High-Tech Start-Ups Put Down Roots In New Soil

ThousandStars writes "The Wall Street Journal says that 'High-tech start-ups are increasingly setting up shop in places previously not known for attracting high-tech firms. A number of cities, such as Kalamazoo, Mich., and Toledo, Ohio, are offering grant money and tax breaks to high-tech start-ups, just as the usual venture-capital hot spots, such as Silicon Valley and Boston, continue to see a pullback in venture lending.""

Comments

better places to work

[KingFeanor]

I work for a big tech company from a small city in Wisconsin. It is great. For the company, office space is cheap, internet access is cheap, energy is cheap, salaries are less than in big cities and employees are still happy. As an employee, I'm happy since I don't have traffic nightmares getting to work and home (I have a whole 5 minute commute), the cost of living is low (I live in a remodeled 3 bedroom home that is worth $120K) and in a small office (200 people) you can know everyone by name. It is a win-win deal for a tech company to locate outside the major tech areas.

Re:better places to work

[Anonymous Coward]

I grew up in WI, lived in Seattle for seven years, and am now in San Francisco. I'm fairly familiar with the laws regarding businesses in all three states; I started an LLC in Seattle that I never really did anything with due to my day job, while now I've been completely dedicated to a personal project for eight months and am looking into starting a real business out of it. While there are trade-offs between WA and WI -- WA has better business and tax laws, while WI has lower cost-of-living in many cases -- CA is quite clearly dead last in starting a business where physical proximity to other particular businesses or people isn't a key factor to success. I now thoroughly understand why my former employer moved their entire business, including providing handsome travel and housing packages for then-current employees, from the Bay Area up to the suburbs of Seattle.

The first big warning sign was when I saw that along with other fees and taxes, a CA LLC with absolutely no income is charged an $800 fee by the state every single year. This is four times or more of the initial fee in other states, and most other state only charge a legitimate filing fee for subsequent years -- along the lines of $50. The business taxes, plus the sales taxes, plus the income taxes, plus ridiculously high cost of living all add up to a massive inequity in ROI compared with other locations, and in return you get to live in a state on the verge of bankruptcy and your non-local business gets essentially no boost in sales due to its location. The single reason why I'm considering incorporating here is because if my business doesn't work out, this location has more jobs for my somewhat unique specialty compared with other locations. I can only see that lasting for so long, though.

I'm with Paul Graham on this: it won't work.

[bADlOGIN]

Check out How to Be Silicon valley (http://www.paulgraham.com/siliconvalley.html).

Based on the description of the right environment, we're not talking Kalamazoo or Toledo by
a long shot. Besides, didn't people try this crap en-mass before the dot.com bust?