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by kevinpfab
5365 days ago
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I'm curious at Hacker News' thoughts on what it takes to start a startup hub. For instance, here in Blacksburg, VA (Virginia Tech) a few local entrepreneurs and Angels are trying to get the startup community here off the ground. We've gone from little activity, to having a populated co-working space and regular meetups. The community is small and close; which is great for all those involved. However, most companies that start here still aspire to move out to the Valley. The opportunities there still dwarf the opportunities here, and we're constantly in danger of losing what few founders we have. Granted, Blacksburg isn't exactly a geographically optimal spot for techies to flock to. But is it possible that the larger hubs such as the Valley have too much pull for smaller communities to really take off? |
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1) Huge risk tolerance, and of a different sort than Wall St. The risk model of the startup ecosystem is different than for the banking system., in fact it's the inverse. Wall St. tends to chase returns (especially in trading, which has become a huge part of their revenues), and quarterly performance evaluations are even structured around that. But chasing ever larger returns based on leverage and debt entails ever more risk, exposing you to the possibility of catastrophic, systemic loss. The higher the return, the more exposure to company-ending loss.
In the startup world, many small bets are spread across many companies, 90% fail, 9% succeed somewhat, and perhaps 1% hit it big. But the ROI from that 1% more than makes up for all the small losses of the 90%.
Graphing the startup ecosystem ROI on chart would look like a line with a negative slope, punctuated by positive spikes. Whereas graphing the banking system's revenue would be inverse - a positive slope, punctuated by negative loss spikes.
Silicon Valley seems more comfortable with and tolerant of the periods of negative ROI than any other culture I've observed, supremely confident that the positive spikes do happen, and that you don't even have to guess exactly where they'll come from as long as you play the odds and spread your bets. It's just an article of faith here.
2) Innovation pervades everything, from academia, tech, and business, to social, even spiritual. By way of example, one of the first people I met here was a guy studying to be a Shamman. Anywhere else in the US, especially the east coast, such a thing might raise eyebrows, but here it's just par for the course - unbounded experimentation with anything and everything. For another example, is there anywhere else in the US that something like Burning Man could have become what it has? Doubt it. Innovation is universal here, not applied in some domains (tech) but stymied in others (social, spiritual), it's applied everywhere.
Those two also seem to reinforce each other. Risk tolerance begets innovation begets success begets risk tolerance begets innovation begets ...
Plenty of places have some degree of innovation, but I'm not sure there's anywhere it pervades culture to the extent it does here. That's one more big thing other startup hubs are up against.