Paul Graham’s Reasons to Move to Silicon Valley

Stylized map of Silicon Valley showing logos of prominent tech companies

In Paul Graham’s latest essay — Why to Move to a Startup Hub (I don’t know why, but the title sounds a little “English as She is Spoke”, doesn’t it?) — he explains his reasons for stating that startups would do better if they moved to Silicon Valley. This is in spite of the fact that Boston is his home (and the home of his startup funding company, Y Combinator) half the year:

Y Combinator alternates between coasts every 6 months. Every other funding cycle is in Boston. And even though Boston is the second biggest startup hub in the US (and the world), we tell the startups from those cycles that their best bet is to move to Silicon Valley. If that’s true of Boston, it’s even more true of every other city.

Among Graham’s reasons for startups to move to the Valley:

  • Silicon Valley is a tech center. Just as you’d want to move to New York or L.A. to launch your entertainment company, you want to move to the Valley to launch your tech company.
  • Silicon Valley-based investors are more aggressive. Consider Facebook’s case: “Facebook was started in Boston. Boston VCs had the first shot at them. But they said no, so Facebook moved to Silicon Valley and raised money there. The partner who turned them down now says that ‘may turn out to have been a mistake’.”
  • The concentration of tech in Silicon Valley is also a plus: “In addition to the concentration that comes from specialization, startup hubs are also markets. And markets are usually centralized. Even now, when traders could be anywhere, they cluster in a few cities. It’s hard to say exactly what it is about face to face contact that makes deals happen, but whatever it is, it hasn’t yet been duplicated by technology.”