Archive for October, 2007
Start-Up Hubs
Posted by john in Finance Dept, Founder Fuel, Seedcamp, Tech Stars, Y Combinator, startup on October 19th, 2007
Y-Combinator’s Paul Graham has raised the hackles of a Brit or two recently by suggesting that startups would do better if they moved to Silicon Valley!
In as much as Silicon Valley has a greater density of all the aspects of a start-up hub – great human networks, a willingness to support innovation, a community appreciation of the lessons gained from failure, an acceptance of startups inherent risk/reward ratios and large amounts of seed capital – he is of course right….
…. but Mr.Graham is really talking philosophically, as the biggest problem in moving to Silicon Valley is US immigration !
The point he really means to drive home is that “the more of a startup hub a place is, the better startups will do there” and that the biggest startup hub in the world is Silicon Valley – thus – “go west young (wo)man”.
Whilst he makes a valid point conceptually, I believe that his extrapolation of this point to the nth degree fails to consider one major issue – access. Whilst a willingness to support innovation, a community appreciation of the lessons gained from failure, an acceptance of startups inherent risk/reward ratios and large amounts of seed capital are essential to a start-up hub, they are only of benefit to an entrepreneur after he/she has access to human networks.
What “founder fuel” programs like Y-Combinator, Tech Stars and Seedcamp offer are a bit of “feed capital”, but more importantly they provide a clear and simple path for entrepreneurs to access a great human network. Provided that a city genuinely has all the aspects of a good startup hub mentioned before then the benefit gained from going to a bigger startup hub will almost definitely be outweighed by the difficulties of (and importantly the time spent) trying to gain access to the network.
Given the immigration difficulties of moving to Canada as a young entrepreneur, I would like to tailor the following recommendations to Canadians.
If you are in a Canadian city that has, in volume, all the aspects of a start-up hub, and you have good access to a strong human network – then you don’t need to move to Silicon Valley to startup – go there (with the help of your network) to expand or when you want to sell !
(For a self-professed geek, Mr. Graham does a great job at creating PR – but more on that in another post.)
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