How to Succeed for Tech Entrepreneurs: Stroll Down University Avenue?
October 7th, 2007 (7:32am) Anne Zelenka 12 Comments
Do tech startups achieve a clear advantage by locating themselves in a tech hub like Palo Alto, Boston, or (my personal favorite) Boulder? Many old-school investors think so. But physical proximity is becoming less and less important as online social tools bring casual chance encounters and rich human interaction to wherever you work.
Paul Graham argues that tech hubs like Silicon Valley still matter even when the business of tech startups is undergoing radical change. He thinks physical proximity gives a tech startup a necessary edge:
I’ve thought a lot about this question, and it seems to me that the increasing cheapness of web startups will if anything increase the importance of startup hubs. The value of startup hubs, like centers for any kind of business, lies in something very old-fashioned: face to face meetings. No technology in the immediate future will replace walking down University Ave and running into a friend who tells you how to fix a bug that’s been bothering you all weekend, or visiting a friend’s startup down the street and ending up in a conversation with one of their investors.
But social web tools do in fact make such casual and chance encounters possible. You can find the resolution to a bug on Twitter. You can “run into” an investor on a blog.
And chances are good that the person who knows how to solve your bug is not walking down University Avenue. He may be sitting in Bangalore or Budapest or Berlin. The investor who might give you advice or funds? She meets with your friend’s company over the phone, because she’s at a conference in Seattle or Sydney or Salzburg. You’ll have better luck connecting with them online.
Are face to face meetings better? They do have value in creating trust and rapport and they’re what many people are used to. As our tools and our practices and our attitudes change, however, you’ll see more people choosing online alternatives for their convenience, reach, and feasibility. The more people choose the online alternatives, the less it will make sense to count on geographic coincidence rather than hyperconnectedness.
How can you learn to use these new-fangled tools and techniques to make hyperconnected online work and startups successful, while you live where you want? Why, by reading Web Worker Daily of course. For entrepreneurial advice, check out our sister site FoundRead.
12 Comments Post your own comment
Adam Green says: October 7th, 2007 8:08am
Sorry, Anne. I’ve met many interesting people on Twitter, but I can’t have lunch with them like I can on University Ave, and just happen to meet their friends as they walk by. Hanging out in the real world can’t be replaced by virtual mediums. The best investment my company has made is getting an apartment in Palo Alto, and my living out here half time. I recommend it to all tech entrepreneurs. Yes, technology can help people located elsewhere, but living in Mecca is still a huge advantage. You don’t have to move the team here, but one of the founders of any startup should find a way to spend a lot of time here. Of course, tools like Twitter are a big help too, but not a serious substitute.
Anne Zelenka says: October 7th, 2007 8:24am
There’s still a generation that’s thinking that way and still a set of startups and investors working under those assumptions. There still may be a critical mass in Palo Alto right now — but will that last forever? The new way is a paradigm shift — and can’t necessarily be understood or effectively practiced if you’ve been living your whole entrepreneurial life under the old assumptions. It’s a generational thing.
And how do you know, anyway, that your investment in an apartment in Palo Alto will do better for you than what you could have done virtually if you gave it the same attention? You aren’t exactly the heaviest user of social tools online! ;)
Audrey Eschright says: October 7th, 2007 11:29am
I’m finding that it’s really a mix of online and offline connections that I’m working with. I just started a job with no central office; everyone works from home, and we’re in three different time zones. But I never would have lined this up if I hadn’t met one of the developers through a local programming group. Physical proximity sometimes introduces me to people I wouldn’t meet otherwise, and online interactions can do the same for entirely different reasons. I’m fascinated to watch how this plays out.
Ricardo Proença says: October 7th, 2007 12:34pm
I will say the same thing that I said when Om did a piece in GigaOM called “In Innovation, location is something”.
“As a geographer and now doing a Masters on Science, Technology and Innovation, this topic of “When it comes to innovation, geography is destiny!” resonates in me every time.
The fact is that we need to see this in the long term perspective. In this sense, the economic preeminence of a certain location (city, region or country) is clearly shrinking in terms of time.
Sure Silicon Valley (SV) has a distinctive advantage, but that advantage is not technological as some people might argue, it is mostly cultural - i.e. the culture of risk and the venture capital industry, which dynamically reinforce each other. That translates into something Om pointed in relation to what Vinnie Mirchandani said “commercializing innovations is where the big pay back is”.
And even this distinctive advantage is being emulated by other places, and Om you hit the spot when you highlighted the case of Nokia.
No one thought that a country with no record on scoring innovations would become the birthplace of the companies that massified cellphones or VOIP.
One of the best books that describe this new paradigm shift is “From Global to Metanational: How Companies Win in the Knowledge Economy” from a trio of INSEAD professors
What we can draw from the book is that the economy is now both global and knowledge-based, and that the knowledge needed for a company to succeed is not anymore seeded in one place, but it is scattered through the world.
Albeit you can say that with ICT you or your company don’t need to migrate your operations to these locations, think again because the most valuable knowledge are sophisticated, hard to learn and hard to move - what you need is co-location.
