Boston vs. NYC vs. Silicon Valley? Forget It—The Real City of Innovation Is Everywhere

10/1/10Follow @wroush

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Sergey Brin and Larry Page had gone to graduate school at Columbia instead of Stanford? If New York is such a terrible place to build a tech startup, what are Foursquare and Hunch and Boxee and Bug Labs and Gawker and TechStars doing there?

Boston vs. New York vs. Silicon Valley is a fruitless debate rooted in fossilized provincialism of the same sort that drives the great sports rivalries. No one thinks that Philadelphia must be a great place to live simply because the Phillies have the best win-loss record in baseball this year, or that the Pirates’ dismal record means people should move out of Pittsburgh. Especially not in an era when free agency means the major-league lineups can be so thoroughly reshuffled from season to season. My argument is that the resources that drive innovation are like free agents, but are even more fluid.

Sure, if you’re a startup founder you should pick a location where you’ll have access to the resources you need. But from what I’ve seen, finding those resources is more a matter of who you know than where the people you know park their cars. By all means make the fundraising rounds on Menlo Park’s Sand Hill Road or Waltham’s Mount Money. But don’t put your company in Silicon Valley or Boston just because those places have the highest concentration of venture capital firms. After all, cash is the most liquid resource of all. Build your company wherever you’re happiest, and use technology to make it hang together. (Hint: once you’ve got your money, Skype makes it easy to have board meetings without having to fly everyone to the same place. And as I wrote last week, Anybots has another interesting solution to the telepresence problem.)

There’s a startup nominally based in San Francisco, Automattic, that presages where I think a lot of companies are going. Started by Matt Mullenweg, this is the company behind the WordPress platform used by Xconomy and thousands of other publishers and bloggers. It sublets some space on Pier 38 near the South Beach Marina, but the place is really more of a lounge than an office, and if you just stop by randomly, you’re likely to find it empty. Mullenweg goes there only once a week, and he lives just five minutes away. (“We leased it so we wouldn’t have to keep borrowing conference rooms from our VC partners” for board meetings, he told Inc. magazine last year.) Everyone at Automattic works from home, and only eight of the company’s 40 employees live in the Bay Area. The rest are scattered around the world, in places like Bulgaria and Ireland and Alabama. The company operates around the clock, and staffers stay in touch using P2, a Twitter-inspired group blogging tool that Automattic developed specifically for in-house communications.

Obviously, the Automattic model wouldn’t work for companies whose work demands labs, factory machinery, or warehouses. And I’m not trying to say that geography makes zero difference in the technology business. Here at Xconomy, for example, our small staff of journalists can’t be everywhere at once, so we’ve singled out Boston, Detroit, San Diego, San Francisco, and Seattle as the places we’re mostly like to find illuminating stories about companies bringing world-changing technologies to market. But we plan to keep expanding into new cities, because we know that no single place has a lock on innovation.

What should we call this sprawling city of innovation that I’m describing? Certainly not OBAMA, which is too partisan and leaves out the West. After playing with the Scrabble pieces for a while, the best I could come up with is BoBoSSCANDALS. That stands for Boston-Boulder-San Francisco-San Diego-Chicago-Austin-New York-Detroit-Atlanta-Los Angeles-Seattle. (Apologies to Cleveland, Dallas, Denver, Miami, Minneapolis, Philadelphia, Pittsburgh, Phoenix, and Salt Lake City; I just couldn’t fit you in.) But seriously—let’s stop worrying so much about where innovation happens and just get behind the people who are doing it, wherever they may be.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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  • Jerry Jeff

    Interesting article, Wade. As someone with one foot planted in the past I am a little resistant to the distributed work-place. My main concern is with the quality of communication and interaction that you get electronically vs. face-to-face. For example, do you get the same depth of interaction with your Boston colleagues and editors now that you’re in SF? Or more generally, can junior employees learn to speak up and get help efficiently and appropriately? Can crisis response and troubleshooting happen efficiently? Can you achieve the same efficacy of instruction in an email vs. dragging someone over to the whiteboard for an explanation?

    I just read “A Visit From the Goon Squad” which presents a terrifying vision of a mostly post-verbal future, so maybe that’s coloring my thinking. But electronic communication at work does seem to be a case of giving up a little quality for increased convenience.

