It's probably the most damning and valid critique of The Valley.
How many Twitters/Facebooks/Dropboxes/Airbnbs don't exist because the founders sold them for $15M in 18 months?
Sometimes it's because the founders aren't really passionate enough about what they're working on.
Other times it's just financially insane to say no. A great example is Mint.com. How do you tell Aaron Patzer not to sell, when he's going to make $40M personally? That's more than he might have made in an IPO after many years.
The world is better off when companies like Dropbox exist as large transformational forces of technology progress. If they all get strangled in their crib's progress slows.
Imagine if Yahoo hadn't flubbed the acquisition of Google? We'd all be worse off.
> If they all get strangled in their cribs progress slows.
A founder exiting with millions isn't strangling anything. They aren't working to change the world, they're working to make enough money to not have to. Those who want to change the world, like Zuck, wouldn't take the buyout offer because money wasn't the goal. Those who take the cash would have taken it whenever it was offered and left regardless, better to do it early and it's just wrong to say the company was strangled.
> Imagine if Yahoo hadn't flubbed the acquisition of Google?
You don't know that. For all you know, the combined money of Yahoo and talents of Google could have resulted in something better than what we ended up with. No one knows either way.
There's fairly good research (though the point is debatable) that most innovation, especially the kind that significantly shakes up industries, comes from smaller companies, not from large, established firms. If that's true, then it would also be reasonable to hypothesize that if large established firms are able to buy out upstart competitors extremely early, and pull them into the fold so to speak, there will be less overall innovation.
It's pretty hard to prove these sorts of things, since it's hard to set up solid experiments with good controls in economics, but there is some interesting research around the what-drives-innovation question, and it's not an unreasonable hypothesis, at least.
On some level, yes, but companies don't magic employees into existence. It doesn't matter too much if the Go language comes out of Dogpile or Pets.com instead of Google, does it?
I can definitely see that Google is more likely to foment transformation than a Yahoo, but I think it's a lot harder to say that we're better off with fewer acquisitions. It seems like the only good metric is number of good employees at good companies, and it doesn't matter much if it's Google or a company that decided not to get acquired by Google. (Although I don't think it'd be that great if Google were the only 'good company' in this hand wavy metric.)
It didn't seem to me that he was complaining about founders selling companies quickly so much as employees flitting from one to the other so fast.
In my experience, founders in the Valley are more likely to have the confidence to turn down acquisition offers than founders outside it. All the examples you list are Valley startups.
I also think he was reflecting on some of Steve Jobs' views. Jobs had repeatedly bemoaned the flip mentality and respected Zuck a lot for not selling. I got the feeling that made a big impression on him and has soured him a bit to a portion of SV culture.
He's absolutely correct about employees flitting from one to another quickly - that is a valley culture thing. Part of that is because there are so many opportunities in the valley - There are probably a hundred plus companies that I could reasonably expect to find gainful employment as an network infrastructure manager in the valley. It's also considered completely reasonable behavior to work at a company for 3-5 years, and then move onto the next one. It's not so much about employees being short sighted, it's about enhancing your experience base, contacts, and chances to find at least one company that does well in the stock market and bring some value to your options.
It's a catch-22 for technology companies - on the one hand, they have to work pretty hard (or offer a lot of money) to hold onto their employees past that five year mark. On the flip side, the reason they have to work so hard to do so, is because there are so many employees ready to change companies - including coming to work for theirs.
"It's also considered completely reasonable behavior to work at a company for 3-5 years, and then move onto the next one."
I believe this is the norm outside the Valley as well.
I'm trying to find a blog post about how, after 3 years at the same job, the challenge diminishes and it makes more sense to switch (if management doesn't recognize the need for growth).
His Q&A at Startup School was not so good as the rest of the speakers that were invited. The girl that was making the questions was not so good at it either. There was no consistency about what he wanted to say. Many times he lost his own trail of thought. Maybe you need such an article to extract some meaning out of everything he talked.
[EDIT] Well, someone doesn't like that I speak up my mind. So I can't make an opinion about this now without being downvoted?
I'm guessing the reason you are being downvoted is because "the girl" is Jessica Livingston, a partner at YC, who has earned a lot of respect here on HN.
I agree that Zuck seemed unprepared and rambled, frequently forgetting what he was talking about, but that's not something the host can control.
She also wrote Founders at Work, probably the best collection of interviews with tech founders around. We're going to need a little better critique than she "was not so good at it" to discredit her as an interviewer.
Well, once she saw Mark babble around a topic without a specific answer to her question, she should've:
a) rephrase the question
b) change the topic.
Instead, she continued asking the same question. For example: "What did you do right?". Come on, is she seriously trying to get a coherent answer out of Mark with that? Is there a SINGLE thing that Mark could've done right to build a successful worldwide product? It's like asking for a silver bullet for startups. There's none. And then she kept asking that question over and over again..
Also, typically "girl," like "boy," refers to a child. Ms. Livingston is obviously an adult, so to many people the term "girl" comes across as belittling.
Doesn't matter who she is. That was my impression from watching her interview Mark. I really don't care if she's one of the founders of YC, or just another woman. I'm talking about that interview.
One reason to live in the Valley is the opportunity to exercise outdoors in shorts and a t-shirt 365 days a year. That's why I want to move out there, anyway.
That's half of why I moved out here. The fact that this place is a programmer's mecca and I've wanted to live here since I was a kid was the other half.
