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.
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.