  • http://www.woodka.com donna

    If Google would open offices in different cities, or simply believe in the idea you’re talking about and let people live anywhere and work for them, it would be a different company. I’ve been approached by Google several times, and always asked when they were opening their San Diego office or if they would let me telecommute, and been told no, so I don’t work for them.

    The reality is, people do have to live somewhere, especially if they have family/kids/etc, and yes, it can matter where a company is located. I’m not going to uproot my family to go work for a company if my kids are little or I have a house I can’t sell. So that makes a difference in the people who work in a company. And people ARE the company, no matter what else the company might think. We are not interchangeable parts.

    But I do value telecommuting and often do much of a job from home, then go into the office. It was always amusing when my boss asked if something has been done, and I asked why he hadn’t read his email. Or when I would get in trouble for not being in my office when he wanted me, and I was in one of the other buildings talking to a project manager.

    So both sides of the issue need to be seen. It isn’t one or the other anymore — it’s both.

  • Klaus Zinser

    A comment from Germany:
    Both Andy Bechtolsheim, German and also Martin Roscheisen, Austrian nationality who are very sucessful have mentioned that they would have not been that sucessful in Europe compared to Silicon Valley where they are live now.
    As I know, it is mainly the entrepreneurial culture they have experienced at Stanford and other places.
    Also I am sure there es even a difference between people splitted several miles away from each other and working at the same place.
    I agree, through the internet, virtualisation etc, nowadays there are much more possible what would have never existed as a dream 30 years ago. Nowadays even from a small village I am able to get knowledge through youtube, I can collaborate through skype. In a few years people will be able to produce items on a 3D printer at home.
    But, in the next 10 or 20 years I don’t see the possibility to exchange the spirit thats on one place to another place. Not even when it is 100 miles away and the people work in the same company.

  • http://www.dailygrommet.com Jules Pieri, CEO Daily Grommet

    Hi Wade, This article is very timely for me. Two weeks ago I met one of our key employees for the first time….she has been on the job for many months but she is in San Diego and I am in Boston. She’s doing a terrific job, but I expected to have a discussion about how we can do even more to better integrate her into the company and her response was; “I am integrated. There isn’t a problem there.” A lot of this reaction is a credit to our CMO, her boss, because our whole marketing team is virtual and Jeanne has figured out how to make it work very well.

    But now I am circling hiring my own cross-country direct report with both curiosity and concern–I’m not sure I will be as effective at this as Jeanne! This article was helpful to me to see other perspectives. I think it something we HAVE to do if we want the very best talent. And I suspect Skype is going to be my new best friend. Thanks for the article.

  • http://www.xconomy.com/author/wroush/ Wade Roush

    Thanks, all, for your great comments! It’s interesting to me that most of these comments pick up on the distributed work aspect of the piece rather than the geographical rivalry piece. The piece really started out as a meditation on the endless Boston vs. New York vs. Silicon Valley debate, and I wound up turning to telework as an argument for why that debate doesn’t matter so much anymore, and that seems to be the part that interests people the most, which is great (and in line with my argument)!

    @Jerry Jeff: You were asking whether I feel that Xconomy, as a distributed organization, has found a way to maintain the depth of our long-distance interactions. We find that email, phone, and our twice-weekly teleconferences work pretty well. But I think we’re always looking for ways to stay more integrated.

    @Donna: I agree with you. There are some companies where presence and location are a big part of the culture, and I think Google has always been one of those. Each of their big offices, like the Googleplex in Mountain View and the satellites in Boston and New York, have their own special energy. It would be hard to feel like a Googler if you were working solely from home.

    @Klaus: I admit that I was thinking mainly of the United States in my argument above. I am not up to speed on whether various parts of Europe are as friendly to entrepreneurship. But as connectivity reaches everywhere, it will at least be possible to do the *work* from a village in the Bavarian Alps or anywhere else. Finding the money is the harder part and for that, entrepreneurs may still have to travel to the capitals of finance.

    @Jules: Thanks for reading, and I’m glad to hear the Daily Grommet is expanding geographically! I would be curious to hear what Jeanne is doing that makes her report feel so integrated. As for Skype, I don’t know what I’d do without it — I sure would feel a lot less involved in the lives of my young nephew and niece in Fairbanks, Alaska!