I'm sure there's some psychological term for what long-time Chicagoans feel for the winter there... you'll find it amongst the chapters concerning victims who identify with their abusers. (I did my five years in Chicago and gtfo).
My last winter in Illinois there were two weeks where the high temperature never got up as high as -15ºF. Pants freeze to your legs, glasses ice over in seconds, even if you're sufficiently bundled your eyeballs can get frostbite.
People underestimate how much nicer the world is away from the Chicago-Boston-DC triangle.
Seems like the coldest high temperature in Chicago's recorded history was -11ºF
FWIW I've lived in both SF and Chicago and quite like Chicago's climate/seasons and really liked the city life much more than I did in SF (although the stuff a couple hours from SF is fantastic), and I'm not at all alone (I live in NY now)
I was in a small town downstate; the lake can actually moderate temperatures in Chicago proper. Downstate Illinois can have more Fargo or Minneapolis weather. Warms up faster in the spring, though.
I grew up in Wisconsin. We not only had snow days, but we had cold days, where the school wasn't allowed to hold class because they couldn't keep the building at least 50F / 10c. And then when you go to university, you have to walk around in that weather all the time. It was miserable.
When I moved to sf I used to snicker at the people you see wearing leather coats and scarves because it's 45F out. Now I do the same :( No winter for no summer is a great trade.
I'm from Canada so I know exactly what you mean. The one benefit of freezing winters is that you can get six solid months of productivity while locked inside.
Contrary, I find my productivity increases with warm weather given the freedom to move around with ease (walking to a coffeeshop or waiting for a train/bus). Not to mention health benefits of things like vitamin D.
When it's below freezing in Chicago, I wear a wool baselayer, a long-sleeve fleece-lined running shirt, and a very light windbreaker. When it's 45, I wear a t-shirt and shorts :)
I have one piece of advice: Just fucking do it. Seriously. The only reason I didn't leave Boston sooner is because I'd never been to California, and I assumed the weather sucked everywhere.
Silly Valley weather is mostly nice most of the year. I used to motorcycle all of the time (spent several years without a car). Off the bike, I wear sandals. Cow-orkers of mine were known for their invariant shorts-and-flipflops.
It got boring. Now I'm in Seattle and the weather is actually interesting. It rains a lot, and we have very occasional snowfall, but most of the time I can still motorcycle.
I'm not sure what this has to do with HN, except that outside of SF, Silly Valley weather is generally drama-free and leaves you more time for work. :)
I grew up around the seattle area and now I live in the Valley. I don't miss the weather. I really appreciate the weather here. It seems like a miracle to me that every day that I wake up I can go on my bike and go to work in nice weather. It might get chilly once in a while, but thats nothing a sweater can't fix. The two times it has rained while I was commuting, the rain so light and not nearly as cold that I laughed. Rain here tends to be a fine mist.
"exercise outdoors in shorts and a t-shirt 365 days a year" <-- Some people in new York, myself included, do the same thing. Even when it's snowing, most of my friends sport tee shirts and shorts. It's actually more pleasant than the 100+ degree sultry summer weather ...
stupid question: what is considered "silicon valley"? Is it in northern or southern california? (I was under the impression that it was southern california)
The definition of Silicon Valley isn't set by law. Common definition of Silicon Valley is San Jose North to Hayward on the East Bay, up to somewhere around Millbrae on the Peninsula. But it can be roughly considered the area starting at San Jose and running north up to Oakland on the East side of the Bay, and San Francisco on the North Side of the bay. Almost all people would agree that Silicon Valley doesn't go North of San Francisco/Oakland, and doesn't go as far south as Santa Cruz/Gilroy (though last time I checked, you could still take Cal Train from Gilroy into the Valley). Los Gatos might squeak into the Silicon Valley Destination. Morgan Hill is likely too far south.
There are many that wouldn't include San Francisco/Oakland in the "Silicon Valley" region - but enough technology companies have started migrating to those areas, including Emeryville, that I don't think it's too much of a stretch to include those areas.
As far as weather - it's actually highly variant for such a small area, with some parts of the bay benefitting from air conditioners in the Summer, and Heating systems in the Winter (though it rarely gets down to freezing, it can frost up a bit in the morning). I live in Redwood City (Climate best by Government Test), in a reasonably tree lined Page Street - and haven't felt the need for either in the last three years - though it has gotten down to around 55 degrees in the house a few times in the winter.
As a Canadian who used to live in 100 Mile House (actually Fawn Lake) British Columbia, who had to deal with _months_ of sub zero weather, and occasional sub -40 degree day, I'll agree with the general trend here - I'm happy to have left that miserable weather behind.
Silicon Valley is certainly not to be confused with southern California.
Southern California should make you think LA. Silicon Valley should make you think SF. (There are loads of other associations, but that pairing shows how far apart they are.) Totally different, or hella different.
For those who aren't familiar: San Francisco weather sucks, but the valley has great weather. It's weird, but in SF, there are actually relatively few days where you'd want to be outside in shorts and a t-shirt: http://en.wikipedia.org/wiki/San_Francisco#Climate
I saw the talk, and felt his point was hypocritical. He said that FB couldn't have made it outside of the valley, but that knowing what he knows now, it probably could were he starting it today.
In other words, he needed the valley when he was young and inexperienced, but it's not necessary if you have the experience and connections already.
