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Comment by yesimahuman | Hacker News Reader

He sort of shows the bay area bias with the bit about how “$100M” startups will be created elsewhere. There have been some much larger startups outside of the Bay Area and I suspect that trend to continue. Unicorns aren’t just a bay area phenomenon anymore

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The Bay Area has less than 1/30th the US population and yet the majority of US unicorns and decacorns have hailed from here. It's wildly disproportionate.

Is this attributable to the quality of the startups or the easy access to capital?

In my experience, it is largely attributable to local culture. The intersection of high-quality engineering talent and ambition bordering on megalomania is quite rare, but you need it to build a strong tech-driven company. In the vast majority of places in the world, and even in much of the US, this is neither socially prevalent nor culturally accepted. You have this in the Bay Area and to a lesser extent Seattle, but not too many other places in my experience.

There are a number of cities around the world that have high-quality engineering talent in sufficient quantity, that part is easy to replicate. The complaint I consistently hear from startup founders across Europe (where I've worked) and in some parts of the US is that there is a broad and deep-seated lack of ambition or appetite to do very difficult engineering. The reasons for this are multi-faceted and complicated, so it isn't something that can be reduced to a soundbite or easily changed. The intensity of effort applied to technical problem solving that we take for granted on the west coast is very much not the default case most other places, and this is compounded by the relative lack of experience building high-performing engineering organizations.

I've seen the same thing at several places on Germany. Managers pulling people off a product that was growing rapidly and just needed a bit more time to gain industry credibility, to put them on contracting rolls to Tier 1 suppliers to the automotive industry. There were also silly things like hampering future growth through exclusive/paid feature development in order to make today's profits look better.

It was really short term thinking that didn't understand the industry requirements and ended up throwing the product under a bus to get a tiny bit of upfront guaranteed income.

I’d say it’s the people — combination of mindset and talent. Self-selecting group traveling to a place where only the strong can survive and the exceptional can thrive.

Most of the people I work with day to day are not just brilliant, but extremely driven as well. That was never true in the other places I’ve lived. The were lots of brilliant lazy people, and lots of super driven, less naturally gifted people.

In the Bay Area you kinda have to be both and have your eye on some bigger future, or there’s no point in being here.

Easy access to capital, easy access to large numbers of potential employees (many of whom have prior experience working for tech startups), and access to early-adopter customers / users.

Whether you'd consider that "quality of startup" or not is up to you. When it comes to hyper growth success, there are multiple structural factors that really make it easier to scale in the Bay Area, despite the 2-3x multiplier in cost per employee.

That wasn’t my point. The framing was clearly used like “lifestyle business” is used. There have and will be unicorns outside of the valley, but he doesn’t seem to want to recognize that, hence the “$100M” framing

I think you’re misinterpreting his point. He’s not saying there won’t be unicorns outside of the valley. He’s saying the cost/benefit of being in SV makes sense for unicorns but not for many 100m startups. As a result, you’ll still see a disproportionate number of unicorns in SV but more 100m startups will start moving away.

This seems tautological. Do you have a source?

How is that tautological? It's clearly an empirical statement. My source is my own observations of decacorns as well as IPOs during the last year.

That said, feel free to skim through this (slightly outdated) list and note how a large fraction of the US-based companies are based in SF or SV: http://fortune.com/unicorns/

There are many billion dollar private companies that meet the strict definition but do not get included in lists of “unicorns”: https://www.forbes.com/largest-private-companies/list/

Skimming through that list they look like long-running businesses, not startups. They may have been startups once upon a time (same as any publicly-traded business for that matter), but they're completely irrelevant to a discussion of where modern day startups seeking to scale to billion dollar entities should be founded.

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