Friday, July 28, 2006

Where is the High Tech?

In response to Paul Graham's essay: How to Be Silicon Valley.

Paul Graham basically says it takes two things to make an area Silicon Valley, money, and nerds. He says money goes where good weather and cool people live, pointing to New York, Boston, and Silicon Valley. And geeks go where top comp sci schools are, again pointing to Silicon Valley and Boston. Plus geeks like to have good public transit, a great social life, and friendly people.

His whole premise is based around the world of Paul Graham. Paul Graham likes cities. Paul Graham lives in Boston. Paul Graham likes public transportation. He then kind of draws all his conclusions around that world. One of the first problems with his premise is that Boston is not a Silicon Valley. It seems to have a decent amount of tech jobs according to, but I don't know if I can think of a single big start up or tech company from Boston.

He notices a couple of big holes in his theory like LA and NYC, but quickly writes those off as "too mainstream". I don't know if i've ever heard a nerd reject a job because a city is too mainstream, and many nerds I know wish NYC was a better place for startups.

He seems to miss the obvious fact that Seattle is a tech center, not because of U of Washington or Seattle itself, but because of Microsoft. If Microsoft had stayed in Albequerque, I get the feeling New Mexico would be more of a tech hub. Paul Graham, and Joel Spolsky both assume most programmers want to live in a big city. That may be true with kids straight out of college, but what about older people or more introverted people? Can there be a startup in say, Burlington, VT or Madison, WI?

It seems to me the reason most tech hubs are where they are because of a large company's presence there. Microsoft goes to Seattle, gets big, and then groups of the original members form their own companies, that have their own sucess, who's members then create their own companies. AOL goes to northern Virginia, and original team members go on to form thier own Northern VA companies.

But does it matter where you start your business? In these days, where person-to-person contact is less necessary, I don't think so. I think the factors that do matter are time zone, and cost of living. These two things are the only factors that really effect a small IT business's bottom line. If you have a business based in Honolulu, you're recruiting efforts may bring in some great people, but the overhead to your business and the weird hours your support folks have to work may effect how well you do. Some of the other things Paul mentions are favorable tax codes. This would make Las Vegas or Delaware a prime place for IT startups, but that doesn't appear to be the case. In fact Massachusetts, California and Washington have some of the least friendly tax codes for small business.

Location may matter a little more once you start trying to recruit people. But then, it will matter what kind of people you are trying to recruit. Joel Spolsky seems to want only straight out of college programmers. Perhaps these are best suited to be trained in his business practices, are more likely to put in longer hours etc.. Young people generally like big cities and don't mind renting a 1-bedroom with 3 other people. But will those programmers stick around when they are 30? Or will they form their own companies in Connecticut? It would be interesting to me to see a company market their ruralness to lure in developers.


At 8:33 PM, Anonymous Anonymous said...

Note that the "big successful company spawns startups" phenomenon that you describe is exactly how Silicon Valley got started, with Fairchild as the seed.


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