[Edit: The reason I'm saying it's hypocritical is because his point was initially obfuscated, and if you took that statement at face value, you wouldn't get the whole point.]
That doesn't seem inconsistent. That's why he was saying if he started Facebook today, presumably after having some Facebook-like success. The caveat is this is not advice that should be taken by inexperienced entrepreneurs.
The important takeaway is that he would be willing to trade a culture of connections for a place where there's less drive for big cash-outs (like Boston or New York, presumably) from entrepreneurship. This gels with his particular philosophy that entrepreneurship should not be about building companies, but building products.
In practice there is a spectrum and neither approach is less valid than the other.
EDIT: Agreed. Though even he called that headline being on TechCrunch, when he tried to couch his reasoning more carefully than just "I would've started in Boston".
I don't think it was hypocritical at all, but I think Zuck didn't clearly explain what he was trying to say.
His point was that the valley was essential for when facebook was starting because he didn't know anything and could have only learned the necessary things and met the right people in the valley. Because he has learned so much, he was saying that if he started over, knowing what he knows now, then it wouldn't matter where he started because he knows what to do right.
I don't think his point was hypocritical, just a bit illogical. He realized he'd contradicted himself right at the same time he and Jessica both realized he'd said something mildly insulting about the valley, which was a bit awkward. Jessica tried to make a joke (by saying that the press would have a field day with the comment) and Zuck bore down and restated his comment, in the process inadvertently de-emphasizing the original comment's counter-factual nature.
His point was that the valley was critical to FB's success, but that if he were starting a new company today he'd do it in Boston b/c he no longer needs what the valley has to offer and his perception is that in Boston long term value is preferred over short term exits.
I think Zuck's answer started out as a clever non-answer intended to communicate his appreciation of building long term value... probably 100% on message for Facebook's current growth strategy... but went slightly awry.
I don't agree with his point that employees stick it out for long-term success in other places, while they don't in the Valley. Just because people stay with a company for a longer time doesn't mean that they subscribe to a different culture. I've worked in lots of places, and I got the impression that many people hold onto their jobs due to insufficient opportunities in the local area. If they had those opportunities, and a feeling of better security, I bet that they would move around more.
In a way, it sounds like he wants to have employees hang around longer without the company having to invest in a culture that makes them want to stay. The best way to keep employees onboard is a culture in the company that attracts the employees to want to stay. So many startups have compelling cultures at first, then bring in professional management, or excessive growth, and then the original employees seek their desired culture elsewhere. I sure don't want to hang around at a company that brings in traditional management techniques. I care about who I work with, and the conditions --- these days I think I prioritize those criteria over what I work on (and renumeration is a pretty low priority), because I can make lots of things that I work on interesting, but I can't change the management's attitudes (well, I'm trying to write a book to do so, but I wouldn't want to as a leaf node).
I think you're looking for a different word here. Hypocritical, according to my dictionary, means "behaving in a way that suggests one has higher standards or more noble beliefs than is the case".
He started off by saying there were two forms of the question: 1) If I knew what I know now and 2) If I were starting from scratch all over again.
By case he responded:
1) I'd have probably stayed in boston, I like the culture (paraphrased)
2) I'd be here. There's no better way to do it if you don't already know everything
Just like most sound bites this one needs context to be accurate. But I'm sure it will continue to make headlines elsewhere.
He said that the valley was very helpful for him early on as a fresh entrepreneur. He also said he could probably have done it in New York as well.
Also the headline mixes present and past tense, "If I were starting a company now" and "I would have". This doesn't mean in retrospect he would have kept Facebook in boston back in 2005 or whenever he moved to the valley. It means right now.
I'm not sure if anyone else caught Jessica trying to follow up about the serendipitous meetings of people like Sean Parker in the Valley. I think he's completely discounting some of the experiences and chance happenings that acted as a catalyst to Facebook's success.
It goes back to what PG said at YCNYC that apparently he caught a lot of flack for - these types of occurrences, while they happen, are just far too infrequent in other places with less vibrant tech communities.
I don't think Mark was discounting it; I'm sure he appreciated Sean's role. He was just saying if he had the kind of knowledge he now has (maybe top HN articles, avc.com would suffice?), he would have stuck around Boston or New York.
Paul's example would better be supplemented by other stories like the telecom startup which was having a rough time, got in touch with Ron Conway who was an investor or FoF, Ron replied that he knew a telcom exec, and the company was saved.
You can absolutely create a scalable startup elsewhere but you have to be the right person with the right business.
I think he was just being off-the-cuff and flippant like a conversationalist. It wasn't some big statement. The q&a format lends itself to this style. He also said he hadn't really thought about it much.
Also for non-web companies, I think it's better to be outside the valley -- it's just such an echo chamber there. We're doing a biotech startup and I think locating in Boston was the right choice.
It's important to remember that Zuckerberg kept saying 'I don't know', because he was thinking out loud, not speaking from a script.
Zuckerberg said he would stay in Boston or move to New York, in consideration with moving to Silicon Valley, if he was starting Facebook right now, and knew what he knows already. He would start a company in a location where it was commonplace to build sustainable businesses, with employees who grow within a company. He admitted that six or seven years ago, when he didn't know anything or anyone, he could not have done Facebook without being in Silicon Valley.
My thought is that if a big consumer-facing/social tech company like Facebook was successful in Boston (now or in the future), many more companies like Zynga and other startups would be based in Boston as well. Facebook's and Google's success (and their willingness to buy startups that may or may not have a viable business at the time) causes a side effect where highly paid employees save up money and quit these and similar companies in order to create startups just a few miles away.
