It’s not just about Silicon Valley…

Startup guru Naval from Venture Hacks wrote a post recently on why you need to be in Silicon Valley. Now, I’m a big fan of Venture Hacks and think its required reading. But, I take exception to this notion that only in the valley can you build a great consumer internet startup.

The Valley does have huge advantages. It’s the mecca. But I think it’s dangerous to think that this is the only place that matters.

Naval raises some good points: consumer internet (I would say other sectors as well) is a winner takes all game. The capital is there and the startup culture is there. But, I absolutely disagree with the notion that the best people self select and move there. That’s just crap. I consider myself to be pretty good at what I do, and I ain’t moving any time soon.

Also, I don’t take it as a given that all the best engineers are there. MIT, University of Waterloo are 3 time zones away and crank out great people.

I am involved with several consumer internet startups now. On the goto market side, we could for sure access great talent in the Valley. People who have seen real scale. The flip side, is that this talent pool is constantly targeted by the latest and greatest opportunity. What is the turnover rate (rate at which staff leave and need to be replaced) in the Valley vs. other places? I know here in Canada, that once I find someone, I can likely keep him or her as long as I need to.

I fundamentally believe in the potential of the individual. Anyone can do whatever they set their mind to. Mike from Freshbooks is a great example (Sorry Mike…). He built websites before he started one of Canada’s great startup successes. He did not to goto the Valley and apprentice. Nothing in his education, background, network, etc suggested he was predisposed to do what he’s doing. He just did it. Now, Freshbooks is educating people on how to build great web startups.

Skype is just one of many great consumer internet stories that was in no way shape or form Valley-based.

If we accept Naval’s conclusion then it is a self-fulfilling prophecy that you will need to be in the Valley. Rome was once the centre of the World and we all know what happened there.

We live in a global World, and an increasingly virtually connected one. Talent, distribution, capital are global. The valley is absolutely at the centre of the action. But you do not “have to” be there to build a great company.

  • Awesome article, you made some fantastic points. The idea that we all need to move to SV in order to run a consumer business is not always true. Sure, it helps depending on the kind of business you want to run. I feel that if you want to run a mainstream consumer business, it can be done (and you probably have an advantage) elsewhere. Getting out of the echo-chamber and thinking that everyone uses Quora is a really good thing.

    Great examples with Skype and Freshbooks.