When I started my current job, I was seeking refuge from my failed bootstrapped startup. We had a product, we had customers, but we didn’t have growth. (In theory, that is ok for a bootstrapped startup! The full story involves a slew of other major mistakes on my part, but that’s for another day.)
I’ve mentioned previously that it was my first “Silicon Valley” job, and I distinctly remember that when any of my new colleagues heard about my reason for joining they would invariably say something like “wow, if that happened here you would just go find an investor and keep going.” Now, I don’t think that’s entirely true: the difference between life and death for a startup, certainly in the long run, will probably not be due to location alone. Nevertheless, there’s obviously something special about startups in Silicon Valley, and previous attempts to replicate that ecosystem elsewhere have been unsuccessful.
COVID has accelerated the de-centralization of technology companies, with Facebook and Google both announcing that they will support fully remote workers for at least the next year, and with younger startups following suit or even terminating their office leases entirely. The broader ecosystem has also been forced to follow suit, with the Sand Hill types taking meetings over Zoom.
In theory, all of this should mean that Silicon Valley as a concept can be more rapidly de-coupled from geography, but in practice it’s an uphill climb. For instance, the young computer programmer in Omaha will still have a much harder time getting a job at Facebook than the young computer programmer in Oakland. The startup founder in Pittsburgh will still have a much harder time getting in front of a VC than the startup founder in SoMa. I think the reasons for this are twofold:
- Personal networks are still tightly coupled to geography, and (at least on the margins) SV’s “meritocracy” is heavily dependent on personal networks. The young computer programmer in Oakland is more likely to know someone at Facebook–even tangentially–than the one in Omaha.
- Cognitive bias is hard to overcome. For example, even though investors are heavily incentivized to be good at picking outliers, the urge to “pattern-match” against previous successful founders is high, and the founder from Pittsburgh might not match the pattern.
I don’t know what will change this. If the rest of the world continues adjusting daily life to function despite COVID while the US continues its perilous descent into madness, that might contribute to an even more de-centralized Silicon Valley. Or maybe there will be a new kind of revolution.