After all, Zuckerberg also stated he believed that the next wave of applications will have to integrate with social networks or else will die. If this is true, he must expect that a ton of startups would be started in garages and incubators all around where such social networks are based (Facebook and Twitter, which happen to be in Palo Alto and San Francisco.)
It would probably be more accurate to believe that Zuckerberg means that Silicon Valley is the best place to start a company, but he wishes it had a startup culture that he believes other cities like Boston and New York have right now (while they don't have very many giant web properties headquartered there).
He doesn't realize that a Facebook in Boston would mean that 1) investors were more likely to invest in startups than they really had been and 2) the built-to-flip companies of ex-Google and ex-Facebook employees (and those of other companies) would now be based in Boston or New York, both factors changing the startup culture of that city.
The main reason employees do not stick with companies as long in the Valley as in Seattle (or most likely anywhere else for that matter) is because a lot more people that work here want to start or join their own startup. And if they did not think about doing it initially, they will eventually get there since it is so much in the local culture.
I think it also helps that there are more options. You're much more likely to find somebody working on something you're really passionate about here than anywhere else, even if you're not actively looking. Not only are there more small companies, but (at least in my experience) everybody talks about interesting ones all the time.
PG @ YCYNC: Boston investors have no balls. Raising money in Boston is time consuming - I know it first hand.
It could have been difficult for FB to raise their $500k round in Boston. It also would have been hard to find advisers/mentors who could really have an impact in the early days.
The low density seed stage investors and early stage consumer-web mentors in Boston puts Boston startups at a huge disadvantage. That's why so many companies relocate to the Valley. I recently studied this in detail... it's astonishing how many awesome companies leave. Many of them leave at the same inflection point: raising the angel round.
FB should open a Boston office - (1) it would help their recruiting efforts and (2) would improve the Boston ecosystem and hopefully create more consumer-web angels here.
I get that it is expensive and challenging to keep the best engineers in Silicon Valley for years at a time. However, it seems really odd to conclude from that that the solution would be to start a consumer web startup in Boston.
I can name almost no consumer web startups from the past decade that weren't built in Silicon Valley. Stack Overflow? MySpace? Some fashion startups in NYC? Anything else?
For most of its early life (and perhaps still), Facebook had less than one engineer per million users. Is that kind of talent available outside of the Valley? How many people that have worked at the scale of Google/Facebook/Yahoo!/Twitter (with all that it entails in terms of coding standards, infrastructure, and so on) exist outside of the Valley? Maybe the Seattle area has enough ex-Amazon/ex-Microsoft people to launch a big consumer web startup, but even there, a substantial part of Bing seems to be based in Silicon Valley.
Please explain how moving any of these companies to Silicon Valley would have made them better than Facebook?
I would are that Foursquare in NY and Foursquare in SF would still have the same premise and penetration that it has if it were build in SF, I think many of these companies are limited by their concepts and not their location.
However if you feel as though Foursquare etc would have been better if they were based in Si Valley, please explain why.
The success of a startup is commonly viewed to be a combination of the concept and the execution. Of course, the "concept" is rarely a singular thing---a company often needs an initial niche product to score desperate early adopters, and then it may need a more general vision to break into larger markets. Was/is Facebook a social network for college students? A social graph? A platform for social games?
Silicon Valley seems like a good multiplier on execution, as well as a place where it is easier (and more expected) to increase the original product vision. VCs insist on the team trying to take over a $100B+ market, many top infrastructure engineers, mobile developers, UX people, and so on won't stay if they don't think the equity will be worth anything, and there is a huge amount of highly mobile web talent. More talent breeds more ideas, expanding the concept and improving the execution.
Could Facebook have scaled their engineering team to handle 2x-5x the number of users every year (with maybe 1m users on day one of the company), with a huge portion of those users viewing the website every day, without being in a place with (a) tons of web talent and (b) a culture where leaving an established job to work at a web startup was reasonable?
In terms of upper level management, half of Facebook's C-level executives appear to be ex-Google. Could Facebook have gotten that level of operational and advertising expertise in Boston?
To answer your question directly, I suspect there are huge recruiting, operational, and business development challenges to running a large scale consumer web startup outside of Silicon Valley. That said, it is hard to know how that would impact any particular company, or any particular space (e.g., location-based services).
Oh, definitely not disagreeing that SV/SF is #1 in terms of density & scale of technology companies. This is undeniable.
Just offering that there are some significant consumer web tech companies being started in other places these days. More now than ever in fact.
Shameless plug mode:
And BTW, the technical challenges at foursquare are actually pretty interesting. We have all the issues you'll see in a social network (primarily the fact that our data is hard to partition) combined with the fact that much of what we do is based on your (or your friends) entire history of usage. It gets pretty hard pretty fast. If you find this sort of thing interesting I'd love to talk to you. http://foursquare.jobs
>I can name almost no consumer web startups from the past decade that weren't built in Silicon Valley. Stack Overflow? MySpace? Some fashion startups in NYC? Anything else?
> Uhm, I would wager that there are a lot of smart engineers who don't live in California.
No one is suggesting otherwise.
However, if you need a critical mass in a given area, you don't have a lot of choices. For many areas, CA has a couple of options. (SoCal would be considered a big deal if it didn't happen to be in the same state as SV.)
