For years, startup founders have flocked to Silicon Valley to build companies with idyllic dreams of large rounds of funding and huge exits. Some call it a mecca, others call it the only place to get in front of the right people, whether that’s potential co-founders, those who can provide funding or fellow entrepreneurs who know how to strike the right work-life balance.
The reality is, though, that startups can thrive almost anywhere else – and often better. Just recently Seattle was named the top tech city by the Atlantic, beating out Silicon Valley. (Portland came in fourth, just ahead of Austin, San Diego, and Boston.) For many VCs and entrepreneurs, this is not much of a surprise. Though it’s true many investors are in the Valley, Seattle is home to not only tech giants that cultivate new ideas, but also a culture that is attractive to those who wish to do more than just run a company.
Barry Crist, VP of Opscode and previously CEO of Likewise (which was successfully sold to EMC Isilon in September 2012) moved to the Seattle area from the Bay Area after realizing it was a “a better place to work and raise a family without any real downside if you can embrace the drippy spring months.” As he explained, “Our personal experience in the Bay Area was that too many things were expensive and crowded.” He named housing as one of these things, and that other problems were getting kids into daycare and pre-school. The Seattle area is also much better in terms of work-life balance. As he said, “driving to the mountains in the Bay Area, which are amazing, has evolved from a four and a half hour drive into what can take eight or nine hour ordeal or worse with a bit of weather. The Seattle-area has its own issues but they don’t compare.”
Crist also found that the tech industry in Seattle is much better for startups than in the Bay Area. “The Seattle tech world is smaller and more accessible than the Bay Area but still energetic. It is easier to navigate the key players, investors, and markets. Comparing San Francisco to Seattle is a great analogy. Both are great cities across multiple dimensions, but it is simply easier to get your arms around Seattle because of the size. Seattle really is the “Goldilocks” tech market. If a market is too big, then it can be difficult to navigate or make an impact. But if a market’s too small, you don’t have the critical mass to get the money and talent you need to build a great company. Seattle strikes the balance, making it ‘just right’”.
Kristina Kerr Bergman, Principal at Ignition Partners in Seattle, also agrees that the Seattle area (and Pacific Northwest in general) is a better option not only because of the great work-life balance, but also because there is no shortage of great talent in the area due to the prevalence of companies like Amazon, Microsoft, Adobe, Google, and other growing startups such as Apptio and Tableau. She’s seen that turnover is less in the area, and also a huge upswing in the growth of incubators and shared workspaces such as SURF and The Hub. Bergman also said that she’s seen people relocate from the Bay Area to Seattle and Portland due to the cost of living, where she explained “you can get more for your money. When you’re in Seattle (and places like Seattle), employees job-hop less and stick around longer. In Silicon Valley they move around in rapid succession.” As she says, this cost of talent and lack of talent churn are the two biggest reasons that startups should stay in the Seattle area. She also notes that people in Seattle are more “grounded to what the rest of the world is like.” As she explains, “People in Silicon Valley become victim to confirmation bias. For example, more people have Android and PCs than other types of devices and entrepreneurs need to be cautious that the Valley is not like the rest of the world.” However, she says “the Pacific Northwest is so varied in its industries and demographics so you get a better grounding of what [average] people are like.” This understanding ultimately helps build better companies with more successful products, which is more attractive to VCs from the area.
While the Seattle area is known for giants like Amazon and Microsoft, it’s not just the big companies that have been successful in the Northwest. Startups such as Likewise , Appature, AppFog, StorSimple and Azaleos have also successfully been acquired by other companies. Despite this success, there is still the notion that startups need to relocate to Silicon Valley to succeed – even despite the availability of VCs looking to invest and a burgeoning community of others who are like-minded in the Seattle.
To really drive this point home, Debbie Landa of Dealmaker Media started the GROW Conference three years ago, which is held in Vancouver, B.C., to get people out of the Valley and into what she calls “neutral territory.” Landa said “I had this epiphany that innovation is everywhere, yet everyone is running to do events in the Valley. Everyone is trying to meetings there, yet everyone is canceling.” She was inspired when she realized that “the minute you go outside the Valley – even just at events like SXSW – the people that go from the Valley give you 100% of the attention and they’ve opted in to talking to you.”
While the GROW conference is only for two days again this year in August, it might just be enough to give founders from Silicon Valley a taste of what it’s like to be from somewhere where there is more opportunity for the company – and what it’s like to be successful without being suffocated by an inflated cost of living, flaky employees and investors who care more about money than anything else.