Hi. I’d like to take a moment to talk about technology entrepreneurship.
First, the context
A few days ago, Brian Sierakowski published an exit interview with Baltimore entrepreneur Paul Capestany. Paul (who, alas, I don’t personally know) is a smart fellow who recently decided to leave Baltimore to pursue his entrepreneurial dreams in San Francisco.
I’m grateful to both Paul and Brian for taking the time to do that interview. I think all of us in Baltimore periodically struggle with the question of why we’re here. It’s nothing but healthy for the growing Baltimore tech community to understand why some people feel the world beyond offers greener pastures.
This morning, as part of the conversation, my friend Mike Subelsky published his own take on the question: “Should we all move to Silicon Valley?”
Now, why I’m adding my two cents
After I read Mike’s post, I checked out the comments down at the bottom.
Down there in the comments, a person by the name of “bhalliburton” shared the following thoughts:
1) There is a difference between a small business start-up and a scalable start-up. (Stephen Blank terminology)
A scalable start-up has to target markets > $500m in size because it intends to become a >$100m revenue company in a few years time.
You can start a small business start-up (a business that feeds your family by serving a known customer with a known product) anywhere – it probably pays to start it in a geography where your customers are.
A scalable start-up needs to be in a place that maximizes your access to highly specialized talent and a place that makes you appealing in an acquisition.
I think the ecosystem for scalable start-ups in SF is simply extraordinary [...]
I don’t actually disagree with the core point of this comment. I think it’s framed in a rather patronizing way, but I don’t disagree that this specific kind of “scalable” start-up is probably going to have some kind of advantage in San Francisco.
Meanwhile, the context in which this advice is framed, patronizing as it is, is not unusual. I’m learning to ignore this attitude, because we clearly share different motivations, and that’s okay.
But.
After some solid arguments on the advantages of San Francisco for “scalable” start-ups, we arrive at the conclusion, which is simply this:
SF is the best place to start a tech company.
And on this point, I’m motivated to reply. ‘Cause that just ain’t true.
“If you want to be an actor, ya gotta be in Hollywood!”
Mike shared with me an early draft of his post, and it included this quote, which he had heard from another Baltimorean who chose to move west to Silicon Valley.
This quote, to me, pretty well summarizes the attitude that “the best place to start a tech company” is in San Francisco.
This quote also, as it turns out, epitomizes everything I’m trying to avoid in my artistic and entrepreneurial life.
The implication of that quote is there is only one kind of actor: Hollywood megastars, or people who aspire to be Hollywood megastars. It implicitly dismisses all other actors. They don’t even qualify for the name.
There will be (a few) Hollywood stars, and if you want to spend your life pursuing your 0.0000001% chance of being one, you’re probably ever-so-slightly statistically better off moving to Hollywood.
That’s not invalid, but jeebus, how stifling! Are we seriously idolizing a vision in which all actors live in Hollywood? That’s the path to success?
I think San Francisco is probably the Hollywood of certain kinds of tech companies.
And I think Figure 53 is almost certainly better off in Baltimore.
Moreover, I think it’s irresponsible to argue that one city in all the world is the place you should move to start a tech company.
bhalliburton implies that my vision of a tech company is cute but not worth the time of serious entrepreneurs.
I get really tired of that. 37signals gets really tired of that. Other awesome tech companies who are changing the world and making good money doing it, I would venture to guess, get really tired of that too.
If startup culture means fostering crowds of high-aiming, high-risk tech companies that absorb lots of money but rarely succeed, making Baltimore a hub for startup companies isn’t that interesting to me. The drive to cash out leaves me cold. I don’t know exactly what a Baltimore-specific tech culture could look like, but I’m totally okay if it doesn’t look like that.
I’m also totally okay if that’s the culture that some people love. That’s cool! I think those kinds of companies are important!
But let’s not needlessly count out a diversity of creative activity. There’s a lot of ways to succeed. Let’s celebrate, and pursue, all of them.
4 Comments
Hi Chris,
I don’t think the Hollywood Actor metaphor works here either. Starting a company isn’t ‘acting’ its like ‘producing a Movie’. Perhaps a better saying that you might resonate with is ‘Making movies is easier on Hollywood than it is anywhere else.” That is because so many movies are made in Hollywood that a support community has sprung up around it. Lawyers who understand movie contracts, suppliers and fabricators who know the most efficient way to construct sets, recording studios for mixing sound, effects labs who can add visual excitement, etc.
The same is true in the SF Bay area (or Silicon Valley if you prefer) there are litterally hundreds of companies that do nothing but support the existence of startups. And because they exist, creating a startup, especially a tech or biotech one, is easier there than it is anywhere else. If engineers want to work in a startup they could move to the Bay Area (there are many jobs available), if you want to create a new startup there are engineers available to help make it go, people who will back it with cash, lawyers who will protect it with contracts, and landlords who understand what the property requirements will be.
It is sometimes remarkable to me how small tech startups are put together like movies. A holding company, attempts to secure the right talent ahead of time, a production schedule, and then a big release complete with reviews, parties, and prognostications. I suspect that its California ‘culture’ to some extent.
–Chuck
Hi Chuck,
Thanks for the additional thoughts.
Still, you’re assuming I want to make the kind of company you’re describing.
If I wanted to make a blockbuster movie, I agree, I should move to Hollywood. But that’s not what I’m trying to do.
Meanwhile, for the kind of thing I *do* want to make, my costs are lower and my competition is less in Baltimore. To start my company, I didn’t need anything you listed. I didn’t need a lawyer, I didn’t need engineers, I didn’t need a designer, I didn’t need a production schedule, I didn’t need office space, I didn’t need advertising, and I didn’t need any extra money.
Again, I’m not saying it’s bad when companies do need those things to start, I’m just saying mine didn’t need them. So to start my company, I’m pretty sure that inexpensive Baltimore was a good place to be.
Now that my company is growing, and I do need some of those things, I’m having no trouble finding them. I have lawyers who specialize in software companies, and access to amazing local designers & superb local engineers. I don’t need dozens of them, and the ones I need are not getting bombarded by offers from a thousand companies that can pay three times what I can afford. There is also cheap (but still awesome) office space.
I’m not trying to establish a large company overnight. I’m trying to establish a small or medium-sized company over the long term. The challenges in doing that are different from the challenges for a “scalable startup”. Cities outside of San Francisco can offer some advantages for those kinds of companies.
I HIGHLY agree with you chris.Everything you said was spot on.
I think you’re dead on accurate there is a lot of appeal in starting up a tech company away from Silicon Valley. Although there is an overabundance of lawyers and investors and even really talented programmers the cost of doing business next door to Google, Sun, etc. is higher and the need for the lawyers and investors is greater.
Just as actors can act in front of an audience in a barn or even an open field Programers can program where there’s electricity and bring their product to market online even if they have to drive down the mountain to get to internet access. They might even program better under those conditions. If they can reach their customer base the software works the same way whether it was written in Billings, Montana or Seattle, Washington, on Oahu or anchored out in the Florida Keys
People measure success in different ways, to assume cash is king demeans human effort and dignity. If you provide a service or product monetizing it is important in that money will allow you to continue to do the work that you do. But after a point managing transactions will stop you or slow you down from doing the thing that rocks your boat. The product suffers and service falters if you don’t make the transition.
The long and short of it is that if you succeed too well in an area that sidetracks you from your goals you can either shift goals or stay true to your intentions.
I vote for staying true.
another Chris