to find apartments. But we're going to try staying linger- getting permits to stay a year or so in each country. Finally, its a hell of a lot of fun to run a startup this way. So, I'm sure most on hacker news disagree with at least something I've said, and this post is by its nature political because it is a questions whose answers, for me, are politically motivated. I'm not looking for a debate. If you disagree with my perspective on any of these things, that's fine, but I took a long time to reach them, and a lot of consideration, and there's really not much point in trying to persuade me (nor am I trying to pursuade you. I'm just answering the question.) I am up for answering followup questions if anyone's concerned about mechanics etc.

tomkarlo 15y ago

Amazingly, if you have thousands of entrepreneurs, some of them will go to other countries. I'm sure there's also some examples of South Korean entrepreneurs coming to the US and starting businesses here. I've worked with some guys who came from Taiwan and started multi-billion-dollar US ecommerce businesses. Are either of those necessarily trends? Not unless you can come up with some numbers to support the anecdotes, which this story doesn't seem to have. We don't know if entrepreneurs are leaving at a greater rate than before, or even if there's a net loss (lots of people come to the US and end up starting small businesses.) If it's in the story, I missed it.

protez 15y ago

It’s true that South Korean start-up scene is getting better from the interest of institutional funds, which got up from the apparent success of the Grouponzi-style businesses, esp. TicketMonster. But it’s a whole lot different story that the Americans return here because Seoul is a better place for start-ups. The M&A market for Internet start-ups in Seoul is almost non-existent, except few cases like TM, and TNC, the only acquisition Google made in South Korea. I don’t understand how this ecosystem would persist without deals any longer. As a side note, the Shin in the article is a family member of the “big brother” Chaebol, Samsung Group, which has close knots with big conglomerates such as CJ Group, Joongang Ilbo, Shinsegae, and more, almost to the extent of their aggregate revenue reaching almost a half of South Korea GDP, so he earned attractive deals from big local brands so easily. Shin wan’t irrational enough not to exploit his family connections to build a business based on a totally unprofitable model, a feat only possible at the right moment and right place. Definitely, he’s a smart guy, smart enough being ready to return if he no longer sees his advantages here in Seoul, which I think would be quite unlikely though, due to his superb “Zuck status” in S. Korea.