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Summary:

Facebook CEO Mark Zuckerberg this weekend set the Internet ablaze with his comments that if he started his social network today, he would stay in Boston. I disagree. His being in Silicon Valley and being able to hire the right people contributed to the company’s success.

harvard

Could Facebook could have started in Timbuktu? Okay I am being a bit facetious, but in order to grow up it still would have needed to come to Silicon Valley, despite what what Mark Zuckerberg said this weekend. At the Y Combinator Startup School, the Facebook co-founder and CEO said that if he was starting Facebook now, he would stay in Boston. He is worried that folks in Silicon Valley think too short term and are transaction oriented.

“I knew nothing, so I had to be out here. Facebook would not have worked had I stayed in Boston. But I think that now, knowing more of what I know, I think I might have been able to pull it off. You don’t have to move out here to do this. But it’s not the only place to be. If I were starting now, I would have stayed in Boston. [Silicon Valley] is a little short-term focused and that bothers me.”

It’s no surprise that his comments got a lot of attention. While I certainly agree that the malaise of short-term thinking is quite well spread in the San Francisco Bay Area and is making people myopic, I still disagree with Zuckerberg’s viewpoint. And to be clear, I am not saying Boston or New York or London or Berlin or Tel Aviv or Shanghai are not good for starting your companies. There is nothing I would like more to see than all those cities become even bigger centers of entrepreneurial creativity.

After living in San Francisco for eight years and with many deep and close relationships, I remain ambivalent. I still think of New York as my spiritual home, more so than my actual birthplace. However, when it comes to the technology industry, the San Francisco Bay Area is the place to work and “work it.”

People + Location

There are certain kind of startups – networking companies for example — that benefit from Boston’s locale. Or media companies from being in New York. But Silicon Valley, at least for the next couple of years, has an advantage — and it is not VC money, which people mistakenly identify as Silicon Valley’s edge, or nearness to Stanford. Instead it is a very high concentration of talent and people with varied skills to accelerate and grow startups, especially those on a break-neck trajectory like Facebook was in 2007.

Facebook benefited from being in Silicon Valley because of the intangibles. How many casual conversations with Steve Jobs would Zuckerberg have had if he was not in the Valley? Or how about access to some amazing team members who helped Facebook on the right track?

The fact is that if there are many downsides to Silicon Valley, there are also upsides to this area. And whatever the faults of the Bay Area might be, one cannot argue with the richness of the talent pool. The talent pool for technology is bigger and deeper, mostly because the area known as Silicon Valley has been in business longer and has been attracting more people by the day. It is no different than Hollywood attracting cinematic talent. The bigger the talent pool, the more likely a company is to find folks with highly specialized skills needed to grow a certain kind of company.

I started following Facebook a long time ago — I wrote about them when they were just getting started, when they were hardly a media darling. They got good solid people in quick succession and that in turn put the social network on the right track. The Valley is where Facebook found the likes of Matt Cohler, Owen Van Natta and Jonathan Heiliger — and these are just the more well-known members of the Facebook team. COO Sheryl Sandberg and CTO Bret Taylor are also from around here. Just look at the sheer number of Googlers that Facebook has poached over past few years — try doing that elsewhere!

However, given that Mark Zuckerberg is headed back to Boston and Harvard on what seems like a recruiting effort, that comment makes for a great soundbite, and probably an awesome recruitment tool as well. And on that I wish him the best of luck.

  1. Excellent post. SF bay area is the best place in the world for technology.

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  2. Sillicon Valley is talent pool area and FB team should look for a Long term view or may plan to expand their operation in Sillicon Valley rather than short term

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  3. I think Virginia Postrel nailed it back in 1997: Silicon Valley is short-term but resilient. http://dynamist.com/articles-speeches/asap/resilience.html

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    1. Nice one to recall. Thanks Kevin.

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  4. I think your LA analogy is a good one…but also, Like LA & NYC the ,industry press, marketing organizations and tools are there because of that “talent pool” and history…
    On the same note… I think Mark would have found the same feeling/opinion if he had stayed in Boston. The grass always seems greener… (As a “bohn and bread”..”Nohrth Shoah” guy.. I am Boston to the core..but know my city, it’s politics and business community better than Mark. It’s beautiful but it is also a company town ruled by “academic experts”, cold business and politics. Long term goals/vision here aren’t exactly what he thinks they are.

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    1. Thanks for your personal insight there. I appreciate it. I am sure so do our other readers.

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  5. I’m not sure if Mark was referring specifically to Boston or merely to the possibility of forming a successful tech company outside of Silicon Valley, but if it’s the former, I think he may have a point.

