I have a new appreciation for the advantages of being in a big city since moving to Tokyo recently. That said, my while I'm an occasional visitor in Silicon Valley I hold a passport from Bootstrapistan, and most of its population resides in the capital city of A Small Town In The Middle of Nowhere. [+]

A representative sampling of locations of the "head office" from small software businesses that I'm socially close to: Ogaki, Philadelphia, "way in the boonies in West Virginia", "way in the boonies in Idaho", "way in the boonies in Florida", Nuremberg, a small town in Italy whose name I am blanking on, etc etc.

There exist plenty of happy software companies in the big metropolitan areas -- and God bless them -- but they aren't the whole of the solution space.

[+] Why? Interesting question. Some days I think this is just a pure coincidence and some days I think that the low implied burn rate for the founders and generally low opportunity costs makes it easier for the business to hit both pro-forma profitability and "successfully outcompetes best available alternatives on the local labor market" profitability. Bootstrapped businesses can, of course, pay for an apartment in the Mission and exceed a Google PM's salary in Mountain View, but those are much harder bars to hit than "beats the snot out of any job available in Ogaki."

> Why? Interesting question. Some days I think this is just a pure coincidence and some days I think that the low implied burn rate for the founders and generally low opportunity costs makes it easier for the business to hit both pro-forma profitability and "successfully outcompetes best available alternatives on the local labor market" profitability.

I've always thought that when I was ready to bootstrap my own startup, I'd do it from a rural farm property. You can fly to meet whomever you need to face to face for networking, and with extremely low costs of living, your run rate is close (but not quite) to zero.

Thanks for confirming my thought!

Small town in Italy? If you're talking about Balsamiq and Peldi, near as I can tell, he/they are in Bologna:

http://en.wikipedia.org/wiki/Bologna

I suppose that compared to Tokyo, most anything could be considered a small town, but in Italy, Bologna isn't.

Quibbling about details aside, I think your point is a good one, although I also believe there are definitely two sides to it. The case made in this book is convincing that cities are a lot better for the sort of "spontaneous idea contamination" that can lead to big things:

http://www.amazon.com/The-Geography-Jobs-Enrico-Moretti/dp/0...

Things get even more complicated when families come into the picture: a beach town in Morocco is not my own idea of the place I'd like to live with mine, although I certainly wouldn't mind an extended vacation there.

There are a lot of things I don't care for about my hometown in Oregon (THE WEATHER!), but I do find that I'm pretty partial to the mid-sized (which for me is something like 100K-400K, depending on various factors) university town like that where I grew up. I like being able to chat with people about programming over drinks from time to time, or talk about business, or have a variety of local businesses. On the other hand, with a family and not wanting to work for a BigCo, I'm not really interested in big cities any more.

Nürnberg isn't that small if you count in the other directly adjacent cities (1.2 million inhabitants) or even the whole metropolitan area (3.5 million inhabitants) https://en.wikipedia.org/wiki/Nuremberg_Metropolitan_Region And you are in 1 hour 20 minutes in Munich via train.

So I would argue that this is already pretty central

Philadelphia is also not a small town and is a short train ride to NYC and Washington D.C. I think more generally Patrick's point is that they aren't from tech hubs and that there is a reason for that.

"Hm, sorry but ages of experience show that what mostly works is the other way around …"

I think it is a business by itself: you pay for your exotic startup location. What we just read is a travel agency that focuses on startups.

I agree with atmosx, that towns are better suited for startups. When we worked on our startup many years ago, one of the largest obstacles for investors was the location: a mid size sleepy town, away from where the money is. One reason for it was of course, that investors back then didn't get what internet means (they still don't). The other reason is, they want control. If their investment is out of reach, there will be no investment.

Uhh, funny idea: take their cash and disappear to a moroccan beach. Sounds certainly nice, but looks so bad.

Same experience here. Investors like to be close to their money. Being in a city that is easy traveling distance from a major international airport hub means that any investor in the world is one plane flight away. being one short hop beyond that means the number of available investors becomes limited to the people who are very local.

Even then.. Are the airports in NYC, SF or Seattle really that much better than say Portland, Denver, Boise or a number of other smaller cities that aren't as packed?

Yes - they're talking their book. Which would survive a VC funding round better: Two startups with a similar very far fetched idea - one asks for $10mm to continue in the valley, the other $5mm in Morocco?

The valley one, but odds are it'd burn through the cash faster.

