seth posted this on June 05, 2007
From
time to time, someone will call or write about turning one of their
ideas into a startup. It's always really fun to chat with folks like
this... you get to hear some pretty nifty ideas, see what folks think
are emerging areas, and just get to know someone new. One question that
always comes up in these conversations is "do I need to be in Silicon
Valley?"
Tough question, but my answer's very consistent: "Nope, but it sure does help."
Before I moved out to California, people used to tell me that Silicon Valley had an entire eco-system built around startups.
I just didn't get it.
What,
in a tangible way, does that mean to me as someone who is trying to
start a business? Having experienced meebo for the last year and a
half... I finally get it.
First, the people. Silicon Valley is
brimming with people who have deep expertise in technology and
startups. Some may become members of your startup, others may advise
you so that you don't make the same mistakes they did when they first
started out. These same people are likely to have worked in startups
before, and thus they understand the unique constraints and culture of
a startup.
Second, the innovation machines. Stanford
University, The University of California at Berkeley and local
companies are full of new technology and ideas. They also happen to
attract and aggregate the people I mentioned above, who then team up to
work on turning those technologies or ideas into a business.
Third,
the service provider industry. In the Valley you have an entire
industry built around helping startups with their essential needs.
Lawyers in Silicon Valley will often defer your first set of legal
payments until you've raised a Series A venture round of financing.
Real estate agents who, typically, would have no interest in helping
people find a 3,000 square foot office (the commission is just too low
to justify the time) help you in the hope that one day your tiny
startup will become a big startup that needs 100,000 square feet of
space. Oh, and even the landlords are in on the game... they'll enter
into a lease with a company that has no operating history with only 1
month's security deposit... try getting that done in New York!
How
about getting those finances done? Every receipt has to be logged in
Quicken and your forecast presented to your Board. Hence, firms like
Horn Murdock Cole help you get your finances, book-keeping, and human
resources documentation straight. Need help hiring? Dozens of
recruiters who specialize in recruiting technical and managerial talent
for startups are just a phone call away. The support network is simply
amazing.
Fourth, funding your business. Once you've gone about
building an initial team and have launched a product that folks are
hopefully finding useful, you might need additional funds to help scale
the business. That's where one of the numerous VCs, most of them in the
hills just west of Stanford's campus on Sand Hill Road, can help.
A
lot of this stuff is available elsewhere. If you're connected into the
startup fabric of most any city, from Boston to New York to Seattle,
you're likely to find much of the same. But if you're a first time
entrepreneur and need some guidance and a support structure along the
way, it's tough to imagine a more supportive place for building a
company than Silicon Valley.
Seth
And here are some comments:
Manish Baphna Says:
June 6th, 2007 at 6:26 amNice
article..you are correct that Bay area Eco system is some thing which
could be advantageous for new startups . But I feel it also depends on
what kinda of work you are starting and what are your needs and
supports. For example I am in INDIA and tryng to start a company , but
I won’t start in Bangalore unless I have too fundu idea and great money
support. I would prefer to do that in some 2nd level decent city though
Bangalore is No1 in India for these fields. Its very difficult to
retain talent in cities like Bay Area / Bangalore ..specially in tough
times….due to multiple options floating around.
Gavin Quinn Says:
June 6th, 2007 at 6:54 amI
think you have some great points in there. I am working on a startup of
mine with four other great people in Minneapolis, MN. We’re looking for
funding, and we’ve brought in a broker more or less to help us find it.
However, many VC’s that we’ve contacted reject up-front anyone who is
not from the west coast. I think some costs may be less in the Midwest
however, so maybe its a wash. (Real estate, salaries, etc.)
Dele Says:
June 6th, 2007 at 7:54 amit’s
really nice having so much support as this in the Valley, but come down
to it: apart from the many expertise around and the “feel,” in terms of
the revenue and the intense cost of living in Silicon Valley, many
low-end start-up may find it difficult to survive.What about start-up somewhere else then moving to get really
established in SV? I actually thinking of making up my start-up from my
base in Boston.
Gouri Shakar Says:
June 7th, 2007 at 12:00 pmHi Seth,
A nice Informative article and thanx for sharing it,Its true and I
agree with you at some point of time all startups need a additional
funding to move ahead and apart from that there are many things that
goes into it like what SCOTT says but Its good to hear that valley has
many ppl to support startup these kind.I also agree with what jonclassmedia, Manish Baphna, Scott, Gavin
Quinn have said and its true ,I have a small startup in here India http://www.iysys.tk/
whose members a across globe and we also faced most of the problems u
mentioned and I wouldn’t not start a venture in a city like banglore
(one of IT hub of INDIA) unless I have a strong idea or a financial
backupKeep sharing your Experience and thought and thanx for the above ,
Gouri Shankar
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