Well, no, because if we're talking about an internet startup, location is significantly less important. The nature of acting requires a physical presence in a particular location (i.e. the stage), but an internet-based startup has no such requirement. I can just as easily create a company in Amsterdam as I could from SF.
One of the major benefits that's routinely touted is access to VC/angel. Something that most people forget is that the odds of getting such investment are relatively small and most start-ups thrive without it.
The fact is if you are building a consumer startup & you want to get big, you're going to need funding unless you want to charge people & curb your growth.
If you want to increase your likelihood to get funding, you have to be here in the Bay Area.
The odds of getting VC are low -- only 1 in 400 pitches result in funding. [1] Of course, this number doesn't include the number of people who were rejected before they even had a chance to pitch a VC.
I'm not sure why charging people is considered to be a shocking idea. A business is supposed to charge people, or find another way to make money, such as smothering eyeballs with advertising. I'd rather have a profitable company that has positive cash flow and a sustainable growth rate than a "big" company with a ton of freeloaders and external investment.
If you're going to cite Twitter and Facebook as an example, the odds of you creating a similar company are akin to finding Willy Wonka's golden ticket.
VC just isn't available or necessary in the vast majority of cases, negating the need to be in the Bay Area. Bear in mind that VCs are all over the place, from Boston to New York to London. The benefit you cited elsewhere that it's fun to be in the Bay Area is, however, the most compelling.
The only true blue benefit I can see to even being in the US is access to better payment solutions, and possibly a culture that better supports brazen entrepreneurialism.
"I'm not sure why charging people is considered to be a shocking idea."
A few thoughts. One obviously is taking the social proof of what others are doing and copying it.
The other is that "if you don't have anything good to say, don't say anything at all". So having revenue of $0 is better than having revenue of $15000 (2nd number arbitrary just trying to illustrate that by showing a number you are likely to be judged differently then if you never charged at all and can point to eyeballs or signups and have the focus on that).
"If you're going to cite Twitter and Facebook as an example, the odds of you creating a similar company are akin to finding Willy Wonka's golden ticket."
Most people I know doing startups especially in the Bay Area want that golden ticket. Odds are very low but that's what people aspire for.
Taking it to basketball analogy.
There are millions of basketball players out there and all of them aspire to one day play in the NBA. Chances are slim since there are only about 450 players in the NBA in a given season.
"The odds of getting VC are low -- only 1 in 400 pitches result in funding"
But you are pitching more than 1 VC.
Rose said "VCs invest in roughly 1 out of 400 companies who pitch them." and it's obvious he means "an individual VC".
Most importantly (something I try to point out with respect to dating as well or anything where success is essentially "1") you are looking for 1 person/firm to believe in you.
You're right. People should be clearer when touting the benefits of SV. It's really about VC-backed startups that require venture capital (VC's are notoriously adverse to funding faraway startups) and that require access to talent that's willing and able to work 70+ hour weeks face to face with other hackers and entrepreneurs.
There are exceptions, but that's the general model and people have made billions with it so arguing against it is an uphill battle.
From the summary, it doesn't seem to imply geographic location is necessary for founders of start-ups, but more employees. It may even be becoming less necessary as companies are increasingly able to have a distributed, virtual workforce. Some of the most interesting businesses have employees that have never met -- Automattic is one that readily comes to mind.
It does look like an interesting book though and I'll grab a copy.
What the summary - and the book - is saying is that living in 'innovation hubs' is good not only for programmers, scientists and the like, but also for 'ordinary folks' who provide services to those people working directly in 'innovation'.
I've thought about this argument before, and I realized that it just doesn't make sense. It's probably the most delusional way to describe building a business.
Lest we forget, the old way of charging for something still works. In fact, with the internet, it's extremely easy to reach a huge international audience. Customers don't give one shit where you live.
If you are trying to get a lot of big investors for your social platform that has to explode, sure, SF/SV is probably the absolute best for that, but you can start a business anywhere.
This is like asking the success rate of an actor/actress in LA versus in other cities.