Can You Buy a Silicon Valley? Maybe.

February 2009

A lot of cities look at Silicon Valley and ask "How could we make
something like that happen here?" The
organic way to do it is to
establish a first-rate university in a place where rich people want
to live. That's how Silicon Valley happened. But could you shortcut
the process by funding startups?

Possibly. Let's consider what it would take.

The first thing to understand is that encouraging startups is a
different problem from encouraging startups in a particular city.
The latter is much more expensive.

People sometimes think they could improve the startup scene in their
town by starting something like Y
Combinator there, but in fact it
will have near zero effect. I know because Y Combinator itself had
near zero effect on Boston when we were based there half the year.
The people we funded came from all over the country (indeed, the
world) and afterward they went wherever they could get more
funding—which generally meant Silicon Valley.

The seed funding business is not a regional business, because at
that stage startups are mobile. They're just a couple founders with
laptops.
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