    I’ve recently attended a couple of conferences and meetups in Boston, and I’ve been amazed at the depth of talent and the truly creative startups that have emerged in the city (like Bocoup), with staff who contribute to leading open-source projects, particularly in Web technologies (e.g. jQuery). While I’ve been away for about 10 years from the city, I have to imagine that this transition did not happen overnight, so I suspect that, had Mark known then what he knows and sees now, he might have been able to grow Facebook in Boston, rather than Silicon Valley.

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    1. Based on what I saw of Mark’s talk, he was agreeing with most of what this article says, but just saying the same general statement as Vasken; that there are other communities besides SF that may serve startups very well in many of those same regards.

      I don’t think anyone is questioning SF’s top rank in the list of “Valleys” though.

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  6. George Harrison Thursday, November 3, 2011

    Life goes on within you, and without you.

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  7. The Zuck quote you highlight — and the thrust of what he said — concurs with your title. Not sure of the purported disagreement.

    What’s probably realistic is this: if Mark both knew then what he knows now, *and had the contacts then that he has now*, indeed he could have taken a whack at Facebook from anywhere. Who am I to slight? But frankly I think contacts trump knowledge. Billions in cash would help too.

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    1. Yes and no. I think in hindsight he can make that comment. I disagree that even today he can pull in that kind of talent resources in a non-SV locale. I don’t say companies can’t be built elsewhere, but there is a whole unique set of things that happened for Facebook because of its location.

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  8. Zuck’s not alone in his opinion, and there are plenty of startups whose successes bear witness.

    Joel Spolsky, founder of Fog Creek and Stack Overflow, has long been on record that Silicon Valley isn’t the be-all-and-end-all of entrepreneurship. See the first video here, specifically starting at 4:55: http://techcrunch.com/2011/03/13/founder-stories-spolsky-startup/

    And the CEO of Vitrue (where I am the Director of Product Management), recently weighed in on the issue on VentureBeat: http://venturebeat.com/2011/10/31/startups-outside-silicon-valley/

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    1. John

      I didn’t at any point say the startups cannot be done outside of Silicon Valley. I am talking in terms of Facebook and in terms of general availability of talent. Point I am making is that companies that are growing at a certain speed and are of a certain kind like Facebook and Google are benefit from being in the “hothouse.” I know there is a startup world outside of Silicon Valley and I am not that obsessed about the SV. However, there are inherent advantages – talent pool being one of the biggest one. IN three years I expect NYC or BErlin to have negated that advantage.

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      1. I think it’s important to understand what Mark DID say. He said Facebook would have failed had he not moved to Silicon Valley. The reason? Because he had no idea what he was doing and SV offered the immediate resources to help young, clueless and ambitious entrepreneurs.

        What he did say is that, had he known THEN what he knows now, he would start it in Boston and would be successful. And knowing the huge amount of talent that is in Boston, and knowing what you’re doing…I think he was right on the money.

        The lesson. If you are just starting out and looking to start a company and new to the game, SV is the place to be. If you’ve got the experience and know-how, Boston (because of the huge amount of talent from Harvard, MIT and other local schools) or other locations like NY..is as viable a place as SV…and as Mark pointed out, has a number of upsides versus SV.

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      2. Thanks for the reply Om. Sorry if I implied that you’re more hardcore on this issue than you are.

        I think the level and depth (and amount!) of talent to be found sprouting out of places like Georgia Tech shouldn’t be underestimated. Not to mention the (lower) level of resources it takes to satisfy the standard of living for that talent.

        Anyone seriously thinking about the issue will realize that there are trade-offs no matter where you are. For example, in Atlanta we benefit from a robust university community with not only Tech nearby but also Georgia State, Emory, and the Savannah College of Art and Design (SCAD). Not to mention the established corporations that have their own benefits.

        What’s the threshold of age and size for a company to “graduate” from the Valley? Notably, Google lives in old SGI caves, and Facebook is moving to Sun’s former home in Menlo Park. How many venerable, large companies still reside in the Valley? I’m asking out of some ignorance, with Google right there at the top of my browser. Apple is one that comes to mind, but the only one. Perhaps as FB and Google age that impression will change.

        I would wager that most entrepreneurs outside the Valley think about this a lot, because they have to answer the “Why aren’t you in the Valley? Shouldn’t you be in the Valley?” question a lot. Because of that constant refrain, the consensus gets generalized to “every tech startup should be in the Valley”, which it sounds like you would agree is just not true.

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  9. There are pluses and minuses to any location. But the thing that makes Silicon Valley unique is the opportunity for interaction with people who can help and support your company. That may be VCs. But it also is engineers, advisors, mentors, accountants, lawyers, etc. that are experienced working with Tech start ups.

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  10. Like a lot of the things he says, I believe it reflects his life and him, not the company…almost as if it’s a FaceBook status update.

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