It doesn't need to be all or nothing... Portland, Denver, Boise and a bunch of other places are still cities while still able to provide some nice quality of life features over the likes of Seattle, San Francisco or New York City.

You can have a much shorter commute. Lower cost of living. And some really nice community aspects.

I've never understood why the likes of Facebook or other large tech companies wouldn't build infrastructure in the some of the smaller cities as opposed to already over-crowded and much more expensive cities.

Intel and Motorolla built out in Chandler, AZ which brought in a lot of technology companies and built the city to what it is today. It makes perfect sense for a large company to do the same someplace with a limited market where they can build out a community.

I agree. I love that some of the important early PC game companies started in places like Shreveport, Louisiana.

Couldn't agree with this more. I worked for a startup-turned-recent-exit, and despite their big growth after a few years, if you go back and look at the first hundred customers or so, they were nearly all locals in the non-Silicon-Valley city the company was formed in, from other small shops to some of the bigger companies. Unless your product is niche to small fishing companies, this advice may not be the best.

"Unless your product is niche to small fishing companies, this advice may not be the best."

Yet the competition space for very young rich urban american white kids making products for very young rich urban american white kids is hyper crowded, and in "rural fishing communities" the marketplace is apparently nearly empty, so the odds of a big success appear much better.

There's a fad now of "home automation" as defined by a small ARM box with a thermometer and a microphone for $100 that does pretty much the same as the 20 competitors... you have a less than 1 in 20 chance of being the top dog alpha winner. On the other hand AFAIK there is no competition for "www.rate.your.diesel.fishing.boat.mechanic.com" social network shopping for diesel fuel filter group buy advice or whatever. And that idea only took ten seconds, I'm sure actually trying would result in better ideas.

Your odds of competing are higher if you stay in the city and follow (key word, "follow") the pack. Which is awesome if your goal is playing king of the hill and the sheer thrill of competition. On the other hand, if you want to make fat stacks of cash, you want the best odds of winning, not the best odds of being involved in an epic competition.

Just think! When you've built the app and captured 100% of the diesel fishing boat mechanic rating market, you'll make dozens - nay, hundreds - of dollars! Users could search, sort and filter all 6 diesel fishing boat mechanics in town!

I'm being sarcastic but you're right. I live in a small town (in a small country) and there are a lot of unmet needs that software could address, and minimal technical competition. The other side of the coin is that the market is small, and capturing lots of geographically disparate niche markets is hard. Even nth runner up success in Home Automation for Rich People in Big Cities is a lot of money.

Innovating in small markets is fun and part of the reason why I'm here, but big markets are competitive for a reason. The adages about small startups being just as much work as big ones, and owning 1% of $10^9 being better than 10% of $10^6, still apply.

Oh I wouldn't say its a small market...

Some googling around shows 8 million people in NYC. Figure about 1% are in the 1%, so you've got maybe 80K possible customers to split among all home automation startups.

On the other hand, some googling around shows 4 million commercial fishing boats worldwide. If your diesel boat engine microphone troubleshooting crowdsourced social network repair app drew in only 10% of ship owners, that would be a 5x bigger hit than the entire home automation marketplace. Also don't forget that ship owners who don't have money are what are called former ship owners... these guys have serious cash or they wouldn't be throwing money into a hole in the water like boat owners do.

you're right. go find a country where producers and true capitalists are rewarded and powerful, instead of just the middlemen and managers, and you'll be a millionaire.

That time will come. And once technology starts being targets are making these SMEs (fishing boats, smallholders, etc) lives easier, the world will make a big shift for the better.

That might make small towns better if you want to start a "lifestyle business" instead of a VC funded startup.

100% of epsilon is still epsilon.

I agree. More and more often you see people choosing a mix of both. Living in a big city when their product requires it, going abroad when they need more focus, or when their in a development stage that enables it. You don't have to be in the same place all the time anymore :)

Yep, I live deep in the mountains and travel to cities when I need to. Works well. Better than anything I did before anyway. It also gives a good perspective on what happens when you fail; nothing.

A mix of both is optimal IMHO and even somewhat dream-like situation but today (more than ever before) it IS possible.

You're optimizing for growth, the article optimizes for happiness. Depends what you're looking for in life.

I think there are ways to understand people using written language that do not translate well face to face. It's a fairly subjective evaluation, but consider the whole spectrum of human writing, rather than the tendency of conversation evoked by the contemporary internet.

I also agree with this, the biggest problem I got being in nice but small town is finding good people with the correct skill set.