I have worked in Silicon Valley the majority of my career as a designer at startups and big companies. I have visited hundreds of meetups, I have seen tons of conferences, and I am fortunate to have met thousands of awesome people(some not so much) and I would still not build a startup in Silicon Valley and here is why.
I have seen the valley from an interesting vantage point, and it’s not pretty, lots of hot air and entitled people who have done jack shit contributing to our existence as humans (And we’ve also seen flashes of brilliance). The cost of living is just not scalable, when you make $150K/yr and you can apply for low income housing, we have a big problem.. economics is not on your side.
******I am not a dick head, just a realist that thinks long term, and is bullish on how to use funding so please, don’t read this if you get offended easily*******
How I see valley startups
Everyone and their dog has a startup these days. It’s the hip trendy thing to do in the valley, go buy some cuffed pants, order shirts with your company logo on it, get a hip hat, some glasses, try to grow out a patchy beard and always talk about your startup everywhere you go, oh and drink coffee.
I see great ideas and lots of dumb ideas (poor execution, poor design..etc), but I try to find the positive things in them. I have also seen my fair share of dumb ideas with millions in funding, and the story sounds like this:
Get some trendy office in SoMa, hire an interior decorator, buy furniture, buy a bunch of shit that you would see in a frat house (Pool table, beer taps..etc) cater lunches daily, oh, and you can’t forget the $15,000 espresso machine, then hire Deadmau5 to DJ your launch party which is also a free open bar for thousands of random people. Then 5 months later you realize after you prematurely hired 20 people your burn rate is $200k/mth and you need more money to grow and scale or pivot. Now it’s time to have that awkward discussion with your investors how you’re not good at prioritizing spending and financial requirements, but you’re learning now so its ok. This is the problem with giving kids millions of dollars, they went from having an allowance(or small salary)to having millions of dollars at their disposal and most of them are not mature enough to handle the pressure or make bold decisions.
If the founders are at conferences, parties or shaking hands..etc and everyone else is on holidays (unlimited vacation time) or drinking beers, and playing ping-pong, then who the fuck is building the product? I thought the main goal was to build a kick ass product for real humans living outside of this bubble? and not focusing on building Pee-wee hermans playhouse.
I get the culture needs to be hip and cool to attract talent, but chances are your customers did not attend your launch party (I highly doubt that sweet lady from Wisconsin who used your service showed up to rock the house) its all a bunch of pep rally bull shit that gives founders egos, false representations about success, and endorphin rushes they will now crave going forward. If you want to party, go party, fine but don’t spend $20K on it, you might need that money to keep the lights on one day.
Advantages vs Disadvantages
Silicon Valley and California is full of robbers just stealing money from hard working americans, they are taking advantage of our good fortune and unfortunately non-tech people get caught in the cross fire and can’t afford to provide for their families, its a fucking disaster I feel in some way responsible for it. I was paying $2900 for a run down 2 bedroom condo in a giant condo farm in Mountain View, people would steal my Google food orders while I was at work, it had old finishes, an ant problem, tiny washer and dryer that worked 40% of the time, fake hardwood flooring, and the place was only 800 sq/ft.
Moving to a cheaper city will give your startup a longer runway, and the #1 reason most startups die is because they run out of money, so in theory you will have a longer survival rate which means you might eventually see success.
Let me ask you this: How can you bootstrap a startup when the avg. shitty little apartment is renting for $3000/mth in Bay Area? if you can even find one, and food is overly expensive, it feels like any time I go out I spend $100 easy. This place is starting to look like the most non economical place to start/run a company. I know its beautiful, but so is Seattle, and its half the cost to live.
The clear disadvantage is also an advantage and I will explain. Being in a tech hub is advantageous because you are in the “know”, you have your finger on the tech pulse at all times. You are within walking or driving distance to the top tier VC firms in the world, and you have access to their after work watering holes to make that “serendipitous” connection. You get to see every startup launch, you have access to see every cool event without buying plane tickets and booking an Airbnb, and you get to hangout with like minded people. WOW! sounds all good right? no… and yes.
Startup Fatigue, Turning it all off to focus
I see startup fatigue happen all the time to good people, myself included. I get fucken sick of seeing and hearing about everything, its a real distraction. Company “X” just raised $50 million, Company “F” just got acquired for $600 million..etc this is happening all day its like being a stock broker but it doesn't stop when the NYSE whistle blows, my head feels like its going to explode sometimes. As cool as they are companies like Product Hunt don’t help either, its a major distraction to see more crap coming out by the day, and most the products end up as a bookmarks that “I’ll eventually get too” but realistically never do. How do you keep up with everything? where is the happy medium? I still need to talk shop at parties and conferences and not look like I have been living under a rock for 6 months.
I have talked with a few startup founders from Seattle and they all tell me they enjoy the heads down time and feel really focused not being in the craziness of the valley. They also say they feel like they have a better relationship with their customers or users because they don’t feel like they are building a “valley driven product” or product influenced by the environment that only survives in that bubble.(Interesting)
Talent wars happen daily in the Valley, every job I ever had was because I was head hunted by another company, its a fucking cut throat business, money talks and bullshit takes the bus. The tech recruitment industry is crazy here, it fuels the whole tech economy, and they just throw large salaries at people and bribe them with cash sign-on bonus, and food. I know a developer that refused to work for any tech company that did not cater food daily for breakfast, lunch and dinner.(he works at Google now) but if this is the driving force of making a decision for people, do you really want someone like that working for you? they don’t even see the big picture, all they see and care about is all you can eat, and a future of being on beta blockers for heart issues. All we do is bribe people to work for us in the valley, when your startup is large enough where new hires get significantly lower stock, they resort to ping-pong tables, organic treats, juice bars, and all the other shit that continues to fuck up expectations.
Hiring and keeping talent in Seattle sounds like this “so you hate your job at Amazon, or Microsoft and want to work for our startup?” awesome are you happy with $100k salary and amazing stock options “why yes sir, I can still provide for my family with this salary, but the stock sounds more interesting”. And now I don’t have to worry about 100 other startups trying to outbid me, or offer more shit to him/her.
Funding and money
When you take money from a VC firm or Angel(s) you are now responsible for something much greater then that thing you started building, you convinced people to give you millions in return you will make them much more. That being said, you should be mindful and make responsible decisions on how to spend their money, like finding ways to cut cost but not be cheap (being cheap can hurt you). This showing of responsibility lets them breath a little easier knowing you are not flying to Vegas every weekend partying or what some call “making connections bro”, or making it rain at strip clubs.
I’m out.. enjoy! and I wish everyone the best of luck, never stop building your dream and always surround yourself with positive people.