There are many factors to consider in evaluating the value of a move. Depending on the nature of your startup, it may be more or less valuable to make the move to the Valley.
Here's a few factors that seem relevant to that evaluation.
1. Access to capital
If your company has large upfront capital requirements, then being in a setting with VC's who aren't afraid to take a risk has obvious benefits. However, a lot of web 2.0 startups have relatively low starting costs. You can self-finance the development and launch of a product which attracts a rapidly growing userbase. The main cost isn't even monetary, its opportunity cost. With this done, attracting VC interest is a lot easier, regardless of where you are.
2. Access to talent
Naively, the Bay Area has a lot more talent than other locations and this makes it a better place to do a startup. Problem is, the competition for talent is a lot tougher. If you're a startup in a place with relatively few startups, you have a real shot at attracting the top programmers locally, because you're the only game in town. In the Bay Area you're competing against Google, Facebook and all the rest.
I'm in Waterloo, Canada, and this is evident locally. Waterloo has a terrific undergrad CS program - supposedly, its Microsoft's number one recruiting School - and lots of really talented developers. But there are relatively few Web 2.0 companies in town, which means that startups have (if they're willing to work at it) access to an amazingly talented pool of potential employees, and a real shot at hiring those people.
I don't think one even needs a top CS school locally. My background is as a theoretical physicist, and my observation is that at least in theoretical physics the quality of the top students is pretty much the same everywhere. I'd be surprised if there was much difference in CS. There will be more extraordinary programmers in the MIT CS program, but they will still be there at Podunk State University, and if you're careful and aim high, you'll have a real shot at getting those people onboard.
3. Culture
I don't mean art and a nice orchestra. I mean access to a "can-do" culture, full of sharp people who are plugged in, full of the latest news, insightful (and original!) analysis, and can act as role models, mentors, advisors, and so on. Really sharp criticism and suggestions are worth their weight in gold.
This is something where the Startup Hubs have a major advantage. It also seems to me perhaps the biggest advantage of the YC program - the dinners and other events. In places that are less of a Hub it seems to me that you need to consciously build a really wide network of people who can act in that role for you. This requires work anywhere, but it is a lot harder in somewhere without a startup culture than it is in the Valley.
4. Access to other companies
For some startups it's really important to have access to other companies for partnerships, distribution and so on. For others it's much less important. Obviously, in the former situation being in a Hub has a major benefit, while in the latter situation it is less so.
> There will be more extraordinary programmers in the MIT CS program, but they will still be there at Podunk State University, and if you're careful and aim high, you'll have a real shot at getting those people onboard.
I don't think this is the case. I went to another Canadian university (Queen's), and in my opinion there were perhaps 2 or 3 first-rate programmers in the entire undergraduate program. I'd expect there to be 10x or more that number in a typical Waterloo class. Depressing, perhaps, but true in my experience. There's a strong clustering effect: the best programmers want to be wherever the other best programmers are.
It's interesting that a similar effect doesn't apply in theoretical physics...
I don't know much about Queens (I just moved to Canada), so I'm not sure if this is the kind of comparison I had in mind. I was thinking of the comparison between a top regional University, where there may be 1-3 (typically) students graduating each year who could become theoretical physicists, while at MIT there will be dozens. Would you say Queens is a top regional University in Canada?
> If you're a startup in a place with relatively few startups, you have a real shot at attracting the top programmers locally, because you're the only game in town. In the Bay Area you're competing against Google, Facebook and all the rest.
Are the "top programmers locally" likely to be as good as the "top programmers" in SV? (There is some top talent outside SV, but it's not everywhere and SV has a critical mass in almost every domain.)
What does it say about a biz that can only attract/keep top talent when it's competing against the junior varsity? How will that biz fare against a biz that does attract/keep top talent when competing against top tech companies?
"What does it say about a biz that can only attract/keep top talent when it's competing against the junior varsity? How will that biz fare against a biz that does attract/keep top talent when competing against top tech companies?"
Very True. Case study:
Examine the interface of the Blackberry, largely developed by U of Waterloo interns and graduates. Take a look at the iPhone, developed by Silicon Valley engineers. Which will win in the marketplace?
Here's a few factors that seem relevant to that evaluation.
1. Access to capital
If your company has large upfront capital requirements, then being in a setting with VC's who aren't afraid to take a risk has obvious benefits. However, a lot of web 2.0 startups have relatively low starting costs. You can self-finance the development and launch of a product which attracts a rapidly growing userbase. The main cost isn't even monetary, its opportunity cost. With this done, attracting VC interest is a lot easier, regardless of where you are.
2. Access to talent
Naively, the Bay Area has a lot more talent than other locations and this makes it a better place to do a startup. Problem is, the competition for talent is a lot tougher. If you're a startup in a place with relatively few startups, you have a real shot at attracting the top programmers locally, because you're the only game in town. In the Bay Area you're competing against Google, Facebook and all the rest.
I'm in Waterloo, Canada, and this is evident locally. Waterloo has a terrific undergrad CS program - supposedly, its Microsoft's number one recruiting School - and lots of really talented developers. But there are relatively few Web 2.0 companies in town, which means that startups have (if they're willing to work at it) access to an amazingly talented pool of potential employees, and a real shot at hiring those people.
I don't think one even needs a top CS school locally. My background is as a theoretical physicist, and my observation is that at least in theoretical physics the quality of the top students is pretty much the same everywhere. I'd be surprised if there was much difference in CS. There will be more extraordinary programmers in the MIT CS program, but they will still be there at Podunk State University, and if you're careful and aim high, you'll have a real shot at getting those people onboard.
3. Culture
I don't mean art and a nice orchestra. I mean access to a "can-do" culture, full of sharp people who are plugged in, full of the latest news, insightful (and original!) analysis, and can act as role models, mentors, advisors, and so on. Really sharp criticism and suggestions are worth their weight in gold.
This is something where the Startup Hubs have a major advantage. It also seems to me perhaps the biggest advantage of the YC program - the dinners and other events. In places that are less of a Hub it seems to me that you need to consciously build a really wide network of people who can act in that role for you. This requires work anywhere, but it is a lot harder in somewhere without a startup culture than it is in the Valley.
4. Access to other companies
For some startups it's really important to have access to other companies for partnerships, distribution and so on. For others it's much less important. Obviously, in the former situation being in a Hub has a major benefit, while in the latter situation it is less so.