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Building a startup is about leverage. Leverage is the ability to magnify your efforts. The bay area reduces your leverage. Especially compared to somewhere like Seattle, or Portland, or Boulder, or Salt Lake City, etc.
11. Everyone is rude. It's like living in New York or LA. The laid back california of the 70s is no more. Maybe Eureka or Weed or Barstow are good places, but the bay area is harsh. Some relish the challenge, others just want to be left alone so they can be productive. Being productive on your product increases leverage...
10. California looks so run down. This is because it is. The quality of life is declining rapidly. There's nowhere to go to escape urban sprawl-- not close anyway and getting there is hours in gridlock. Being unhappy decreases focus which decreases leverage.
9. The population density is so high, everyone is on prozac. (I'm not kidding.) Being depressed reduces leverage.
8. After spending 2 months there, I knew the business plans of 70+ companies in stealth mode. Everyone knows what everyone else is doing. Thus getting an edge on your competition is difficult, they may get your employees, and they do know your ideas. You have less leverage.
7. Every resource is in high demand, thus time spent finding real estate, finding equipment, is higher. The local and state government levels of regulation are very high, and thus time spent dealing with the burocrats is much higher. All these are distractions you don't need.
6. The availability of good startup quality employees is lower in the Bay Area. Because startups per capita is much higher there, there are more startups competing for the same employees.
5. Office rent is expensive, Gas is expensive, Taxes are high, everything you could want to buy costs more. Your burn rate is going to be much higher.
4. You can't find a place to live. Your employees can't either. Both you and your employees need more money to cover basic cost of living... your burn rate is much higher.
3. Being in the bay area means being on the VC treadmill. This is the opposite of working for yourself, you are working for the VCs, and unless you triple their money in three years, you get nothing. This forces bad decisions and much less leverage.
2. Long frustrating commutes reduce employee productivity and morale. They also reduce the length of the workday.
1. The state taxes capital gains like income! So, even if you win, you lose.
The upside... what rocks about the bay area:
10. Better S&M clubs. Much. Better.
9. You can fantasize about one day getting a boat and sailing out under the golden gate bridge.
8. Skinnier (but more expensive) women who want to date geeks.
7. More plastic surgery.
6. More networking events.
5. Better parties.
4. More founders to commisserate with when you're forced out of your company.
3. You can TP Arringtons house if he gives you a bad review, or doesn't invite you to a party, or says something particularly slimy about someone. Hell, just do it anyway.
2. A lot of the good conferences are there, and if they aren't, Las Vegas is closer than to other cities.
And the number one good thing about the bay area:
1. Well, at least its not Los Angeles!
11. As you get closer to larger companies, people on the road tend to be more rude. I'm thinking of the San Jose/Milpitas area. I think most of those workers are unhappy to be treading off to their anonymous jobs :)
10. Disagree. If you live on the 101, I could see how you would feel that way, but try to drive around los gatos or saratoga and say that. No urban sprawl. Plus, 'quality of life' is such a nebulous term....for me, quality of life is improved just by the energy of this place and the diverse types of people it attracts.
9. I don't know anyone on prozac, and I'm not sure what that has to do with population density...
Speaking of population density/sprawl, I met this nice lady very recently who had just relocated from Paris. Having been lucky enough to visit there myself, I had to tell her how beautiful I thought her city was. She said that she was happy to leave, as the bay area was a "lot greener" (her words) and better for children.
8. You point should show anyone why the bay area is a great place. Where else would you know 70 founders?? And getting an edge on your competition doesn't necessarily involve secrecy....
7. Totally agree about having to find a home, etc. But the regulations are pretty minor from a biz standpoint relative to the benefits of doing business here.
6. Would you rather be a big fish in a small pond? If your startup has potential, you should not only be able to compete with other startups to hire, you will be able to pick from among the best people in the world.
5. Second order problems. Instead of looking at expenses, you should be looking at the place that allows your startup to have the most room to grow. If your primary concern is the cost of living, move to Thailand. Gorgeous beaches, your dollar goes incredibly far, and oh, the closest thing to a technology company there is the guy selling electronic keychains on the street...
4. I've been in the valley since 2000 - it's much easier to find a place here now than it was back then. And salaries aren't that much higher here than they are in other tech centers in the USA or even Canada.
3. Disagree. Since when is having more options a negative thing? If you don't need VC money, don't spend your time chasing it. But if you do, you'll have a much better chance getting it here.
Face it - if you need VC money, the treadmill exists regardless of which city your business is situated in - you'll just have an easier time getting on the treadmill if you're in the bay area.
