Wednesday, April 13, 2011

Tech: On moving to Silicon Valley & Finding Investors

Stephen, Mike, and I are planning on heading to the San Francisco, CA area this summer to continue work on our startup, Babolog. We have quite a few contacts in the area, including some friends at Google and Accel. We're very interested in hearing feedback about people's experiences in the San Fran area. Is it worth the hype making the move? We recently had a meeting with Douglas Eck, a google employee in San Francisco and Stephen recently met with the folks at Olark to discuss the reality of city life.

Our conclusion is, living in San Francisco can be very expensive but very manageable if you live just outside of the city. However, it's important to note that an important reason people move to San Fran is the connections and in order to maintain good connections and be able to meet at a whim's notice, it's good to be local. It's hard to meet with a client for drinks when you have to be on the last train home at 12 or 1am. Another thing to keep in mind is, there are different reasons for moving to Silicon Valley. Some people are looking for talent, some for venture capital or angels, and others simply want to make connections. With social media systems as prevalent as they are, one can potentially launch a startup from anywhere. Babolog, for instance, currently operates out of Vermont.

Software engineers have a unique advantage in their field: the cost of launching a startup is minimal as writing software is cheap (though often time consuming) and there are many open source frameworks which add almost instant utility to your system. One of the largest reasons not to move to valley is, you might not need to. If your project focuses on specific niche groups and you can successfully operate in an inexpensive area, go for it. The reason to still be in CA, and the reason we will almost certainly be heading out there this summer, is not to find talent, but connections, connections, connections. This brings up another important topic which perhaps I'll write more about when I have accrued some more personal experience: acquiring venture capital and funding for your project. For now, here are some interesting reads which I hope give you greater insight on the big question many tech companies lose sleep about, "Should we be moving to Silicon Valley".

Friday, May 20, 2011 - Updates

If you are working with a small group and are looking where to live in the San Francisco area, you may find this thread useful:

San Francisco or Palo Alto for a new startup?

http://news.ycombinator.com/item?id=12290



Additional Sources:

I'm sure most of the folks at HN (YCombinator Hacker news) have already read:
http://www.paulgraham.com/start.html

The cost of living in the San Fransisco area:
http://www.jmorganmarketing.com/how-much-does-it-cost-to-live-in-san-francisco/

Some interesting perspective on incubators, angels, and VC:
http://gigaom.com/2008/09/10/5-reasons-to-move-your-startup-out-of-silicon-valley/

http://venturebeat.com/2011/04/07/5-reasons-not-to-take-a-big-vc-round/

Sincerely,
- Michael E. Karpeles
http://babolog.com

My Mashable Mashup

I decided to keep myself organised by maintaining a list of interesting reads from different news websites. Mashable is fantastic Internet news site with a wealth of knowledge and insight on topics relating to marketing, advertising, business strategy, startups, design practice, and all that is social.

 

Dealing with competition 
Interesting Business Models 
Why Large-Scale Product Customization Is Finally Viable for Business 
by  J. P. Gownder

Where does social media stand?  
The Winners & Losers of Social Networking [INFOGRAPHIC] 
by  Jolie O'Dell

Getting the word out
HOW TO: Spread Your Business Footprint Around the Web 
by Josh Catone


Hope you find these helpful!

Sincerely,
Michael E. Karpeles

Amazon's Social Human Computation Framework

I read a very enjoyable and worthwhile article today on Salon.com by
Katharine Mieszkowski called, "I make $1.45 a week and I love it". It's about the crowd sourcing human computation system called "Turk" which Amazon released back in November 2005.

Here's a summary:

"On Amazon Mechanical Turk, thousands of people are happily being paid pennies to do mind-numbing work. Is it a boon for the bored or a virtual sweatshop"

The article provides some really interesting case studies which speak volumes about trends and incentives in crowd sourcing. The most interesting involved "Aaron Koblin, a student in UCLA's Design/Media Arts program, who was writing his master's thesis about the site" [1]. He offered 2 cents per drawing and ended up collecting over 7,500 which he turned around and sold for 20 for 20$. Read the whole article who see how the crowd reacted! I think the publics' responses will surprise you.

Babo Labs has a few projects of their own up their sleeve which will allow everyone who uses our e-commerce platform to buy and sell more effective. We can't wait to share it with you when it's done!

Sincerely,
- Michael E. Karpeles
http://babolog.com
Babo Labs