If Zuckerberg really thinks that Silicon Valley VCs are short-sighted (and I'm not saying that they are or they aren't), why doesn't he put his money where his mouth is? He's in a unique position to be investing in companies that could achieve success on a timespan that exceeds the five to ten year horizon that VCs are constrained by.
Also, which of these Boston investors are investing long-term? I want to meet some of them.
Good points. It seems he certainly has an interest in startups in the tech industry. It would be great to see him work with or invest in companies he has a lasting interest in.
The Boston comment may get the most press, but I think the most important thing he said is the next 5-10 years comment, that it will be about what we build now that connections are mapped and, importantly, available to tap into. It's not a secret and not the first time he's said that, but to me it reinforces that FB will keep doing app-friendly things like Open Graph.
Although I agree there are plenty of people who want to start a company before they have a product or passionate area of interest I don't agree this is a reason for him to have stayed in Boston.
Zuck is not appreciating the fact the one of his most valuable assets (Sean Parker) was out here and help him raise a tremendous amount of capital for facebook. The story could be much different if he was in Boston without Sean Parker. I certainly think they wouldn't be doing better, and he might not have control of the company anymore. I just think its silly to rewrite history in your mind and assume you would have the same success.
Zuckerberg's answers were really bizarre (though I appreciate what he was saying about Silicon Valley, which is a reaction to his belief there are too many tech employees who don't commit to a long term vision.)
But bizarrely, he said 1) he had no intention of forming a company when he came to Silicon Valley, even though, 1) they brought interns and 2) had already incorporated badly.
Even more odd was his assertion he started with the idea of building a social graph identity system and then built Facebook. I'm not knocking either of those innovations, but I seriously doubt this narrative. I think the graph grew out of watching what people did on Facebook and then realizing, brilliantly, how he could build an extensible social-identity service that would turn Facebook into internet infrastructure, instead of a MySpace replacement that could be jettisoned by users when the next cool social network (Google+, for instance) came around.
The problem with this way of thinking is that it works if you are successful, but it doesn't allow much room for failure. And failing can be as important as succeeding.
In the Valley if you fail, despite having investors and solid employees, it sucks but you basically close up shop and move on. There may be some short term resentment, but basically you are forgiven and allowed to try again. Zuckerberg criticizes the shorter term employment of most people in the Valley - but that's because better opportunities come along. If a company fails, you don't have to feel as bad cause the employees you've let go should find work elsewhere in a reasonable amount of time. That's not as easy in other cities. But it's important for the ecosystem to thrive.
I think people are blowing his words out of proportion. I found his comments were delivered casually, with a pretty straightforward message: he wasn't discounting what SV has to offer, he was simply stating it has more to offer to those who know don't know what they're doing.
He didn't know what he was doing when he founded FB (by his own admission), and so moving to SV was immensely helpful for him. He knows how to run a company now, and was simply stating that for those who live outside SV and know what they're doing, there's nothing intrinsically holding you back from success by locale.
You should also keep in mind that Zuckerburg is originally from the east coast so he may be biased against SV.
What I find mildly offensive is that he's generalizing everybody in the valley as go-getters with short attention spans and no interest in long term value. I guess I've never been anywhere else, but the majority of the people I meet out here have a passion for creating things of value.
Having watched the event live in person, I think this point has been taken out of context. Mark's point was that there's no way he could have succeeded with facebook without the valley as he was young and inexperienced, but knowing what he knows now he could have been successful back in Boston.
My interpretation of his comment was that it is easier to be successful through getting noticed in a place where there is less noise from everyone and their dog starting companies, but being in that situation is invaluable if you don't know what you're doing.
My biggest concerns on this article is "He explained that he had a conversation once with Amazon founder and CEO Jeff Bezos about this, and the average time someone stays in job at Seattle is twice as long than it is in Silicon Valley. "
Could we say "higher liquidity in labor markets empowers disruptive innovation" or "disruptive innovation needs higher fluid labor markets."? If someone knows the report about this issue, please share with us.
Actually, the labor market in Japan is very lower liquidity. The reasons will be that most Japanese prefers stability in their life, and that recruiters in big firms prefer lower number of career changes in a specific period, 5 or 10 years. Concurrently, we have experienced social slumber, so-called "Lost Decade".
But, for reference, here is the interesting point about Japan History.
When we experience drastic social change, such as The Meiji Restoration and The Defeat in WW2, most Japanese suddenly abandons the preference for stability and drastically drives themselves to creative destruction. Sony and Honda were born right after WW2.
3.11 Tohoku Earthquake might have been a good trigger for drastic social change in Japan.
There are first-order consequences to things and there are second-order and n-order consequences. For anything, especially chess, the first-order consequences may well be attractive, but that's not enough to make a decision.
Sometimes, it's better to be an outsider than an insider, you can be advantaged through being disadvantaged, and sometimes, the best way to find milk and honey is to wander the desert.
The Beatles listened to American music from another continent over radio, completely in the dark, working in Hamburg, Germany.
Daniel Lanois, producer of Bob Dylan, Willie Nelson, spent years in Canada, working in a basement, honing skills, plenty of solitary confinement.
Warren Buffett, made it a point to work from a small converted bathroom in his house in Omaha, rather than on Wall Street.
Mark Shuttleworth ran Thawte from a garage in Cape Town, at a time when South Africa had amongst the worst Internet connectivity. Broadband is still an order of magnitude more expensive.
