A Grand Experiment: 4 months in Silicon Valley

This is a bittersweet post to write.  I love Seattle.  I love the people.  I love the scenery.  I love the startup scene and the underdog mentality.  I’ve actually written data-driven posts trying to justify this entrepreneur’s choice to live here.  I’ve cheered on as Glenn Kelman valiantly defended our soggy brand of entrepreneurship.  I actually kinda love the weather.  But over and over again, very smart people tell me that the best thing for my company is to move it to the Valley (see this & this).  The logic is pretty compelling.  Being a founder requires a mix of determination and flexibility.  As I wade into my next company and as I hear stories from my friends down south, I think now is a time to be flexible.  So we’re going to go try the Valley on for size.

As I’ve started to tell people, I’ve had plenty of Seattle folks tell me that I don’t need to go to the Valley to succeed.  Empirically, they are right.  There are obviously successes in Seattle both big and small.  But here’s how I look at it.  Startups are like a big formula.   Maybe it’s “(10 * market) + (7 * product) + (5 * team) + (3 * distribution) + (3 * fundraising) + (10 * blind-ass luck)”.  I suspect that it’s different for each startup.  But I firmly believe that having strong relationships in the Valley adds a meaningful multiplier to important parts of that formula (especially on the fundraising side of things– more on that in a minute).

There are some great investors in Seattle.  We’ll be working with a few (hi guys!).  But as I look forward in my company’s future, I know we’ll be raising more money.  I believe (I hope!) that we’ll be raising based on a “line“.  Whatever trajectory we’re on, it’s nigh-impossible to argue with this fact– any fundraising effort is easier, faster, and more likely to close with better terms in the Valley.  The key there for me is faster.  Fundraising is expensive.  It saps attention from your product and it takes time/money.  The other key is “more likely”.  I’m pretty confident that I can raise money anywhere in today’s market.  But I don’t know where the market is going to be in 12-24 months.  I *DO* know, that if the market goes south, my odds will be strongest in the Valley.  And, while I don’t want to be a “douchey deal optimizer”, the best Seattle terms I’ve heard of are merely adequate in the Valley…  And terms that are good in the Valley are virtually unheard of in Seattle.

Of course, you can raise remotely.  A flight south is a few hundred bucks and kills the better part of a day.  But it’s hard to build relationships when you only fly down once every month or two.

Blind-ass luck is worth talking about, too.  While you can’t force luck, you can increase your “luck surface area”– do low-cost things that increase your shot at something fortuitous happening.  The obvious example here is: be nice.  Help other people and you increase the chance that they run across an opportunity that they drop in your lap.

While it’s not entirely low-cost to move to the Valley, I think it dramatically increases our luck surface-area.  Reporters and bloggers are constantly sniffing around in the Valley.  Well-armed/high-imagination bizdev folks wander around looking for creative deals to strike.  There are investors and portfolio companies wandering around at every event/party.  There are world-class startup geeks in the Valley on every corner (of course, there are a thousand startups all vying for the same talent, too).

A final consideration is optimism.  I’ve often said that startups only die from 1 thing.  They run out of optimism. They no longer believe in the opportunity (or they believe in a different one).  You can run out of money, but if you believe, you’ll find a way to soldier on.  You’ll raise money, max your credit cards, eat ramen, or otherwise do whatever it takes.  Strangely, I think it’s easier to keep your optimism tank full in the Valley…  In the church of startups (with miracles on display for every sermon), you can’t help but believe.

It’s going to be an interesting ride.  Some of my favorite entrepreneurs from Seattle have blazed a trail southward and, despite their apparent love for Seattle, they haven’t felt compelled to return.  I’m going to head south with an open mind and see how it goes.

 

  • http://blog.redfin.com/ GlennKelman

    Good post (tho my name has two n’s), and good luck in Silicon Valley!
    Glenn

    • http://www.rescuetime.com Anonymous

      (fixed) I did that on purpose, Glenn.  I’m still mad that you beat me out for “Best Startup Blogger” at the Seattle 2.0 awards a few years back.  :-)  Seriously, though– you’ve been an inspiration with Redfin.  Keep Seattle warm for me– I’ll be back!

