Two points riffing off Paul Graham’s Why to Move to a Startup Hub (alternate titles: Why to Move to the Startup Hub or Why to Move to Silicon Valley). Probably more obvious, but it’s a theme of this blog:
Immigration difficulties might be another reason to stay put. Dealing with immigration problems is like raising money: for some reason it seems to consume all your attention. A startup can’t afford much of that. One Canadian startup we funded spent about 6 months working on moving to the US. Eventually they just gave up, because they couldn’t afford to take so much time away from working on their software.
(If another country wanted to establish a rival to Silicon Valley, the single best thing they could do might be to create a special visa for startup founders. US immigration policy is one of Silicon Valley’s biggest weaknesses.)
I suspect a jurisdiction would have to include far more than just startup founders in such a program to have any noticeable impact. But it’s not a bad sentiment. Even on purely nationalistic grounds, any jurisdiction (and especially large ones like China, India, Brazil, and Russia) ought to allow unlimited skilled immigration, preferably permanent, including citizenship.
Graham also points out the importance of specialized knowledge, emphasis added:
Boston investors will admit they’re more conservative. Some want to believe this comes from the city’s prudent Yankee character. But Occam’s razor suggests the truth is less flattering. Boston investors are probably more conservative than Silicon Valley investors for the same reason Chicago investors are more conservative than Boston ones. They don’t understand startups as well.
West coast investors aren’t bolder because they’re irresponsible cowboys, or because the good weather makes them optimistic. They’re bolder because they know what they’re doing. They’re the skiers who ski on the diamond slopes. Boldness is the essence of venture investing. The way you get big returns is not by trying to avoid losses, but by trying to ensure you get some of the big hits. And the big hits often look risky at first.
I’ve been meaning to do a post on the below for awhile but don’t have a whole lot to say, so I’ll use this tangent: New business practices and models have a whole lot going against them, even if superior to existing practices in theory — nobody has experience making them work. I suspect this applies to peer production in spades. Building up a critical mass of knowledge about how open source works has been slow going and still has a long way to go, and I’m fond of speculating that open content/free culture is a decade or two behind free software. Prediction markets are obviously in the same boat, and futarchy is far out to sea.
And so is every useful business, social, political, or other change (but keep in mind that some things don’t work, even in theory).
By the way, a startup considering a move to Silicon Valley should make the decision with the aid of prediction markets.