Amazon, Microsoft, and 37Signals were founded and remain outside the Valley.
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[ 2.8 ms ] story [ 101 ms ] threadHow many Twitters/Facebooks/Dropboxes/Airbnbs don't exist because the founders sold them for $15M in 18 months?
Sometimes it's because the founders aren't really passionate enough about what they're working on.
Other times it's just financially insane to say no. A great example is Mint.com. How do you tell Aaron Patzer not to sell, when he's going to make $40M personally? That's more than he might have made in an IPO after many years.
If the founders exited with the cash they were looking for, so what?
> How do you tell Aaron Patzer not to sell, when he's going to make $40M personally?
You don't, and why should you?
> That's more than he might have made in an IPO after years more work.
Who care about an IPO? If you can cash out before that, awesome!
Imagine if Yahoo hadn't flubbed the acquisition of Google? We'd all be worse off.
A founder exiting with millions isn't strangling anything. They aren't working to change the world, they're working to make enough money to not have to. Those who want to change the world, like Zuck, wouldn't take the buyout offer because money wasn't the goal. Those who take the cash would have taken it whenever it was offered and left regardless, better to do it early and it's just wrong to say the company was strangled.
> Imagine if Yahoo hadn't flubbed the acquisition of Google?
You don't know that. For all you know, the combined money of Yahoo and talents of Google could have resulted in something better than what we ended up with. No one knows either way.
It's pretty hard to prove these sorts of things, since it's hard to set up solid experiments with good controls in economics, but there is some interesting research around the what-drives-innovation question, and it's not an unreasonable hypothesis, at least.
I can definitely see that Google is more likely to foment transformation than a Yahoo, but I think it's a lot harder to say that we're better off with fewer acquisitions. It seems like the only good metric is number of good employees at good companies, and it doesn't matter much if it's Google or a company that decided not to get acquired by Google. (Although I don't think it'd be that great if Google were the only 'good company' in this hand wavy metric.)
It goes both ways. Imagine if Google hadn't bought Android? We'd all be worse off.
In my experience, founders in the Valley are more likely to have the confidence to turn down acquisition offers than founders outside it. All the examples you list are Valley startups.
It's a catch-22 for technology companies - on the one hand, they have to work pretty hard (or offer a lot of money) to hold onto their employees past that five year mark. On the flip side, the reason they have to work so hard to do so, is because there are so many employees ready to change companies - including coming to work for theirs.
I believe this is the norm outside the Valley as well.
I'm trying to find a blog post about how, after 3 years at the same job, the challenge diminishes and it makes more sense to switch (if management doesn't recognize the need for growth).
[EDIT] Well, someone doesn't like that I speak up my mind. So I can't make an opinion about this now without being downvoted?
I agree that Zuck seemed unprepared and rambled, frequently forgetting what he was talking about, but that's not something the host can control.
Instead, she continued asking the same question. For example: "What did you do right?". Come on, is she seriously trying to get a coherent answer out of Mark with that? Is there a SINGLE thing that Mark could've done right to build a successful worldwide product? It's like asking for a silver bullet for startups. There's none. And then she kept asking that question over and over again..
http://news.ycombinator.com/threads?id=jl
Nice way to make someone smile though, even if it was not intentional.
Winter is highly overrated.
That's half of why I moved out here. The fact that this place is a programmer's mecca and I've wanted to live here since I was a kid was the other half.
People underestimate how much nicer the world is away from the Chicago-Boston-DC triangle.
Seems like the coldest high temperature in Chicago's recorded history was -11ºF
FWIW I've lived in both SF and Chicago and quite like Chicago's climate/seasons and really liked the city life much more than I did in SF (although the stuff a couple hours from SF is fantastic), and I'm not at all alone (I live in NY now)
When I moved to sf I used to snicker at the people you see wearing leather coats and scarves because it's 45F out. Now I do the same :( No winter for no summer is a great trade.
Contrary, I find my productivity increases with warm weather given the freedom to move around with ease (walking to a coffeeshop or waiting for a train/bus). Not to mention health benefits of things like vitamin D.
It got boring. Now I'm in Seattle and the weather is actually interesting. It rains a lot, and we have very occasional snowfall, but most of the time I can still motorcycle.
I'm not sure what this has to do with HN, except that outside of SF, Silly Valley weather is generally drama-free and leaves you more time for work. :)
Northern California doesn't have that problem either.
There are many that wouldn't include San Francisco/Oakland in the "Silicon Valley" region - but enough technology companies have started migrating to those areas, including Emeryville, that I don't think it's too much of a stretch to include those areas.
As far as weather - it's actually highly variant for such a small area, with some parts of the bay benefitting from air conditioners in the Summer, and Heating systems in the Winter (though it rarely gets down to freezing, it can frost up a bit in the morning). I live in Redwood City (Climate best by Government Test), in a reasonably tree lined Page Street - and haven't felt the need for either in the last three years - though it has gotten down to around 55 degrees in the house a few times in the winter.
As a Canadian who used to live in 100 Mile House (actually Fawn Lake) British Columbia, who had to deal with _months_ of sub zero weather, and occasional sub -40 degree day, I'll agree with the general trend here - I'm happy to have left that miserable weather behind.
Southern California should make you think LA. Silicon Valley should make you think SF. (There are loads of other associations, but that pairing shows how far apart they are.) Totally different, or hella different.
