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0 pointsstouset9y ago0 comments

> Increasingly, the choice not to locate your company in SF is a sign of competitive intelligence.

Sorry, but this is flawed logic.

Tech, more than seemingly any other industry I can think of, has a winner-takes-all model of success. Given this, starting a tech company anywhere other than where the overwhelming majority of the most capable employees live is virtually suicide. And this seems to pan out in the data as well — Twitter, Square, Uber, Google, Facebook, Reddit, AirBnB, Apple, Oracle, Box, Palantir, Pinterest, Lyft, Stripe, CloudFlare… not that these are all of tech, but finding even a fraction of these anywhere (other than perhaps New York) is a stretch.

Given that, it's patently worth it to pay the extra cost per employee, when the relative value of each employee to the company ends up being so high compared to other industries.

This is not to say you can't build a strong tech company in other parts of the US, but you're stacking the odds against you by doing so.

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thedufer9y ago

Surely the fact that a huge portion of startups start in SF could account for the fact that a huge portion of winners came from SF? You're also biased because you're paying more attention to startups in SF - the Bay area doesn't even come up with half of the big startups, and yet you failed to name a single one from anywhere else.

A quick scan of Fortune's unicorn list* shows 12 out of the top 25 are from outside of California, and two of the Cali ones are LA, bringing SF down to 11 (after generously counting Palo Alto in SF, because I assume you meant the Bay Area). Without numbers on how many startups are started in various places, I'm not sure what these numbers mean, but it doesn't obviously favor your winner-takes-all argument.

* http://fortune.com/unicorns/

stousetOP9y ago

Of the top 25, only two American companies are not in the Bay Area, and one of those is still in California.

For an area with less than 2% of the country's population, that is overwhelmingly dominant. I'm not sure if you could have underscored my point any more succinctly.

thedufer9y ago

Somehow you've managed to miscount the numbers, misrepresent your wrong numbers, and miss the point all at once.

The point is that you still have contributed no idea of what portion of startups are starting in SF. If 95% of startups come out of SF but only 80% of winners do, it still has an overwhelming majority but is by the numbers a terrible place to start a startup.

Of the top 25 international, only about half are American, so stop pretending the denominator is 25 if you've decided that international companies for some reason don't count. There are 2 in LA, one in Boston, and 1 in NYC (what list are you looking at?), giving the Bay Area something like 2/3 of American companies, and about 1/3 of all.

kyllo9y ago

You missed the point, parent commenter is saying that communication technology should enable you to build a successful tech company with a geographically distributed team.

stousetOP9y ago

Parent commenter claimed that "the choice not to locate your company in SF is a sign of competitive intelligence". I argued against that, and in my opinion the available data appears to back me up on this.

Communication technology hasn't so far enabled, at least in the general case, geographically-distributed tech companies – otherwise we would be seeing an increasing trend of successful tech companies headquartered elsewhere. I don't think we are. Put another way, whatever advantage is conferred upon SF by physically housing an outsized share of tech workers is clearly giving it a competitive advantage that other locations have yet to overcome.

kyllo9y ago

Yeah, my personal theory on this is that the short to medium term success of tech startups is mostly based on factors and advantages other than product quality and technical excellence.

Having a distributed tech team is not hard, but most startups aren't distributed because the VCs aren't distributed. They want face to face meetings.

j / k navigate · click thread line to collapse

0 pointsstouset9y ago0 comments

> Increasingly, the choice not to locate your company in SF is a sign of competitive intelligence.

Sorry, but this is flawed logic.

Given that, it's patently worth it to pay the extra cost per employee, when the relative value of each employee to the company ends up being so high compared to other industries.

This is not to say you can't build a strong tech company in other parts of the US, but you're stacking the odds against you by doing so.

0 comments

thedufer9y ago

* http://fortune.com/unicorns/

stousetOP9y ago

Of the top 25, only two American companies are not in the Bay Area, and one of those is still in California.

For an area with less than 2% of the country's population, that is overwhelmingly dominant. I'm not sure if you could have underscored my point any more succinctly.

thedufer9y ago

Somehow you've managed to miscount the numbers, misrepresent your wrong numbers, and miss the point all at once.

kyllo9y ago

You missed the point, parent commenter is saying that communication technology should enable you to build a successful tech company with a geographically distributed team.

stousetOP9y ago

kyllo9y ago

Yeah, my personal theory on this is that the short to medium term success of tech startups is mostly based on factors and advantages other than product quality and technical excellence.

Having a distributed tech team is not hard, but most startups aren't distributed because the VCs aren't distributed. They want face to face meetings.

j / k navigate · click thread line to collapse