We didn't leave a void when we left Boston, because we weren't filling one when we were there. No one seems to get this, but seed funding is not a regional business. Startups at that stage can move.
Most of the startups we funded in our Boston cycles didn't come from Boston, and practically all left Boston afterward. We could have been anywhere. Anywhere with decent coffee at least.
Honestly, they'd have done better to just fund 20 startups in Boulder rather than 10 in one place and 10 in another.
Startups at this stage can certain move, but it's expensive (in time and money) to do so. Some startups at this stage have spouses and kids, which makes this a bigger decision. If the spouse has a lucrative job, this makes it more expensive (especially in this market, where there aren't big piles of jobs sitting around in the valley).
In our case, YC was worth it. We left working wives behind and they visited us occasionally to remind us that we were married.
But if there was a similar quality program locally, we would've considered it. (For the record, I don't think TechStars is good enough that we would've punted YC for it if it were local, but it seems to be getting better).
Geography is less of a factor for YC applicants, I'd assume, because YC is far enough above the competition that it's worth it to move.
"Honestly, they'd have done better to just fund 20 startups in Boulder"
I've heard they might do that as well.
I'm guessing the difference between techstars and YC is less about going regional to source applicants than it is about spreading around the mentor pool, sort of like franchising the "learn from elders" experience rather than concentrating it. YC's a bet in the other direction, sure, but I'm also interested to see how this plays out because I just can't imagine the bay area has a complete lock on all of the previously successful entrepreneurs willing to advise the next generation of hackers. At the very least, there's a certain amount of mentors and potential investors that like being away from the echo chamber and prefer to talk in Boston about Derrida rather than in SF/SV about virality, or in the case of Techstars and Brad Feld, about Lance Armstrong, beer and whatever else people like in Boulder.
I see, you're not just talking about network effects of aggregating all of the startups together, it's about having a common pool of investors as well. I wonder if angelconf is a first step towards a ycombinator-like structured approach towards the investing side of the equation?
Not just investors. There is a collection of people associated to varying degrees with YC who advise the startups. (They're the old-looking people in the slides on our frontpage.) Sometimes they invest, but they don't only talk to startups they invest in.
One of the hardest parts of being in Boston for us was that this pool of advisors was so much smaller there. It was just a handful of people. Whereas in the Valley there are on the order of 50 different people we might introduce one or more YC startups to each cycle.
Yeah, that's probably the case, I was just entertaining a thought experiment because I really like the people I've met through techstars and want them to do well.
The bay area's network effects really do create different kinds of opportunity rather than just more of the same - it's the reason I moved to the bay area in the first place three years ago and it's been a great career decision. Living here means being able to do things like apply to yc, whereas I'd probably never consider moving to Boulder or Boston if it just came down to 5 digits of seed investment. I'd rather stay here and force my projects to happen during nights and weekends instead. Here, you'd be crazy to turn down admission to yc and access to the advisors involved, no matter what your day job pays.
Not all can, or are willing, whatever their reasons. While it might be smart business in your case to have picked your location and make the startups come to you, I think it's disingenuous to say that seed funding is not a regional business [because] startups at that stage can move.
I won't bore you with the specifics of my location or what's possible here, but I do think there's a good business opportunity for anybody that's willing to come up with a VC/incubator model similar to yours, but that can be deployed in lots of different locations.
Oh well. Bootstrapping isn't as much fun, but it'll get me there. :-)
It happens that I have a lot of data about the number of startups that need to be in Boston to participate in something like YC, because they were the ones who waited for summer cycles to apply when we had the summer cycles in Boston. Of those we accepted I don't think the number was ever more than 3 a year.
What about network effects? I'm aware that SV is the best, but perhaps there are some benefits to diversifying their presence? Additional exposure to local mentors, raising startup buzz in the area with media/event coverage, even interacting with other local businesses? Since YC decided to leave I imagine these probably weren't very big effects, but I'm curious.
In my experience, concentration produces the most powerful network effects. E.g. the closer the startups are brought together, the more they help one another. This is true both within and between cycles, and between startups and the greater community.
Though this isn't the reason we decided to be in CA year round, such interactions are much increased here. I was sitting in a cafe in Palo Alto recently having lunch, and in the course of one hour I ran into 3 YC founders and 2 angel investors I knew, all 5 of whom were there independently.
The thing we used to like about going back to Cambridge in the summer was the lack of this, actually. If you had to overhear the conversation at the next table, at least it was about Derrida and not virality.
Im in non-silicon valley - and not leaving anytime soon - I have a family, putting down some roots, etc. My hope though was that the online world would provide this network effect, though I guess there is just not enough bandwidth in online interactions for people to size each other up, make friendships, relationships, etc.
I understand the Silicon Valley advantage exists b/c of the physical proximity of so many important ingredients, and the overwhelming number of the ingredients, but surely the number of non-SV people outnumbers even that.
I would love to hear those kinds of conversations in diners around here - but it doesn't happen. The only place I hear those kinds of conversations are here, on the web. I have a fairly limited dialog with people on these subjects, really the market and my partner are the major sources of input for ideas and where to go in the future.
I'd love to be in SV, to be a part of it, but I'm not willing to trade what I and my family have for the benefits to found there. How can anyone afford to live there also, is beyond me.
Anyway - i'm rambling. I guess I should start to take my online identity more seriously. I should post in my profile what my company is and does. I should try and connect with people I meet on here. But finally, something is holding me back - a certain innate caution retreats from that type of display. Because for all of the wonderful people that are on here, there are probably some bad apples. I guess its the same as in the physical world, but there you have cues, and police, and safety.
pg - any way to add some kind of reputational system to hacker news? Or maybe thats a good startup idea.
You could put in anyone's username, and any site, and rate them on a series of categories - whatever. It can be as simple as 'friend' like facebook. But it would be a kind of metadata for these relationships. I could see if someone who is a friend of mine on here likes them, trusts them, etc. Though making all of that explicit might be too much. Human social interaction allows for alot of subtlety - you can say alot without saying anything. Thats another place online communication suffers, its very hard to detect sarcasm,etc. Oh well, I guess I'm really rambling now.
any way to add some kind of reputational system to hacker news?
I've often thought of doing something like that, as an aid to people trying to find hackers to hire. Would other people want such a thing? (Assuming it could be implemented in a way that wasn't obnoxious.)
Most of the startups we funded in our Boston cycles didn't come from Boston, and practically all left Boston afterward. We could have been anywhere. Anywhere with decent coffee at least.
Honestly, they'd have done better to just fund 20 startups in Boulder rather than 10 in one place and 10 in another.