I got two questions that I'll address in one post. Geo asked:
(Funny that this was posed by "Geo," don't you think?) And Mark Waterstraat said:
I moved to California in May of 1997—just over 10 years ago. (Wow, a decade already?) I actually didn't land in Silicon Valley proper, but on the Northern tip of the Bay Area, in a small town called Sebastopol. When viewed from Nebraska, Sebastopol looks like its in exactly the same spot as San Francisco, while in actuality its about an hour away and feels like a very different place.
However, there was one (and only one) reason to be in Sebastopol if you're in the Internet industry, which is that its the headquarters of O'Reilly. I got a job at O'Reilly as a marketing coordinator for their software group as a way to get me to California. I was 25. I had no degree or significant tangible skills. (I could "code" HTML, ColdFusion, VB...and write marketing copy.) I had spent the last few years trying to get my own Internet company going in Nebraska, which was a painful (but educational) mess.
Also, my girlfriend at the time had moved to San Francisco about six months earlier. While a motivating factor for my move at first, it was more or less over by the time I got here, so it really didn't matter.
I got a salary of $48,500 from O'Reilly, which seemed pretty damn lucrative. (I'd never had a salary before.) However, I had over $10k in credit-card debt, plus student loans, so I was barely paying my new California-style rent at that rate.
I was lucky O'Reilly took a chance on me, especially because I wasn't particularly good at the job. But after trying to manage people (badly) for a few years and build software in my own company, it was great (and long overdue) for me to see how people who knew what they were doing worked. Even a simple thing like running a meeting was something I'd never really seen done.
I managed to have a few conversations with Tim and other O'Reilly luminaries while I was hanging out there, which was a thrill after being in the sticks for so long. But I soon grew frustrated working for others and quit after just seven months. Though my plan was to, again, try and start my own company, I still needed money (badly) so the day after my last day as marketing coordinator I returned to O'Reilly as a contract intranet developer. That paid twice as much, was much more independent, and I was actually creating something. So it was a step in the right direction.
Blah, blah, blah...eventually we started Pyra, and O'Reilly was our lead investor and, later, key in making the Google deal happen. So, it was very fortuitous I landed there, even though the job itself didn't go great.
So what's the conclusion? First, Marc is completely right. In my case, anyway, Silicon Valley (or thereabouts) was exactly where I needed to be. The fact that I tried to start an Internet company in Nebraska for three years before coming out set me back at least three years—three formative years, no less, for the Internet (and for me). There was no reason, at 22, with a sense the Internet was going to be big, not to get my ass out here and get whatever job I could until I knew enough to go on my own. By staying in Nebraska, I relegated myself to spectator, even though I was trying to be a participant.
But why is that, exactly? I'm not saying its universal. It had a lot to do with maturity—both I and the Internet industry lacked it. I didn't know what I was doing, and there was no one around for me to learn from. Most of the people doing what I wanted to do were in the Valley. So, while I learned lots of valuable lessons going the route I did, it took me way longer to figure things out than if I'd just come out and soaked in it.
In general, I think Marc's advice applies—as Mark points out—in this type of scenario, where you're young and want to be big in your field: Go to where the action is. And if you're in the Internet, that's Silicon Valley. There are more opportunities, companies, like-minded/impressive folks, and knowledge to be gained through osmosis here than anywhere else.
On the other hand, I don't think (the other) Mark is wrong that it's possible to build a successful Internet company in Omaha. It's more possible today than ever, partially because the industry has matured. There are more people everywhere who know how to build things on the web. Also, some of the promises of the Internet have come true, such as the accessibility of knowledge and people no matter where you are. There's a vast amount of valuable information about how to start and build companies that's available for free on the web, which just was not there 10 years ago.
It depends on what type of company you're trying to build, of course. Some of the companies I admire most—skinnyCorp (the Threadless people), Panic, 37 Signals, and FogCreek come to mind—are not based on Silicon Valley and, I suspect, would be less interesting if they were. The Silicon Valley mindset is very much about getting big and/or cashing out (or crashing and burning). If that's not you're goal, you may find it easier in a culture where you're not working against the expectations of most investors and employees.
Secondly, competition for talent is fierce, especially technical talent. One strategy many Valley-based companies are employing is either bringing people in from other parts of the country (or world) or going virtual/distributed. If you're located in a place with a big enough pool of talent and you can create the hottest place in town to work, you may be way ahead of the game. And, if not, you can go distributed, just like some companies are here anyway (at least at first).
Lastly, as a colleague put it to me earlier this evening, "There's a lot of bullshit in the Valley." When times are good, such as now, there's even more bullshit, and it can be highly distracting. There's also more than a bit of an echo chamber, and a lot of people are doing things to impress each other. If you're outside this chamber, it may be easier to see beyond the TechCrunch market and create something that the real world cares about.
So, no, I don't think I'll be moving back to Nebraska to start a company. But at this point, that's, firstly, a lifestyle choice. I love it here. Just being around the creative energy, the action, and the ambitious, smart people is reason enough for me, business advantages aside. If you're young and hungry and want to learn as much as possible about the industry, I'd encourage you to come out. (There's lots of startups hiring!) But if you're married to where you are and want to start something outside Silicon Valley, I say go for it. Use your location to your advantage by sucking up great local talent and thinking differently than everyone out here.
Thanks for the questions! Still sorting through them, but keep 'em coming...
What sparked you to move from mid-america to the Bay Area?