  • http://www.currensee.com Asaf

    Wade,

    I have to say that your argument is interesting though not that relevant to the question of where is a good place to start a company.

    As an entrepreneur in the Boston area who has employees in Boston, London, Denver, Shanghai and they all work great together, and feel part of the company, I think that starting a company and innovating cannot be done [at this moment] in the virtual world.

    Each area be it San Francisco, Boston, NY, London, Tel Aviv, has its advantages and disadvantages when starting a company and in my opinion, each company has different needs, different customers, different capital requirements and different required talent and an entrepreneur should think about those things when he starts his business.

    Starting a company in the right place for it can make a big difference on the outcome.

  • http://www.dailygrommet.com Jeanne

    Definitely a timely topic for us here at Daily Grommet, Wade. As Jules mentioned, my marketing team is remote and you’d really never know it. I think the main reason this works so well for us is that they’re focused, talented, independent and incredibly driven. Obviously it’s not an arrangement that makes sense for every job or for every person — as you pointed out, I imagine it would be tough to manage an entry-level or more junior team member remotely. We keep in close contact, respond to each other immediately, and in the end, are just as efficient (if not more!) as if they were right here beside me.

  • http://danweinreb.org/blog Dan Weinreb

    Wade: I’m not so sure. I’m at ITA Software. We have just about the whole company in Cambridge. It’s extremely helpful to be able to just stop by someone’s office and talk. Conversations over lunch yield serendipitous information, and make working life more fun. Personally, this matters a lot to me and I would not like to work at home. (Although that’s just me, and many people feel differently.)

    I’m at the SPLASH 2010 conference right now, and being able to run into friends and meet new peole face-to-face is invaluaable. Technology will have to advance a whole lot to be able to catch up with this. Of course the price is still high — time and money for travel and hotels, for example.

    That said, once someone has worked physically in Cambridge, they can often transfer to telecommuting without trouble. I have two close friends who are married and live far away, and who both telecommute to the Boston area! They didn’t plan it that way, but that’s how it worked out (they love where they live). This would have seemed crazy not too long ago; now it’s just a bit humorous but quite workable.

    I do have friends who work at companies that are so spread out that they don’t even have a headqarters. And that saves on rent, which can be quite a large fraction of the expenses of a small software company.

  • http://www.execimpactgroup.com Mike Ryan

    Wade,

    Bravo!

    Your assessment seems to validate what I have been increasing experienced during the past decade in regard to “location, location, location” rivalries and “bragging rights” between the tradition innovatative tech centers in the U.S.

    Although I am physically located in San Francisco and see the initial value and true manifestation of the “Cluster Theory” where the entrepreneur talents, technically educated skill sets and capital come together to form an ideal environment for startups and innovations. I have witness a transformation from that model taking place as well with less reliance on the physical location of the professional, support and technical talent pool especially in regard to technology, Saas, Cloud and software companies. I have been involved with the startup of 150+ companies during the past 30 years and have seen firsthand the growth of the virtual company that maybe headquartered in Silicon Valley or Alley, Boston, Seattle but relies on a resource team world wide in Israel, China, India or Des Moines, Iowa.

    I serve on boards in US, Australia, India and China and notice the acceleration of the vitual company fuelled by innovations in communications during the past 5 years linking the global quickly, effectively and cheaply. Yesterday, I had video call with the Founder of a Melbourne tech company that now has presence in mid America and its “location” is indeed “everywhere”. It really doesn’t matter where you are BUT what you can deliver to your customers regardless of your zip code.

    Take care,

    Mike Ryan

    wwww.twitter.com/HealthcareGuru

  • Randy

    Telecommuting works. In the past, much of being in a co-located office was about face time. In other words, politicking.

    Today, a team of independent, self-motivated individuals can achieve the same, working out of the home whether they’re in the Boston metro or out in the Canadian Rockies.

    The main problem is that the average company doesn’t invest enough in tele-conferencing/bandwidth enhancements and thus, many people feel the need to be co-located.

  • Terry

    You wrote: “Boston vs. New York vs. Silicon Valley is a fruitless debate rooted in fossilized provincialism of the same sort that drives the great sports rivalries.”

    I disagree, because there is a serious topic to discuss about: http://www.netvalley.com/silicon_valley/Legal_Bridge_From_El_Dorado_to_Silicon_Valley.html