  • http://robiganguly.com/blog Robi Ganguly

    So sad to see you go but excited for what’s next for you. I hope you come back to visit often enough to compare our optimism levels in person :) 

  • Aviel

    We’ll miss you up here buddy :) But it’s the absolute right choice for you. I’ll hold down the startup curmudgeon tradition for you up here while you’re gone.

  • http://www.vittana.org/ Kushal Chakrabarti

    Sorry to see you go, my friend. I’m excited for you on your next journey!

  • http://twitter.com/mikeytom Mikey Tom

    Sad to hear Tony.  You’re one of the guys that I wish I would have been able to connect with sooner or later up here.  Best of luck in the Valley!  Maybe I’ll see you down there or catch you on one of your return trips :)

    ps: I think Koester is actually in DC nowadays

  • Anonymous

    Good Luck Tony! 

  • http://josephsunga.com/ Joseph Sunga

    Bummer you’re leaving Seattle, but sounds like a move that makes sense. Good luck in Silicon Valley!

  • http://www.internmatch.com/blog Nathan Parcells

    Thanks for the post Tony.  It’s not easy to leave a city you love, but sounds like you made the right decision.  When moving to the Bay I was worried that the larger tech scene here would mean less intimacy and entrepreneurial support, but was shocked to find the opposite — the bay startup community is so dedicated to mutual growth it is inspiring to think about how this could be applied in other industries.  

    Congrats on what must have been a really hard decision.

  • http://twitter.com/donalddesantis Donald DeSantis

    Will miss bumping into you around town. I understand the rationale though. I’ll keep my eyes peeled for you next time I’m in SF. 

  • Chris

    congrats on taking the plunge and look forward to crossing paths more frequently in the valley…

  • Adam

    Good luck to you, Tony!  Really sorry to see you leaving Seattle, but I’m sure you’ll do great things down south.

  • http://natala.net natala

    Great post. We will have to have a “Seattlites in SF” happy hour for you when you officially get into town. 

    For me personally, the Seattle Tech Community was awesome — but the energy in the valley is unbeatable. 

  • Jasmine

    The Seattle startup community will definitely miss you. I agree with all the points you made. But hiring good engineers is challenging and expensive in the valley. What do you think about hiring engineers from Seattle? 

    • http://www.rescuetime.com Anonymous

      Hey Jasmine– Good question!  I think Seattle has top notch engineers and there are a mess of them I’d love to hire.  There’s still a very real possibility that we come back north to build and/or scale the business.

      Expense is something that (being in the earliest stages) I’m less concerned about.  Unless your product is incredibly geeky, you don’t need a ton of engineers to take a run at an idea.  Add to that, our founders are designers/devs.  The larger cost down in the Valley really doesn’t still until you start to scale the business.

      Now, the SPEED of recruiting is worrisome.  But then again, that comes later too.  Generally the first bunch of hiring comes from your own network.

      One additional thought…  Seattle might be light on a new flavor of engineer that I think is critical for the modern startup:  The Growth Hacker (see: http://andrewchenblog.com/2012/04/27/how-to-be-a-growth-hacker-an-airbnbcraigslist-case-study/ ).

      • Jasmine

        Hi Adam, I agree that early stage hiring is more of a concern when scaling the business. On the other hand, I feel some engineers have great potential that is not utilized at some big companies around Seattle ;). I believe they could accomplish much more if there are more innovative startups and better ecosystem here. 
        The Growth Hacker is a great meme. Not just for startups, marketing has shifted significantly away from the traditional ways for all businesses. Startup is all about being creative at identifying target users and reaching them. I think you and Adam did great Growth Hacker work for Cubeduel.  
         
        However with the Growth Hacker marketing, particularly the way described in the Airbnb case study, when more and more startups/businesses run bots on these platforms, it will likely get less and less effective. But providing well designed feature and easy mechanism for enthusiastic users to trigger sharing and make the product go viral, is critical for consumer focused startups.

        • Jasmine

          Sorry about the typo. I meant, Tony :)

  • http://www.brandings.com/ Kim Oakland

    Just made the move from Seattle to LA … major transition.  Gotta say that I’m a little jealous.  Would much rather be in SF!

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