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Response to Paul Graham on Startup Hubs

Paul Graham just posted a lengthy post in response to my on-stage rebuttal to his talk at FOWA. I disagreed with what he said during his talk at FOWA so I felt compelled to stand up on-stage and respond very quickly.

One of the main reasons we organize FOWA London is to encourgage people to build web apps here in Europe. We want people to feel encouraged, equiped and connected after the show. Saying “Well, you’ve got a better chance if you just move to Silicon Valley” makes my blood boil. It just isn’t true.

I won’t try to summarize his post here, as that wouldn’t do it justice (please take a minute to read it). However, I’ll try to explain why I think he’s wrong.

Silicon Valley vs The Rest of the World

In Paul’s talk at FOWA, he essentially said that startups have a better chance of succeeding if they are located in a ‘Startup Hub’ – a city where there is a large amount of support (funding, legal, news coverage and social). I fully agree – startups have a better chance at succeeding with support.

But I don’t think that’s the whole story.

I just spent 14 days travelling around various cities in Europe on our FOWA Road Trip. I shook a lot of hands and had a ton of great conversations with folks who are building web startups.

It was amazing how many people are launching web apps outside the US / English speaking market. They’re excited, motivated and many have already launched their apps. These folks are getting more and more support from movements like Seedcamp and investors like 3i, Index, Advent and Accel.

Events like FOWA, dConstruct, Mix and Max are also equipping people in Europe – the level of support is skyrocketing. There are also a ton of BarCamps and Open Coffees sprouting up. Not to mention the excitement around mobile (Mobile Mondays, Sweedish Beers, etc).

It seems crazy to discourage that growth by saying that people should move somewhere else. How can we get to that critical level of support here in Europe if we always have people saying everyone should move to Silicon Valley?

Look at (£140 Million!) and moo – if you ever needed an example that you don’t need to move to Silicon Valley, they’re surely it. I’d like to also humbly put forward DropSend. We’ve managed to succeed and we’re not even in London.

100 Million vs 1 Million

Paul didn’t clarify in his talk or post whether he was referring to startups who are funded or those that are boot-strapped.

This is a vital issue to clarify. If a web app is boot-strapped (as DropSend was) you really don’t need to move to a startup hub. Why? Because if it’s a decent idea and you’ve got a little bit of business sense, you can turn that into a product that is worth upwards of $1 Million (depending on the idea and market). If you’ve thrown $35,000 at a web app and you can eventually sell for $1 Million, that’s a pretty damn good return on your investment.

That’s the crux of my frustration with Paul Graham’s attitude. I almost felt as if he was saying “Yeah, for you little guys, you can stay wherever you are. But if you want to be a real startup and play with the big boys, better get yourself over to Silicon Valley.”
There’s way too much pressure in the web app industry to be the next $100 million dollar company. Screw that. Let’s all focus on being passionate about our great ideas and growing them into viable, profitable businesses. There’s nothing wrong with that 🙂

Paul’s a smart guy, but just because he says you need to move to Silicon Valley doesn’t mean it’s true.

I’d be interested to know what you think – looking forward to the discussion 🙂

(Thanks to for the photo)

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