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

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