In other words, he needed the valley when he was young and inexperienced, but it's not necessary if you have the experience and connections already.
[Edit: The reason I'm saying it's hypocritical is because his point was initially obfuscated, and if you took that statement at face value, you wouldn't get the whole point.]
The important takeaway is that he would be willing to trade a culture of connections for a place where there's less drive for big cash-outs (like Boston or New York, presumably) from entrepreneurship. This gels with his particular philosophy that entrepreneurship should not be about building companies, but building products.
In practice there is a spectrum and neither approach is less valid than the other.
EDIT: Agreed. Though even he called that headline being on TechCrunch, when he tried to couch his reasoning more carefully than just "I would've started in Boston".
His point was that the valley was essential for when facebook was starting because he didn't know anything and could have only learned the necessary things and met the right people in the valley. Because he has learned so much, he was saying that if he started over, knowing what he knows now, then it wouldn't matter where he started because he knows what to do right.
His point was that the valley was critical to FB's success, but that if he were starting a new company today he'd do it in Boston b/c he no longer needs what the valley has to offer and his perception is that in Boston long term value is preferred over short term exits.
I think Zuck's answer started out as a clever non-answer intended to communicate his appreciation of building long term value... probably 100% on message for Facebook's current growth strategy... but went slightly awry.
In a way, it sounds like he wants to have employees hang around longer without the company having to invest in a culture that makes them want to stay. The best way to keep employees onboard is a culture in the company that attracts the employees to want to stay. So many startups have compelling cultures at first, then bring in professional management, or excessive growth, and then the original employees seek their desired culture elsewhere. I sure don't want to hang around at a company that brings in traditional management techniques. I care about who I work with, and the conditions --- these days I think I prioritize those criteria over what I work on (and renumeration is a pretty low priority), because I can make lots of things that I work on interesting, but I can't change the management's attitudes (well, I'm trying to write a book to do so, but I wouldn't want to as a leaf node).
By case he responded: 1) I'd have probably stayed in boston, I like the culture (paraphrased) 2) I'd be here. There's no better way to do it if you don't already know everything
He said that the valley was very helpful for him early on as a fresh entrepreneur. He also said he could probably have done it in New York as well.
Also the headline mixes present and past tense, "If I were starting a company now" and "I would have". This doesn't mean in retrospect he would have kept Facebook in boston back in 2005 or whenever he moved to the valley. It means right now.
It goes back to what PG said at YCNYC that apparently he caught a lot of flack for - these types of occurrences, while they happen, are just far too infrequent in other places with less vibrant tech communities.
Paul's example would better be supplemented by other stories like the telecom startup which was having a rough time, got in touch with Ron Conway who was an investor or FoF, Ron replied that he knew a telcom exec, and the company was saved.
You can absolutely create a scalable startup elsewhere but you have to be the right person with the right business.
Saying you'd put your biotech company in Boston probably supports the "consumer web startup in SFBA" argument.
Zuckerberg said he would stay in Boston or move to New York, in consideration with moving to Silicon Valley, if he was starting Facebook right now, and knew what he knows already. He would start a company in a location where it was commonplace to build sustainable businesses, with employees who grow within a company. He admitted that six or seven years ago, when he didn't know anything or anyone, he could not have done Facebook without being in Silicon Valley.
My thought is that if a big consumer-facing/social tech company like Facebook was successful in Boston (now or in the future), many more companies like Zynga and other startups would be based in Boston as well. Facebook's and Google's success (and their willingness to buy startups that may or may not have a viable business at the time) causes a side effect where highly paid employees save up money and quit these and similar companies in order to create startups just a few miles away.
After all, Zuckerberg also stated he believed that the next wave of applications will have to integrate with social networks or else will die. If this is true, he must expect that a ton of startups would be started in garages and incubators all around where such social networks are based (Facebook and Twitter, which happen to be in Palo Alto and San Francisco.)
It would probably be more accurate to believe that Zuckerberg means that Silicon Valley is the best place to start a company, but he wishes it had a startup culture that he believes other cities like Boston and New York have right now (while they don't have very many giant web properties headquartered there).
He doesn't realize that a Facebook in Boston would mean that 1) investors were more likely to invest in startups than they really had been and 2) the built-to-flip companies of ex-Google and ex-Facebook employees (and those of other companies) would now be based in Boston or New York, both factors changing the startup culture of that city.
I can name almost no consumer web startups from the past decade that weren't built in Silicon Valley. Stack Overflow? MySpace? Some fashion startups in NYC? Anything else?
For most of its early life (and perhaps still), Facebook had less than one engineer per million users. Is that kind of talent available outside of the Valley? How many people that have worked at the scale of Google/Facebook/Yahoo!/Twitter (with all that it entails in terms of coding standards, infrastructure, and so on) exist outside of the Valley? Maybe the Seattle area has enough ex-Amazon/ex-Microsoft people to launch a big consumer web startup, but even there, a substantial part of Bing seems to be based in Silicon Valley.
foursquare, tumblr, groupon, spotify, meetup, kickstarter
(Groupon obviously had to scale sales, but that's not what I mean here.)
Here's tumblr.com vs blogspot.com on Google Trends:
http://trends.google.com/websites?q=tumblr.com%2Cblogspot.co...
Here's foursquare.com vs facebook.com on Google Trends:
http://trends.google.com/websites?q=facebook.com%2Cfoursquar...
Here's etsy.com vs ebay.com (from another comment):
http://trends.google.com/websites?q=ebay.com%2Cetsy.com&...
