It often strikes me as ironic that the very people who build the connected applications that live in the virtual world of the internet are so obsessed about the physical location requirement of San Francisco (and Silicon Valley), in order to become successful in delivering that virtual offering.
That being said I have never worked in or worked for a company in "the valley". I've also been a remote freelancer for 15 years so maybe I just don't get it.
Do these talented people really need to be in an office in Silicon Valley, sitting opposite you, tapping away on their keybosrds with their headphones on to as productive or better than me or you?
Obviously the data suggests that the most successful companies are there, but is that not just cause and effect?
I commented this exact same thing on the last article about living broke in SF that made the front page. It's incredibly ironic. People often talk about talent pool and access to capital as being the main advantages of being in the Valley. These advantages exist to some degree, but are vastly overblown, and you will only be in a position to use them if you are already successful.
Further, even if you are funded and successful, moving to the Valley probably doesn't make sense in your early stages (and for most, it will never make financial sense). Most people would rather work remotely than go into your early-stage startup office in a bad part of town anyway. The tools to make scattered teams very productive and cohesive have existed for a long time. As far as access to capital, if you get funded by a major VC firm that wants you to move to the Valley, you'll have millions of dollars with which to do it properly.
There are exactly zero legitimate reasons to move to the Valley in the initial stages of a startup, and many legitimate reasons not to. In fact I would think that most investors would look at the irrationality of such a poor decision for the financial health of a company and decide against funding it. It's indicative of bad, emotional decision making. Being in the Valley doesn't make your startup any more credible or valuable than it would be anywhere else. Developing a great product that delivers value to customers is the only way to have a successful startup - regardless of where you start. Begin with that, then move wherever you want.
> In fact I would think that most investors would look at the irrationality of such a poor decision for the financial health of a company and decide against funding it. It's indicative of bad, emotional decision making.
The comical part of this is that YC does just this [force/strongly encourage] their tech startups to be located in one of these locations.
True, although YC is a pretty special case where they actually leverage that physical proximity extremely well. They have office hours with powerhouse investors and entrepreneurs, dinners with special guest speakers, access to a large number of angel investors with whom they can have meetings, etc. These are resources that startups living in crack motels in SF aren't going to have access to. So for those privileged few lucky enough to be accepted to YC, being in SF at least for the duration of the program certainly makes sense.
Plenty of companies have 1,000+ developers and zero presence in the valley. It's ridiculously overpriced and only really useful for fundraising. Which is why most successful companies mostly grow outside of the valley.
Yes, there are lots of companies outside the Bay. Yes, lots of them have lots of people.
And yet there's a disproportionate number of companies in the Bay. So perhaps it should be seriously considered that there are rational reasons for that. Ease of access to talent is one I hear a lot from founders and hiring managers.
Have you ever recruited anyone here? The unemployment rate for good engineers is negative here: you're not just competing with their current job, but with the two other startups who are wooing them, and the one they're thinking about starting.
If you're building something that doesn't require elite technical skill (like most startups), locating in silicon valley is a net negative for recruiting. You're going to have a very difficult time convincing someone to leave Google to work on your social secret photo food delivery app for dogs.
I have. I've also recruited elsewhere. The unemployment rate you cite makes engineers much more comfortable with uncertain companies, which is a tremendous stumbling block when trying to hire outside the Valley. It dramatically reduces the risk of joining a startup.
The virtual world is great but it doesn't replace the physical world. Location still makes a huge difference to tech startups in terms of getting talent, finding venues and events to pitch your idea, getting investor attention, and all that.
No matter how good our video streaming technology these days, it still makes a big, big difference to be with the right people in person.
If you were in middle-of-nowhere Nebraska you'd have a hard time finding co-founders, programmers, or investors within a 100-mile radius. Not to say it's a bad place, but it's really not the best place to be for a tech startup (unless you're completely set on a one-person startup, it's your parents' home and you just need a few months offline to churn out code on free rent and free food, or that place is your target market, in which case it might make some sense).
That said, I don't think the bay area is the only place. I'm working on an idea and I'm planning to stay in Boston for a while since the environment here is just starting to become awesome.
If you were in the middle of nowhere, Nebraska, you could move to Omaha or Denver, and you no longer have those problems created by not being in close proximity to a metropolis. You retain the advantages of being in an environment where housing and office space are cheaper, commutes are less onerous, and taxes are more affordable. The talent pools are smaller, but they are also less competitive. The investment pools are smaller, but their funding stretches further. Pitch opportunities will be rarer, obviously, so you would need to go farther afield to find them, and mid-continental businesses are far more conservative with new ventures than coastal companies.
The only real advantage to SV is that it has more money sloshing around, desperately trying to spill out onto the next profit opportunity. By comparison, everywhere else has already tightened their belts by at least two holes, and will look on your blue-sky babbling with extreme suspicion.
But if you don't need outside investment, and you don't need to be physically close to customers, any metropolis in the U.S. (and quite a few in Canada) will do. Some are better than others, obviously, but none will be so bad that they will cause your business to fail--not even the declining Rust Belt cities, like Detroit.
