I hear this refrain quite often from consumer Internet entrepreneurs on the East Coast. "If we were in the Valley we'd have raised money in no time, but people here don't get us." This is a kind lie, and it is time we rid ourselves of it. You're not getting funded because your idea stinks, the way you talk about it stinks, you stink, or VCs in general stink - but it's not because you are in Boston, New York, or DC... not anymore.
Scott Kirsner's article in the Boston Globe this Sunday (where I was quoted), or his follow-up piece with George Zachary of CRV on his blog both give this feeling of impending doom for consumer folks on the East Coast. But I think he's being overly dire.
It IS harder to build a consumer internet business in Boston. You get this constant nagging feeling that you're missing the kind of impromptu meetings with like-minded folks that provide inspiration -- that's why I support efforts like OpenCoffee so much. And he is right when he says:
Having just boomeranged back to Cambridge after spending two years in San Francisco, the lack of consumer tech activity here is startling to me -- it's like going from a noisy, hot, crowded bar to another across the street where the bartender has plenty of time to wash glasses and gab with the three regulars perched on stools.
But the fact that it is harder is nothing new. That's like saying, "the financial industry in Boston is still not as big as New York's." That's not news, that's reality. I think what IS news is that it is much easier to run a consumer business on the East Coast than it used to be. There are more of us for one, and location is much less of an issue for funding.
As recently as five years ago most VCs invested locally exclusively, but that is becoming increasingly rare. Today plenty of west coast firms, from Redpoint to Sequioa to Kleiner Perkins, invest in east coast companies. Three of the most famous consumer internet investors are not even in Silicon Valley. Brad Feld (Colorado), Josh Kopelman (Philly), and Fred Wilson (NY) make it a point that they will go anywhere for a good company.
But the reverse is happening too, Charles River, Matrix and Venrock are bi-coastal, and guys like Bijan and Will seem to be doing as many deals in Seattle, NY, and LA as they are New England. All that is to say that VCS are getting better at not making excuses based on location, and so should we entrepreneurs. If you are down the VC road and aren't getting the reception you want, first check yourself, then I encourage you to have no fear and get your ass on a plane to hunt down that deal.
Conduit got fairly close to moving (none of us have much family here, and I'm sure the house would do well in any market) but we decided Boston was the best place to build this company. Some of our reasons for Boston were:
1) Much easier to hire excellent engineers. Google and a few others have sucked all the oxygen out of San Fran, and that's why they are trying to recruit here now.
2) Easier to get mainstream press attention. While getting Techcrunched and Digged is somewhat harder, New York is a huge asset when it is time to access mainstream TV and print. I've seen this first hand.
3) Our personal networks. Our personal networks are much stronger in the Northeast since we've all been here. While no one had family to tie us to Boston, your network matters a lot when building a company where you want the coolest folks you can trust, and their friends.
4) Silicon Valley is not our customer. We aren't building a product for the Techcrunchers, and it's easy to get caught in an echo chamber in the Valley. We're trying to break a bunch of rules on how people interact with games and virtual worlds on the web - so over-exposure to those rules could be a burden. Admittedly, this one is speculative.
5) Higher quality young folks. This one might be a bit controversial, but there is a certain kind of person, let's call him the "start-up whore" that I really hate. These type of people hop from one start-up to another just looking to diversify their stock pool and play a kind of celebrity start-up game. This dis-ingenuousnesses is cancer on a young start-up, and Silicon Valley attracts a shit-load of these types. By and large in Boston you get a much more genuinely entrepreneurial group when you actually find them.
Anyway that was our personal choice, and there was also a solid list of negatives to locating in Boston. But fundraising was never one of the big reasons to move to the Valley.
UPDATE: A couple emails pointed me to a post by Fred Wilson that brings up a much broader point than I was attempting -- silicon valley does not, perhaps, increase your chances of overall success.