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Worth observing that for all the excitement about the recent crop of billion-dollar Silicon Valley startups, SoftLayer is based in Dallas, TX (and founded only
by dewitt 13y ago
Worth observing that for all the excitement about the recent crop of billion-dollar Silicon Valley startups, SoftLayer is based in Dallas, TX (and founded only in 2005).
I suspect, and this will be easy enough to prove one way or the other after a few years so feel free to call me on it, that we'll see a disproportionate number of successful exits come from /outside/ the valley.
My gut tells me that high-cost of living and inter-company cannibalization are going to make it difficult for companies to sustain long-term growth in the Bay Area (once the data-skewing, one-off, billion-dollar Instagram-esque deals are factored out over time).
Whereas talent will tend to stick to the one or two success stories in less saturated geographies, adding a natural doubling down effect when something is working out well. Sort of a healthy survivorship bias, in a good way.
Edit: And while two anecdotes are still hardly data, I just now noticed that Indianapolis, Indiana based ExactTarget sold today for $2.5B.
- josh2600 13y agoIf you take a worldview of the last five minutes, this is true, but if you look at silicon valley over time, it is demonstrable that many companies in the Bay Area have built holistic and scalable enterprises. Look no further than box.com for a recent example or Intel for an old one.
- nknighthb 13y agoSoftLayer is in Dallas because The Planet, a company dating back to the late 90s, was in Dallas and SL was founded by TP's stupidly-fired COO Lance Crosby. SL ultimately merged with/took over TP after TP had merged with EV1 (another company dating to the late 90s), Crosby continuing as CEO. None of these were startups in the ordinary Silicon Valley sense. They were, fundamentally, managed datacenters (something their geographical location was well-suited for). The companies were built to survive and turn a profit, not achieve a massive exit in the startup lottery.
- levosmetalo 13y agoYou say that as like turning a profit is a bad thing. Are only lottery exit aspires allowed to call themselves startups?
- nknighthb 13y ago> You say that as like turning a profit is a bad thing. This claim has no basis in any reality I am familiar with.
- darkandbrooding 13y agoTone is difficult to convey via the written word, and there is a tendency for the mind to supply it when reading. Read the parent paragraph aloud, and play with the inflection of key words. Your initial tonal interpretation was one of many possibilities.
- lttlrck 13y agoIt's almost as if you replied to the wrong comment.
- chc 13y agoThe term "startup" does have the connotation of aspiring to high levels of growth rather than steady, possibly mediocre profitability.
- lmickh 13y agoCurious, what is the term for a new business that looks to establish steady long-term profitability instead of the grow and cashout model? Knowing would make googling for the profit focused version of HN much easier.
- bluechoochoo 13y agoMeredith Whitney's book is about exactly this, that U.S. economic gravity is shifting "away from the coasts" for a bit. (It just came out today, so I can't say I've read it, just that I've really been looking forward to it.) For those who aren't from the world of finance: Meredith Whitney was one of the first people on wall street to predict the mortgage crisis. The book: (not an affiliate link) http://www.amazon.com/Fate-States-Geography-American-Prosperity/dp/159184570X http://www.amazon.com/Fate-States-Geography-American-Prosper...
- RockyMcNuts 13y agoGotta call BS on her...she was one of the first BANK analysts [1] to say on CNBC that banks were effed... when it was pretty obvious to anyone not in a bank or not on cheerleading CNBC. Then she said munis were effed... went on 60 Minutes and scared a lot of people into losing a lot of money since there have been few defaults, bonds have performed well, and taxes have gone up. A genius is someone who makes the right call in the right media at the right time. http://www.bloomberg.com/news/2013-06-03/meredith-whitney-offers-barrage-of-numbers-errors-books.html http://www.bloomberg.com/news/2013-06-03/meredith-whitney-of... http://blogs.reuters.com/muniland/2013/06/04/meredith-whitneys-great-migration/ http://blogs.reuters.com/muniland/2013/06/04/meredith-whitne... [1] and not even the first - Ivy Zelman made a great case and got herself fired from Credit Suisse in 2007 http://www.calculatedriskblog.com/2007/06/ivy-zelman-departs-credit-suisse.html http://www.calculatedriskblog.com/2007/06/ivy-zelman-departs...
- bradleyjoyce 13y agoThe Dallas startup scene is exploding right now, especially for B2B companies. Geographic convenience to both coasts, low taxes, low living costs, high concentration of Fortune 500s and a lot of good talent itching to leave their cubicles. http://launchdfw.com/ http://launchdfw.com/
- timjahn 13y agoI love seeing more and more online blogs/publications/hubs like Launch DFW popping up for startup activity in cities across the US. A great way to connect people locally and share the happenings with those all over.
- bradleyjoyce 13y agoPerhaps I should have put a disclaimer in my original comment that I'm the founder of Launch DFW (though now am only slightly involved)... the long term vision is to find people passionate about their own communities and create a network of these types of blogs.
- timjahn 13y agoMore power to ya! I hope to see the network of these types of blogs continue to grow.
- masonhensley 13y agoI always forget about TechWildcatters even though I live 3 blocks away from them (Softlayer is 6 blocks in the other direction from my apt.) I wonder why TWC's most recent class has so many concert related businesses (2-3 on quick inspection.) That's something I'd expect from a city like Nashville (a past home.) Anyways, go Dallas!