2. Can't disagree with that...commutes certainly suck, and they're longer here than most places.
1. Agreed...which is why holding onto a stock for 1yr is good, but that's a different conversation...
8. No, I didn't know 70 founders, I didn't even know one. But having a friend in the industry who didn't even work for a startup let me know the private details of 2-3 companies a day. This was standard dinner conversation- who's doing what, etc.
6. We're all in the same pond. I'm saying that your chances of beating Bay Area companies is better if you are not in the Bay Area. Most of the best people in the world do not live in the Bay Area.
5. Thailand is probably not a bad place... recruiting bright engineers right out of college is probably easier. Who wants to go live in a cubicle in a generic tilt up rather than a bungalow on a beach in a small town? Cutting these costs means you can pay people more, means you can hire better people, etc.
4. IF this is true, that's even worse. With the dramatically higher cost of living, that means your employees are having more trouble making ends meet (or sharing houses, 2 to a bedroom.)
Anyway, don't want to debate it to death, and was talking tongue in cheek to some extent. Locality is much less important than it was in the 1980s and 1990s. And past success has made the bay area somewhere I'm increasingly less interested in even visiting.
1. Living cost are cheap
2. good internet access
3. lots of people speak english there so you can go on your daily life with english (good for attracting employees from other countries)
4. While I don't discount the usefulness of the networking effect in the bay, it's much more useful if you need investors... Since I plan to bootstrap my company, this is not such a problem....
5. Nice weather, smiling people makes for a place where people are not depressed....
6. I strongly believe that the best employees for a startup are curious and adventurous, an employee that is willing to relocate to malaysia display those qualities
Thus a team of a few can focus just on adding value, making the bootstrapping runway dramatically shorter.
I'm not sure what the benefit of physical networking is (and thus being in the bay area) other than being closer to VCs, and if you don't need VC funding, there's no point.
My favorite beach was packed with 10 other people there last weekend. It was awful. ;)
As for 6 - Thinking back to something Paul Graham said about how the number 6 startup hub should really not even be considered to be in the same league as the number 1 or 2, I wonder if there might be a non-geographic effect to be gained by all the startups who are NOT in the Valley joining virtual forces to be a counterweight to the SF-club.
I think there are likely alot of us, and the bar for our success is certainly lower than it is if you live in the SF-area.
Weird that there aren't any pure Startup conferences, at least that I know of. They all seem to be organized by the funders or by people who are out to make a buck on the conference itself. A conference organized by startups with their interests in mind i.e. no $1500 presentation fees, would potentially still attract investors/press/etc. without having to have the impreteur of some internet celebrity organizing it. Its almost like the word 'startup' itself has enough celebrity around it now to pull its own weight.
We should have it in some decidely non-startup hub, like Hartford CT or something...
http://www.feld.com/blog/archives/001932.html
I've been to a few Technology Meetups like these where 3-5 founders get to present each month and there's usually no fee's involved, other than perhaps a small entry fee to help cover the meeting location if it's not sponsored.
Also, I wonder if something like the effect that we see in the Windows shareware market vs. the Mac shareware market isn't also happening with investors. Mac shareware authors make more money because the mac market is smaller. While the windows market is larger, the proportion of shareware authors is even larger, crowding out your product. So, its more profitable to target the smaller market.
VCs in Texas are more likely to fund a company in Texas... there may be more VCs in California than there are in Texas but there are a lot more startups in california competing for the funding.
I miss Austin for the things that make Austin wonderful, but I don't think I'll ever go there to start a technology startup (unless things change remarkably in the future). And Mountain View and San Francisco are both great places to live, even if they aren't as cool as Austin.
Ok, more venture capitalists in the bay area-- sure, this is a blessing and a curse.
I've listed the downside... I wish someone would give a concrete advantage. (Cause I might be wrong.)
This is where the best startups have been formed and will be formed.
You really haven't given a reason at all... only ad hominem. "Best people naturally want to be where teh best startups are".
I think the best startups are in Seattle, and I've compared both regions. I'm not saying people should move to seattle, though, because "Best" is a fuzzy quantity.
The real question is why? This has never been answered, other than "closeness to VCs".
There's no fundamental advantage to the Bay Area over, say Seattle, or other places that has been mentioned here.
All of the resources you could want are either a lot cheaper elsewhere, or the same price (because they are delivered over the net.)
With the exception of venture capital...
So, fundamental ot this idea of relocating to the bay area is the assumption that you must take venture capital. (And I think this assumption no longer holds.)
The first part is fact. SV has produced more great startups than any other area in the world. Arguing with that fact is futile.
It's not just VC that SV has as an advantage. Its a high density of angel investors and young people wiling to take a risk and launch startups.
As for the assumption of taking venture capital not holding any longer, venture capital in the narrow sense i.e. VC firms - possibly but in the general sense of needing to raise investment at some point, name me a successful startup that hasn't.