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Why Startups Condense in America
bariswheel writes "The controversial genius developer/writer/entertainer Paul Graham writes an insightful piece on Why Startups Condense in America. Here's the skinny: "The US allows immigration, it is a rich country, it is not (yet) a police state, the universities are better, you can fire people, work is less identified with employment, it is not too fussy, it has a large domestic market, it has venture funding, and it has dynamic typing for careers. Inquire for details within."
I used to work for a european university. We had quite an impressive standing in europe, but were nowhere near the top of the list woldwide, which is dominated by US universities. This was a non-US list based on the opinion of academic peers. The list of most funded universities is almost exclusively US and UK universities.
So, as much as I hate chaufinism (either US or otherwise), this is not it but just a basic truth.
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Actually, here in the Netherlands, I have spoken to a few businessmen which deal or have dealt with the US. They all find dealing with the Americans an enormously bureaucratic process. Also note that lots of rules come from overseas from our point of view, Sarbanes-Oxley comes to mind.
To start a company in the Netherlands, you do two things:
- visit the local Chamber of Commerce and spend 10 minutes to tell your new
business its name
- Fill in one (1) form and send it to the (equivalent of the) IRS for a
VAT-number
That's it. How unbureaucrative can you get?8 of 13 people found this answer helpful. Did you?
Mr Graham states that one driver of startups is the fact that America allows immigration. That's at odds with my own story.
When I was growing up, all I ever wanted to do was move to the USA. When I finished school, my parents could not afford to send me to university, so I had to start work straight out of school. I spent 5 years working my way from cable laying guy to networks guy to Unix guy, and then tried to move to the USA. After 2 years of trying, I gave up and moved to the UK.
Next year, I will _finally_ be eligible to apply for an H1B visa, but I won't be. Because I don't have a degree, I need 12 years work experience. The first 8 years of that experience are no longer technically relevant to anything I do today. Sure, it taught me a lot about dealing with people and integrating into the 'real world', but I don't see how that is relevant since I would have been eligible for entry fresh out of university with none of that experience.
Even if I did want to apply, I would have no guarantee of permanent settlement. I would have to 'emmigrate' to the USA knowing that if the company I was working for went under, or declared a loss for a number of years running, or laid off too many other people, I would have to pack my life back into boxes and go home. 30 is too damn old to be taking that kind of chance.
I took that chance coming to the UK at 25, and even then I was almost guaranteed permanent settlement when I moved here. It was certainly never tied to the company that I moved here to work for. At 25, I could take those risks, but not anymore.
So instead of adding to the US economy, I've got a successful life adding to the UK economy. Overall, the US immigration policy is NOWHERE near as friendly as many places in Europe.
Silicon Valley ceased being an engine of significant economic growth after the dotcom bust.
Ahem?
VC Funding by region, Q1 2006
Silicon Valley startups still receive more VC funding than the next four largest regions combined. Why is this? Stanford and UC Berkeley nearby? The pretty scenery? The affordable housing? In part. But mostly, it's because tens of billions of dollars in VC money resides within a few blocks on Sand Hill Road. And for the most part, VCs don't have any reason to leave the area in search of investments. The Web browser was invented in Illinois, but when it came time to found Netscape, the founders moved West because this is where the VC money lives. That hasn't changed.