Hypothesis: The Next Wave of Transformative Companies Will Come From Outside of Silicon Valley

Peter Brack
4 min readSep 5, 2018


I was living in Beijing when the Global Financial Crisis began to kick in. Up to that point, my entire career and my entire adult life were spent overseas, always in emerging markets. As a founder, the crisis hit me at the worst possible time — we had just filed for an IPO on NASDAQ. If you’re looking for an uncomfortable read, you can read about that here.

I survived that difficult period, but as the dust settled I began to see the world through a different lens. Looking at the U.S. from far away, I saw the world’s largest economy experience a massive, once-in-two-generations valuation reset across all asset classes (ie, a once-in-a-lifetime opportunity). At the same time I began to form a hypothesis which took my career, and my life, through a significant transformation. Having built a career first in the corporate world and then as a founder, I felt like I had enough operating and entrepreneurial experience to help other founders in meaningful ways. I also knew I needed to learn more. But how does one learn to be an early-stage investor? And where? I looked to Silicon Valley of course. I began to make more frequent trips from Asia to the U.S., mainly to the Bay Area and to New York.

Somehow Los Angeles got on the itinerary. Once I began spending time in LA, I sensed something familiar: an emerging market. Smart founders with great ideas were building important tech and software-driven companies across a multitude of domains, all in a vibrant, diverse city that was not previously known for tech startups. So the hypothesis grew stronger.

The Future of Startups Will Be More Evenly Distributed

2013 brought many long trips away from my home in Hong Kong, and longer stays in LA. My hypothesis became clear and simple: great ideas and brilliant founders come from all over, and important companies can be built anywhere. Why not LA?

My bet was that the Los Angeles startup ecosystem would grow exponentially, and I wanted to be a part of it. So we moved across the world and rented a tiny house in West Hollywood.

For the last four years at Mucker Capital I’ve learned from some of the best investors I know. My friends Will Hsu and Erik Rannala have taught me more than I could imagine. I’ve been able to participate in LA’s explosive growth as a startup market while working with some of the smartest founders and teams, and helping to build our community.

Meanwhile, AWS and other tools continue to make it far less costly and far easier to start a company anywhere. The playing field for entrepreneurship continues to level, and geographic location is becoming a less important detail. So, my original hypothesis has expanded: great ideas and brilliant founders come from all over, and important companies can be built anywhere. Why not EVERYWHERE?

Innovation is Everywhere

About three years ago my friend Bong Koh was raising a small fund, and he explained his hypothesis to me. He said something like “Chicago is the third largest metro in the country, boasts world class universities such as Northwestern and The University of Chicago, and has among the most Fortune 500 companies headquartered there. Pittsburgh has a top 10 healthcare system in UPMC, a top 3 computer science and engineering school at Carnegie Mellon, and advanced R&D in such areas as autonomous driving and robotics. Why would there not be great startups in these markets?”

Yep, same hypothesis as mine. And he wanted to hustle around to markets all over the US, finding great founders and helping to build important companies. So I invested with him and helped as much as I could as he built a strong portfolio and proved out “our” hypothesis.

Our Hypothesis: Genius and Talent Exist Everywhere. The Next Great Companies Do Too

That brings us to today. Building on foundations we’ve laid over the past few years, Bong and I, together with John, Chelsea, Justin, and Nancy, are launching Hypothesis. Hypothesis will support and invest in mission-driven founders in emerging ecosystems across the United States.

We don’t need another Bay Area-focused venture firm. But we absolutely do need smart, value-added company builders, investors, founders, mentors, and cheerleaders in domestic emerging markets across the country: Boulder, Portland, San Diego, Austin, Dallas, Chicago, Pittsburg, Atlanta, Philadelphia, DC and on and on. This is where the next wave of innovation is already happening, and where new pioneers are already building the future.

Being a pioneer can be lonely. I know because I’ve done it myself, moving to China when I was 21, long before China was cool. These days though, it doesn’t have to be so lonely. Reach out to us at Hypothesis and let us know what you’re building. We’d love to hear from you.



Peter Brack

VC. Former founder. I write about lots of stuff, but mostly tech, management, and social issues. More about me here: https://hypothesisvc.com/team/#peter-brack