>Do these talented people really need to be in an office in Silicon Valley, sitting opposite you, tapping away on their keybosrds with their headphones on to as productive or better than me or you?
It really depends on the person. I know for me? I'm vastly more productive when I'm trying to ignore the other people in the room and work.
For me? It's at least in part about immediate and constant social pressure. That, and showing off. I would be super embarrassed, say, if a co-worker noticed me reading HN during work hours. How come I haven't been able to implement something remote for this? Could you rig up webcams or telepresence bots to do the same thing? I don't know.
Working remote? oh well, I just won't put that hour on my timesheet. I mean, I'm honest about my hours, but in the last few remote situations I was in, I just didn't put in the hours.
Now, not everyone is like this. I know many people that are vastly more productive when alone, in fact the most productive individual contributor technical people I know are vastly more productive alone.
But for me, my own faults and weaknesses line up such that I need an office. I need that social pressure keeping me on track. The difference in productivity is vast; enough, at least, to justify significant rent and some commute time.
I understand this too. I prefer to rent a desk in a co-working space rather than work from home. Hence I'm still remote, but I don't work in "THE office" nor "at home".
How has the co-working space worked for you as far as social pressure goes? Being the only person from my company in a co-working space hasn't worked well for me, but I've mostly only used the hacker dojo, which is perhaps a little bit too social for what I need?
As far as I can tell, I need people that are working on the same project as I am. I need that feeling that I'm betraying or failing those people if I'm not working on the thing I'm supposed to be working on. (why don't I get this with remote work? I should. it's irrational, but those feelings seem to only "work" in person.)
On a more rational level, I can, and will say "Hey, I'm distracted. Can someone put me back on track?" and that seems to work better in person than doing the same in IRC.
I speak to people in "the office" via Skype regularly throughout the day.
I have a daily 10 minute team stand-up via conference call (our team has a good microphone in the main office).
My code check-ins are there for everyone to see. If there was a lack of them, it would be pretty obvious that I was not pulling my weight.
The people in my co-working space are heads down busy. I go for lunch with some of them, but other than that, there isn't that much chit-chat whilst we sit at our desks and work.
That's not to say that I'm never distracted or procrastinating. However, the cause of my procrastination is the same regardless of environment. Whether it is my old corporate cube environment (surrounded by by co-workers), my co-working space (surrounded by random people working), and my home office (surrounded by my cat) the root cause is that the work is uninteresting and uninspiring. A change of project is the best way to change that. A new feature rather than support another. A walk around the block and some fresh air a short term fix.
>That's not to say that I'm never distracted or procrastinating. However, the cause of my procrastination is the same regardless of environment. Whether it is my old corporate cube environment (surrounded by by co-workers), my co-working space (surrounded by random people working), and my home office (surrounded by my cat) the root cause is that the work is uninteresting and uninspiring. A change of project is the best way to change that. A new feature rather than support another. A walk around the block and some fresh air a short term fix.
Yeah, for me? that usually doesn't work. I mean, I switch tasks and goals often, but that doesn't help me focus, usually, at least not long enough to accomplish something. Work is one of those things that is less immediately satisfying than, say, hacker news, games, or a billion other distractions, but work is vastly more satisfying when I accomplish something. For me? it takes a lot of effort and tricks to get myself to focus long enough to finish something, but when I do? it's incredibly rewarding. Maybe I need to break up my tasks into smaller chunks? But a lot of my work is support-type work, where it's already in smallish chunks.
But... yeah. I suppose other people are better able to focus on that further-out reward than I am. Maybe it's just me? Maybe it's that I'm coming down off of a long period of being less than productive?
Either way, I think that personally, I'm way better off showing up.
The data suggests that many of the most successful companies are there, but certainly not all of them (and the ones outside are probably a lot quieter or covered less in the news). Turns out there is a lot higher concentration of people trying to build startups there than the average city, so as a consequence of that more are there.
Having built my own, raised money, and gained traction, all outside of the valley (though I do spend a fair amount of time there), I don't see myself rushing to do my next one in SV.
When you're in the ideation stage of a startup it's hugely valuable to be in the same room arguing over the same whiteboard. There's no higher bandwidth way of communicating, learning and building consensus. Once you've decided what to do remote can totally work, but most startups are in that first phase for quite a while.
There are lots of other reasons for being in the bay area in particular, but that's the primary reason for founders being in the same physical location.
Well SV is one of the only places where they have these wheelbarrows full of millions of dollars to throw at tech companies, so I would think that location is pretty important if you're interested in VC funding.
But Silicon Valley is where the talent is and is easiest to find. It's where growth is easier than anywhere else. The financial price is generally worth it.
As I understand it, most startups are founded wherever the founders happen to be. Once you have a concentration of talent in one spot, that's going to tend to be that wherever. It's rare to move away from the Valley to found a startup so you can move back later.
That being said I have never worked in or worked for a company in "the valley". I've also been a remote freelancer for 15 years so maybe I just don't get it.
Do these talented people really need to be in an office in Silicon Valley, sitting opposite you, tapping away on their keybosrds with their headphones on to as productive or better than me or you?
Obviously the data suggests that the most successful companies are there, but is that not just cause and effect?