(Funny that this was posed by "Geo," don't you think?) And Mark Waterstraat said:
I'd like to expand on Geo's question. We're currently building a SaaS company in Omaha. Andreessen says if you want to do technology in the US, you need to be in the Valley. I've challenged this in a post....and I'd love to know what you think. Would you ever come back to NE and start a new company here?
I moved to California in May of 1997—just over 10 years ago. (Wow, a decade already?) I actually didn't land in Silicon Valley proper, but on the Northern tip of the Bay Area, in a small town called Sebastopol. When viewed from Nebraska, Sebastopol looks like its in exactly the same spot as San Francisco, while in actuality its about an hour away and feels like a very different place.
However, there was one (and only one) reason to be in Sebastopol if you're in the Internet industry, which is that its the headquarters of O'Reilly. I got a job at O'Reilly as a marketing coordinator for their software group as a way to get me to California. I was 25. I had no degree or significant tangible skills. (I could "code" HTML, ColdFusion, VB...and write marketing copy.) I had spent the last few years trying to get my own Internet company going in Nebraska, which was a painful (but educational) mess.
Also, my girlfriend at the time had moved to San Francisco about six months earlier. While a motivating factor for my move at first, it was more or less over by the time I got here, so it really didn't matter.
I got a salary of $48,500 from O'Reilly, which seemed pretty damn lucrative. (I'd never had a salary before.) However, I had over $10k in credit-card debt, plus student loans, so I was barely paying my new California-style rent at that rate.
I was lucky O'Reilly took a chance on me, especially because I wasn't particularly good at the job. But after trying to manage people (badly) for a few years and build software in my own company, it was great (and long overdue) for me to see how people who knew what they were doing worked. Even a simple thing like running a meeting was something I'd never really seen done.
I managed to have a few conversations with Tim and other O'Reilly luminaries while I was hanging out there, which was a thrill after being in the sticks for so long. But I soon grew frustrated working for others and quit after just seven months. Though my plan was to, again, try and start my own company, I still needed money (badly) so the day after my last day as marketing coordinator I returned to O'Reilly as a contract intranet developer. That paid twice as much, was much more independent, and I was actually creating something. So it was a step in the right direction.
Blah, blah, blah...eventually we started Pyra, and O'Reilly was our lead investor and, later, key in making the Google deal happen. So, it was very fortuitous I landed there, even though the job itself didn't go great.
So what's the conclusion? First, Marc is completely right. In my case, anyway, Silicon Valley (or thereabouts) was exactly where I needed to be. The fact that I tried to start an Internet company in Nebraska for three years before coming out set me back at least three years—three formative years, no less, for the Internet (and for me). There was no reason, at 22, with a sense the Internet was going to be big, not to get my ass out here and get whatever job I could until I knew enough to go on my own. By staying in Nebraska, I relegated myself to spectator, even though I was trying to be a participant.
But why is that, exactly? I'm not saying its universal. It had a lot to do with maturity—both I and the Internet industry lacked it. I didn't know what I was doing, and there was no one around for me to learn from. Most of the people doing what I wanted to do were in the Valley. So, while I learned lots of valuable lessons going the route I did, it took me way longer to figure things out than if I'd just come out and soaked in it.
In general, I think Marc's advice applies—as Mark points out—in this type of scenario, where you're young and want to be big in your field: Go to where the action is. And if you're in the Internet, that's Silicon Valley. There are more opportunities, companies, like-minded/impressive folks, and knowledge to be gained through osmosis here than anywhere else.
On the other hand, I don't think (the other) Mark is wrong that it's possible to build a successful Internet company in Omaha. It's more possible today than ever, partially because the industry has matured. There are more people everywhere who know how to build things on the web. Also, some of the promises of the Internet have come true, such as the accessibility of knowledge and people no matter where you are. There's a vast amount of valuable information about how to start and build companies that's available for free on the web, which just was not there 10 years ago.
It depends on what type of company you're trying to build, of course. Some of the companies I admire most—skinnyCorp (the Threadless people), Panic, 37 Signals, and FogCreek come to mind—are not based on Silicon Valley and, I suspect, would be less interesting if they were. The Silicon Valley mindset is very much about getting big and/or cashing out (or crashing and burning). If that's not you're goal, you may find it easier in a culture where you're not working against the expectations of most investors and employees.
Secondly, competition for talent is fierce, especially technical talent. One strategy many Valley-based companies are employing is either bringing people in from other parts of the country (or world) or going virtual/distributed. If you're located in a place with a big enough pool of talent and you can create the hottest place in town to work, you may be way ahead of the game. And, if not, you can go distributed, just like some companies are here anyway (at least at first).
Lastly, as a colleague put it to me earlier this evening, "There's a lot of bullshit in the Valley." When times are good, such as now, there's even more bullshit, and it can be highly distracting. There's also more than a bit of an echo chamber, and a lot of people are doing things to impress each other. If you're outside this chamber, it may be easier to see beyond the TechCrunch market and create something that the real world cares about.
So, no, I don't think I'll be moving back to Nebraska to start a company. But at this point, that's, firstly, a lifestyle choice. I love it here. Just being around the creative energy, the action, and the ambitious, smart people is reason enough for me, business advantages aside. If you're young and hungry and want to learn as much as possible about the industry, I'd encourage you to come out. (There's lots of startups hiring!) But if you're married to where you are and want to start something outside Silicon Valley, I say go for it. Use your location to your advantage by sucking up great local talent and thinking differently than everyone out here.
Thanks for the questions! Still sorting through them, but keep 'em coming...