Anatomy of a Startup Hub

Lots of people have written about the benefits or disadvantages about doing a startup in x place compared to y place. I frankly don’t think it matters as much as people seem to think it does based on the number of articles written about it. I’m not about to add to that list.

What I have been thinking about is what makes some places more active than others?

Education

There needs to be a top-tier engineering school nearby to draw from. San Francisco has Berkeley and Stanford, Seattle has UW, Boston has MIT and Harvard, etc. This is important not only because they’re producing great people but also because these school are able to pull some of the brightest kids from other parts of the country and hopefully they stay afterwards.

Prior Successful Companies

I’m talking extremely successful, Microsoft, Google, Amazon kind of successful. They draw the best and the brightest from around the country, give them valuable experience, meet one another and become exceedingly rich in the process. This is especially true in the early days of these companies and significantly less so in the later on. I don’t the numbers but I’m willing to bet that a disproportionate amount of startup founders either met or worked at these types of companies there during the early days. They’re uniquely positioned to start new companies, relevant experience and the capital necessary to minimize the risk. Success breeds more success. It also gives rise to a investor community although this might be less important now as investors often look beyond their surrounding areas for promising startups. Although Seattle is typically thought of as a startup hub, given that we do pretty well in the above criteria, I wonder why there isn’t more activity?

Proximity to Success

It’s exceedingly rare to socially meet someone or even hear second hand about someone who started a successful startup. There is always the argument that I’m not in the right social circles but I digress. Actually I’ve been hearing a lot more about my friends being interested in startups but that’s for another day. My cousin has his own startup in SF and I get the feeling that success is around him. He texts me about some guy he knew that just sold his company for x million dollars and complains that we need to work harder or be more lucky depending on the day. As trivial as that might sound I think it motivates people.

Mentoring

We were lucky enough to work with Oren when we started (we were also dumb enough not to take his advice). Brian and I used to spend time going to startup events around Seattle but never felt like we were getting much out of them. I’ve talked to other people who felt similarly. The people that can be really valuable mentors typically don’t have the time. The problem is compounded by the fact that most people aren’t willing to do what it takes, I mean really work. It takes a lot of energy to screen people so they typically don’t bother. It’s tough when you start out. You need to earn your stripes (ie. fail) first.

Microsoft and Amazon Startups

Maybe I’m ill-informed but I always expected more startups to have come out of employees from the early Microsoft and Amazon days. I do hear more about the latter than the former. Microsoft is one of the most, if not the most, successful technology company ever. What did the early employees at Microsoft do after they left? Again maybe I’m ill-informed here.