Why Startups Should Quit Silicon Valley
I couldn’t help but notice that Yankee Group founder and Xconomist Howard Anderson, in a blatant act of disloyalty (just kidding, Howard), has blogged today for GigaOm, penning a post entitled: “5 Reasons to Move Your Startup Out of Silicon Valley.” The post is vintage Anderson, quippy and pointed—just the way he teaches at MIT’s Sloan School of Management. But the really great thing about it is that instead of complaining about how bad things are here compared to Silicon Valley, he is out there making the case that things are better here (and elsewhere) than in SV. He even turns our bad weather to advantage (read on).
Anderson talks to Valley entrepreneurs about the possibility of moving overseas. But, he says, “If you want to stay stateside, I’m partial to Boston, my home town, but there are plenty of other cities to consider, too. My top non-Silicon Valley cities are: Boston; Pittsburgh; Philadelphia; Austin; Research Triangle Park, N.C.; Minneapolis; Tallahassee; Toronto; and Basking Ridge, N.J.” (Um, Howard, Toronto is not part of the United States.)
Here are his five reasons (and we quote):
1. The weather sucks in some of these towns (not Tallahassee) so your people will actually work instead of bugging out at 5:15 to train for a marathon, triathlon or Ultimate Frisbee.
2. You can recruit better outside the fishbowl. Every technology company hits the wall—some multiple times. In the Valley your employees will bail at the first sign of trouble and jump to a better job in the next parking lot. That means you will have to spike salaries to rebuild your team. Other places in the world aren’t quite so spoiled—or they come to you already cynical and stay through the rough times.
3. You won’t get lost in the startup maze. In the Valley, every VC has a portfolio company in each flavor—their own LP’s can’t tell them apart.
4. In my experience, other startup communities aren’t as pre-occupied with the “exit” as Da Valley. SV VC’s have attention spans measured in picoseconds and will sell/merge your company at the first sign of trouble. I can say that in Boston, at least, we are used to gutting out long “winters.”
5. Academics make great board members. Each of these cities has a rich educational environment and are great places to recruit sartorial advisors. And unlike at Stanford, you won’t have to give up 1 percent of your equity just to put the provost’s name on your board!
You can read Anderson’s full post here.