Forget all that fanfare about “The World is Flat” and all that fuss about the death of geography. Understand this: geography is not distance!
One of the most important “bricks” of the this global knowledge-based economy are the highly skilled professionals that travel around SV and the other innovation hubs around the world.
The first person to saw the importance of this people was Annalee Saxenian (professor at Berkeley), especially in the form of immigrant entrepreneurs that helped forge some hubs like Bangalore (India) or Hsinchu (Taiwan)
Their role on accelerating development of countries, regions and cities is so evident that even the World Bank created a initiative called “Diasporas of Highly Skilled and Migration of Talent”.
More than a brain drain movement towards SV or its demise because of entrepreneurs’ return of to their home countries, the overall trend is what is called brain circulation - moving between hubs in face of opportunities in a daily, monthly and annually basis.
To sum, there will be a broadening of the innovation hubs, since the solutions marketed my companies will be made by knowledge produced in a growing number of different locations, transferring the economic preeminence of one location to a network of several locations.
Brad Maier says: October 7th, 2007 12:54pm
I think one of the most important differences between the tech hubs and rest of the country is the freedom of information and the press coverage. Sure social tools are important in the hubs but people not only connected with each other they are also well versed in what others are working on and what is happening around them (thanks to things like techcrunch).
In the rest of the country there is stuff happening everywhere and its difficult to get a handle on what’s going on. I’m surprised everyday when I find out about new startups here in the midwest that are doing things that would be mainstream news if they were located in the valley.
Now for the shameless plug… If people are interested in whats going on outside the coastal hubs, I just launched http://GeekHeartland.com to cover landlocked and non-hub technology and entrepreneurial activity. Check it out and subscribe to stay updated on the “rest of the tech world”.
Anne Zelenka says: October 7th, 2007 1:24pm
Audrey: maybe you’re right… a hybrid approach wins. I resist! I want all new!
Ricardo: “there will be a broadening of the innovation hubs, since the solutions marketed my companies will be made by knowledge produced in a growing number of different locations, transferring the economic preeminence of one location to a network of several locations.”
And maybe that’s an expression of how a hybrid looks. Thanks for the feedback.
James D Kirk says: October 7th, 2007 1:42pm
And don’t forget the “magic” of interpersonal interactions. I can use all of the tools: social communities, skype with video calling, instant messaging, etc (and I do) when I am working with my graphic design genius in L.A. (I am in AZ). And we “get the job done”.
In the past however, when we were working for the same dotcom (iwin.com) and had our desk chairs back to back, there was the creation of an energy of synergy. When one of us could simply look over the shoulder at the other guy’s screen, or roll backwards bumping into him in order to grab all of his attention to focus on something or another, that was developing that environment that allowed for magical things to get created.
As much as I appreciate being able to work from home, not having to travel daily to an office, etc., I do miss not having those direct contact interactions. I don’t believe there will ever be a technology created that will replace this. But then, that’s just me!
Anne Zelenka says: October 7th, 2007 2:02pm
@James: I miss the in-person interactions too, although I do find that IM+email+phone calls+Twitter does pretty well at keeping me in touch and in sync with people I work with. Plus many of the people I worked with in person in the past didn’t give me any sort of jolt of energy… a lot of the energy I get now is from people distributed around the U.S. and in a couple other countries too. They’re not all in one hub that I could move to, even if I were willing to give up my excellent quality of life in Denver.
Tom says: October 7th, 2007 5:23pm
I believe it is naive to think that electronic communication will altogether replace face-to-face communication. There are intangibles of face-to-face interactions that cannot be conveyed via technology. What little study of communication theory I’ve had suggests to me that technology will never replace the richness of face-to-face communication. I do see that the generation just after me (I’m on the edge of X and Y) do have, at least for now, a preference for online communications, but I believe there are physiological, psychological, and ’soul level’ (unquantifiable) aspects of face-to-face that X and Yer’s miss out on. In many ways our interpersonal relationships are so dysfunctional (fewer and fewer have had real, deep, committed relationships) that we don’t even know what we are missing by staying online all the time.
Judi Sohn says: October 7th, 2007 6:43pm
I don’t think any of us are saying that online communication is the same as, or better than, face-to-face in every single situation. It’s not a black & white, all-or-nothing idea.
Online-only business relationships can and do work, now more than ever. Energy is energy…people can drain you, just as easily as they inspire.
Face-to-face is another layer of communication that is either feasible or it’s not. It doesn’t have to be a given. And the lack of face-to-face doesn’t have to mean failure.
How to Succeed for Tech Entrepreneurs: Stroll Down University Avenue? | Get1t.com says: October 7th, 2007 7:40pm
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Sky’s Blog @ The Dalai Lama Foundation says: October 21st, 2007 2:04pm
How much does proximity count?
One of the blogs I track that makes me think a bit is Web Worker Daily. In a post How to succeed for tech entrepreneurs - stroll down University Avenue? the question is raised of whether it’s useful for an entrepreneur to have a presence in a hig…