In London you are competing with cash flow oriented industries that will set expectations for the compensation mix, so you are in practice left with somewhat marginal people and not the best. This crowding out effect, compounded by the relatively small exits produced in the UK and an inferior work ethic compared to the US, explains why both founders and employees are less good on average than in some other startup hubs.
For the UK startup scene to really succeed we basically need to destroy the banks and agencies.
I think one of the smartest things this Government has done is to recognise that and ignore calls from people outside London to create something elsewhere. But yes, London is frigging expensive. That said, you can live close to, but outside London and it's no more expensive than the other places you mention.
Case of city A: Say, there are 50,000 residents of which 500 are of interest. There's an event hosted and 25% of those "interesting" people show up. You, who's attending this event, have a pool of 125 people out of which, say 5% can help you AND you'll bump into. So chances are you'll meet 6 people. Density: 0.01.
Case of city B: 5,000 residents, 100 interesting, 25 show up, chances are you'll meet only 1 person. Density: 0.02 (double).
One thing I was wondering was what "population" was used. I assume it's the city population. Using MSA or CSA populations could lead to very different results, most likely favoring smaller locales.
In the past three months, I've met a CEO of a 300 person gaming company, M&A execs from Fortune 500's, Engineer[0] from Google Finance, the head of the Singularity Institute, artists that make 2 story flaming sculptures, an architect that works on computational architecture, a man who built a battery that charges in 10 minutes that is currently in use by Special Forces in Afghanistan, a former Yahoo VP, a VP from AT&T, the CTO of America and the man who wrote the Jobs bill... a person on the US Council of Foreign Relations, a man who helped the Arab spring flower in Egypt...
That's not to brag. I've simply been extremely deliberate about networking over the past 5 years.
In Silicon Valley, even after being here for 6 months. You probably don't realize it, but you're only 2 or 3 degrees of separation from everyone else who's really, really impressive in town.
To that density, add a culture that places an extremely high value on helping others out, and you have something amazing.
You may be 2-3 degrees from John Doerr, but the question is, could you actually get a meeting with him?
Just my intuition, having lived in the Valley (8 years) and Austin (10 years) is that the Bay Area gets a B- for openness, compared to Austin which gets an A-.
That depends.
Adam Rifkin, the founder of the 106 Miles meetup and pretty kick ass nice guy and serial entrepreneur, was funded 12 years ago by Kliener Perkins. So, if you got to Adam's meetup, and bump into him, you're now 1 degree of separation away from John Doerr.
So, if you take Adam out to coffee, and talk to him about getting an introduction to John, Adam can certainly provide an into to John, but he's far more likely to talk to you, get a feel for what you're doing, and then provide introductions to 10 other investors and amazing people that could probably provide as much or more value than John Doer.
Good question.
There's also a very strong culture in Silicon Valley of "quality introductions".
The perceived value of a person's personal network in Silicon Valley is directly proportional to the quality of introductions that person can make to others. (Read: matching person to investor)
What node foo in this graph do I need to connect to? What nodes bar[] surround foo? What is the strength of each edge connecting bar[node] to foo?
Getting from node baz to node foo is recursive:
Get_to_Node_Foo( node baz ): Look at all the edges and nodes surrounding baz. Are you next to foo? Ask for intro. Else, move to the node that seems closest to foo. get_to_node_Foo( that_new_node ).
I know this will be an unpopular opinion round these parts, but SF is not somewhere I'd ever chose to live. The bad points vastly outweigh the good points for me.
But would you rather (a) live in your choice of San Francisco, New York, Austin, Boston, or Boulder; or (b) pick five cities at random from an alphabetical list and then choose one of them to live in?
I expect the vast majority of HN readers would choose (a). SF has some disadvantages (cold weather in summer, astronomical cost of living), but pretty much all startup hubs have a high concentration of energy and generally ambitious people.
I live in England, where we get glorious boiling summers, wet and windy autumns, snowy winters. I know that's not for everyone, but the sheer variety is something I love.
To see the scenery and wildlife change by season is something that really makes life interesting.
Since people are showing off re SV, I'll do the same for Chicago- where I've in the past couple of weeks met: CTO for Barack Obama (ran into at falafel place), Founder of Groupon (stood next to at Weezer concert sponsored by NEA, talked to him for a bit), Dave McClure (He's an investor in us, we had dinner. He comes to Chicago often and spends a lot of time with us because we were his only investment here until last month), VP from Motorola Mobility (architecture tour), State Senator from Ohio (bar), A Macarthur Fellow Architect (female, met at bar), Vice Chairman for Goldman Sachs Investment Banking (happy hour), etc etc etc.
Furthermore, just by chance (ie we didn't know this going in and it is NOT the startup hub area within Chicago), within 3 blocks of FeeFighters office are: 37signals, SproutSocial, Threadless, Crowdspring, and several other startups. I don't see how it helps us significantly to bump into them (though we have helped our neighbors when they've had merchant account issues). Many people think it is a wasteland anywhere not the valley but I have seen that not to be the case here, in New York, and even in Pittsburgh.
So what is the difference between here and there? The largest differentiator I've noticed between the valley and elsewhere is funding. We raised most of our money in Chicago from VC's we really like, but could have raised easier on the west coast. A lot of top VC's prefer to have you close and told us flat out they would fund us if we moved there. We had term sheets dependent on us being in Austin, SF, and LA. I don't think it has had an effect one way or another on our business thus far.
Startups need money, and often flock to where it is. Things are changing all over the place though (Rich people in Chicago all of a sudden want to fund startups, will be interesting to see if that continues post-Groupon IPO) It also depends on your type of business. If you sell mainly to startups, you should probably be in the valley.
BTW in case you missed the discussion re: PG's original article, it is here: http://news.ycombinator.com/item?id=3077165
I personally have pessimistic view on the Chicago area in the intermediate term (5-10.)
Regards, TDL
But you can't cite bumping into Dave McClure as evidence of anything other than Dave McClure travels, A LOT. ;)
18 months ago I relocated from my home town of Glasgow, to London, just 400 miles away. An important reason for the move was because I had just started working on my new startup, Teamly, and I know that location matters, even when running an internet business. Don’t kid yourself otherwise, your chance of success is seriously improved when you’re in a startup hub.
18 months later and moving to London has proved to be a smart move, for all the expected reasons, as well as the unexpected recognition by the UK Government of London’s startups with the launch a year ago of “TechCity“.
I don't think you can really say that moving to London to operate your business there versus operating in Glasgow was a "smart move", as you have no way of knowing what level of success your startup would have had in Glasgow (since you never experienced this alternate reality).
Sure you made a lot of great connections as a result of your move, but it is impossible to know what connections you never made because you weren't in Glasgow during those 18 months. There is no way of knowing whether you missed out on something (a chance meeting/encounter/coffee, etc) which, while it may have been less probable, would have been of more value to the success of your startup.
Using city-level population just makes small cities look great (Boulder) and big cities look terrible (NYC), when I'm pretty sure there are neighborhoods in NYC that blow away Boulder.