- shangomoons 13y agoTWC focuses on more of the enterprise/b2b side of things. They also recently opened up a new incubator dedicated solely to healthcare, which could turn into a HUGE market. It seems like many of the accelerators (TechStars, even YCombinator) go through phases where there will be 2-3 similar companies at a time.
- jborden13 13y agoNormally I would agree. But with regards to Dallas, we are a large corporation (and usually energy-focused) first town. The Dallas Morning News, our largest rag here locally, isn't even covering this acquisition: http://www.dallasnews.com/business/ http://www.dallasnews.com/business/ Hard to unseat or even compete with SV if you can't even get local attention or coverage for a big tech/startup win.
- xradionut 13y agoDFW has much more than energy. Corporate HQs, semiconductor, banking, technology, etc... (Although the traffic is starting to suck worse than ever with all the folks from the coasts being lost and construction going on...) There's a large number corporate data jobs in the area needing to be filled. (Analyst, programmer, DBA, warehouse, BIG DATA superstars, whatever...) The Dallas Morning Snooze is not exactly a great source of any business info or news in North Texas. There's a variety of other sources that try to fill the voids.
- jborden13 13y agoI'm by no means arguing that the DMN is a great source for any tech or business news. I am arguing that it is the most read publication in the area and it is representative of what is deemed important by our populous. And what is deemed important by our populous is not startup and tech information. Now if you want to vote for the best burger/margarita/whogivesafuck in town, then you are in luck. There is not enough interest/understanding of the startup world in DFW to even be remotely considered a startup/technology hub or up and coming scene.
- xradionut 13y agoThere's plenty resources, (people, money, schools, tech, etc) in DFW/Austin for startups. Mark Cuban made his beans here almost two decades ago. It's just that the majority of the vultures and technically hip decided that the Valley was place to be. The main issues with North Texas are lack of decent climate/geology, political and cultural issues.
- 13y ago
- danielrhodes 13y agoThere is one major problem to starting what are to become big tech companies outside of the Bay Area: labor supply. Very few places in the world can feed the labor needs of a fast growing tech company. Even the largest companies in the Bay Area have to go to New York, LA, and elsewhere to hire more people. What that means is that you are welcome to start a company wherever you like, but when it comes time to hire a lot of people fast, you wouldn't want to be in any other place.
- eru 13y agoIf your management structure can deal with remote workers, chances might improve.
- pionar 13y agoBut it's normally not a good idea to grow by "hiring a lot of people fast". Startups outside of SV aren't really interested in the rocket growth. What happens usually is that companies with that hockey-stick growth generally just have a lot of layoffs down the road, e.g. Zynga (if they're not bought out for way too much money before this can occur). The navel-gazing doesn't really occur outside of that environment, and the "need to scale" is really just a pissing contest that amateurs crow about while the real men and women get shit done by growing organically, turning a solid profit quarter after quarter and not caring what SV hipsters that don't know what the word profit means say they need to do.
- nlavezzo 13y agoOur company (FoundationDB) is based in the DC Metro area and we have tons of success hiring and retaining top tier engineering talent. The stories we hear about how hard it is to hire while we're out in SV sound really bad. I can only speak for DC, but there is a huge labor force here of highly skilled engineers that have been working on (mostly top secret) defense / intel projects at huge government contractors. They know their jobs are there for them again if they leave and decide to come back, and often they are happy to jump ship and work in a startup if the team and product are compelling. I imagine DC isn't alone in having a niche industry of highly skilled engineers that would be open to startups. Often they're not involved in the startup culture though so it takes some effort to find them.
- brown9-2 13y ago"Disproportionate" to what though? People might tend to overestimate the ratio of companies like this inside the valley versus outside the valley.
- rudhir-secpanel 13y agoTexas has been a magnet for data centers for years.
- mindcrime 13y agoInteresting. I wonder what the factors are that lead to that? Cheap energy? Absence of severe weather? Something else? NC is now becoming know as something of a magnet for data centers[1], and the "cheap energy" part is one of the reasons that's often cited here. [1]: http://www.datacenterknowledge.com/archives/2013/01/04/north-carolina-data-center-corridor/ http://www.datacenterknowledge.com/archives/2013/01/04/north...
- hkarthik 13y agoCheap and plentiful land with very good infrastructure for water and power.
- shangomoons 13y agoThat and it being kind of centrally located. We've also got a lot of talent coming out of local-ish (UTD, UT, UNT, SMU) universities to fill the labor demand.
- pbreit 13y agoI suppose if it's Valley vs The Field and quantity vs value, you might be right, but then you're not making that insightful of a comment. Off the top of my head, I see these getting bought or IPOing in the next few years: Twitter, Square, Eventbrite, Zendesk, Palantir, Pinterest, Stripe, AirBnB, Box, DropBox, Evernote, Practice Fusion, SurveyMonkey, Path, Twilio. And those are just the higher profile ones.
- lanstein 13y agoFireEye, New Relic, AppDynamics
- dsl 13y agoThe Valley conditions you to think startups either fail, get acquired up into one of the big players, or IPO itself. Everyone glosses over the idea of a company just being a going concern and making money. You continue to collect a salary, and your stock never sees a liquidity event. SurveyMonkey will probably do well, but IPO? Only if they can convince some Wall Street types that they can cook the books in a Groupon type arrangement.