Blog: Startups

Tech entrepreneur Paul Graham gives his take on Richard Florida with an essay on what a region needs to develop a startup culture. In a nutshell, it's not about office buildings, it's about people - nerds (who start the companies) and rich people (who fund them).

He's definitely oversimplifying - Graham says Pittsburgh fails because the rich people don't want to live there, though Florida's research showed Pittsburgh was less appealing to the Creative Class (including nerds) as well. And Graham clearly doesn't understand why New York City is so great; my personal biases aside, New York is much more than "a hub of glamour, a magnet for all the shorter half-life isotopes of style and fame" where people "pay a fortune for a small, dark, noisy apartment in order to live in a town where the cool people are really cool". There's that culture, for sure, but a lot more, and the fact that Google's New York office drew people from the West Coast and Seattle and Pittsburgh , I think, shows that many nerds do want to live here. Ultimately I think it boils down to the fact that Graham is generally right but it's all a little more complicated than in his model; NYC's expensive real estate and bad weather are obstacles, but Boston's only slightly less expensive real estate and comparably bad weather are overcome by its enormous edge in large research universities with great engineering programs.

Ultimately, though, as a heuristic for understanding the development of high tech centers, Graham's rule is useful. And he's absolutely right when he concludes by saying, "San Francisco and Berkeley are great, but . . . Silicon Valley proper is soul-crushing suburban sprawl. It has fabulous weather, which makes it significantly better than the soul-crushing sprawl of most other American cities. But a competitor that managed to avoid sprawl would have real leverage."

Which one is a Star Wars character, and which a Web 2.0 company? Guess this and more at this hilarious quiz.