Here's the other four you list vs facebook.com:
http://trends.google.com/websites?q=facebook.com%2Cgroupon.c...
Please explain how moving any of these companies to Silicon Valley would have made them better than Facebook?
I would are that Foursquare in NY and Foursquare in SF would still have the same premise and penetration that it has if it were build in SF, I think many of these companies are limited by their concepts and not their location.
However if you feel as though Foursquare etc would have been better if they were based in Si Valley, please explain why.
Silicon Valley seems like a good multiplier on execution, as well as a place where it is easier (and more expected) to increase the original product vision. VCs insist on the team trying to take over a $100B+ market, many top infrastructure engineers, mobile developers, UX people, and so on won't stay if they don't think the equity will be worth anything, and there is a huge amount of highly mobile web talent. More talent breeds more ideas, expanding the concept and improving the execution.
Could Facebook have scaled their engineering team to handle 2x-5x the number of users every year (with maybe 1m users on day one of the company), with a huge portion of those users viewing the website every day, without being in a place with (a) tons of web talent and (b) a culture where leaving an established job to work at a web startup was reasonable?
In terms of upper level management, half of Facebook's C-level executives appear to be ex-Google. Could Facebook have gotten that level of operational and advertising expertise in Boston?
To answer your question directly, I suspect there are huge recruiting, operational, and business development challenges to running a large scale consumer web startup outside of Silicon Valley. That said, it is hard to know how that would impact any particular company, or any particular space (e.g., location-based services).
Just offering that there are some significant consumer web tech companies being started in other places these days. More now than ever in fact.
Shameless plug mode:
And BTW, the technical challenges at foursquare are actually pretty interesting. We have all the issues you'll see in a social network (primarily the fact that our data is hard to partition) combined with the fact that much of what we do is based on your (or your friends) entire history of usage. It gets pretty hard pretty fast. If you find this sort of thing interesting I'd love to talk to you. http://foursquare.jobs
I believe Etsy is based in NY.
No one is suggesting otherwise.
However, if you need a critical mass in a given area, you don't have a lot of choices. For many areas, CA has a couple of options. (SoCal would be considered a big deal if it didn't happen to be in the same state as SV.)
Also, which of these Boston investors are investing long-term? I want to meet some of them.
Zuck is not appreciating the fact the one of his most valuable assets (Sean Parker) was out here and help him raise a tremendous amount of capital for facebook. The story could be much different if he was in Boston without Sean Parker. I certainly think they wouldn't be doing better, and he might not have control of the company anymore. I just think its silly to rewrite history in your mind and assume you would have the same success.
But bizarrely, he said 1) he had no intention of forming a company when he came to Silicon Valley, even though, 1) they brought interns and 2) had already incorporated badly.
Even more odd was his assertion he started with the idea of building a social graph identity system and then built Facebook. I'm not knocking either of those innovations, but I seriously doubt this narrative. I think the graph grew out of watching what people did on Facebook and then realizing, brilliantly, how he could build an extensible social-identity service that would turn Facebook into internet infrastructure, instead of a MySpace replacement that could be jettisoned by users when the next cool social network (Google+, for instance) came around.
This video shows the opposite: http://www.youtube.com/watch?v=--APdD6vejI
He didn't know what he was doing when he founded FB (by his own admission), and so moving to SV was immensely helpful for him. He knows how to run a company now, and was simply stating that for those who live outside SV and know what they're doing, there's nothing intrinsically holding you back from success by locale.
What I find mildly offensive is that he's generalizing everybody in the valley as go-getters with short attention spans and no interest in long term value. I guess I've never been anywhere else, but the majority of the people I meet out here have a passion for creating things of value.
My interpretation of his comment was that it is easier to be successful through getting noticed in a place where there is less noise from everyone and their dog starting companies, but being in that situation is invaluable if you don't know what you're doing.
Could we say "higher liquidity in labor markets empowers disruptive innovation" or "disruptive innovation needs higher fluid labor markets."? If someone knows the report about this issue, please share with us.
Actually, the labor market in Japan is very lower liquidity. The reasons will be that most Japanese prefers stability in their life, and that recruiters in big firms prefer lower number of career changes in a specific period, 5 or 10 years. Concurrently, we have experienced social slumber, so-called "Lost Decade".
But, for reference, here is the interesting point about Japan History.
When we experience drastic social change, such as The Meiji Restoration and The Defeat in WW2, most Japanese suddenly abandons the preference for stability and drastically drives themselves to creative destruction. Sony and Honda were born right after WW2.
3.11 Tohoku Earthquake might have been a good trigger for drastic social change in Japan.
Sometimes, it's better to be an outsider than an insider, you can be advantaged through being disadvantaged, and sometimes, the best way to find milk and honey is to wander the desert.
The Beatles listened to American music from another continent over radio, completely in the dark, working in Hamburg, Germany.
Daniel Lanois, producer of Bob Dylan, Willie Nelson, spent years in Canada, working in a basement, honing skills, plenty of solitary confinement.
Warren Buffett, made it a point to work from a small converted bathroom in his house in Omaha, rather than on Wall Street.
Mark Shuttleworth ran Thawte from a garage in Cape Town, at a time when South Africa had amongst the worst Internet connectivity. Broadband is still an order of magnitude more expensive.
Amazon, Microsoft, and 37Signals were founded and remain outside the Valley.