Will Price , a partner at Hummer Winblad Venture Partners, asked the question "Does Geography Matter?" in reference to Silicon Valley's gravitational pull for technology start-ups. He references Michael Porter's article "Clusters and the new economics of competition" (Harvard Business Review Nov/Dec 1998) and says
"The most important insight for me is that the modern economy competes on innovation and that operating within a cluster shortens the cycle time to identifying, resourcing, and realizing areas of need and opportunity.
The genesis for this post was a conversation I had with two founders, currently based in Atlanta, about the merits of moving to the Bay Area to start their company. Michael Porter's thoughtful analysis helps me better understand why the Bay Area 'cost premium' is well worth it. Market cap is a function of innovation and growth, and innovation is a function of access to ideas, talent, and supporting resources that eliminate frictions and catalyze connections and progress."
What I found curious is that he mentions two founders from Atlanta that about the merits of moving to the Bay Area to start a company. Atlanta needs those 2 founders to stay here and build their business. I don't have any idea what the company does but I do know that in order for Atlanta's technology community to hit critical mass we need to retain homegrown talent. Those 2 founders staying here helps me, you, and the start-up that is 6 months away from being founded. Atlanta has the ideas and talent. Supporting resources? Maybe not so much.
"Many of you know that we at Noro-Moseley have spent the past year raising our sixth fund. We have had met with at least 70 groups in the U.S. and in Europe. What you’re looking at above was one of the questions most posed to us. After all, we are a regional early-stage and early-growth venture fund focused on the region - who better than us to know?...
...What I wrote above sounds like its a great world class story save for three things. First none of the companies remain public. ISS will not be Cisco. It’s now part of IBM. Ciphertrust is part of Secure Computing. All of the major public Internet security companies are based in the Valley. Second, why is RSA, far and away the largest trade show for Internet Security, in San Francisco? Why isn’t RSA located in Atlanta, the home of Internet Security? Third, what has our region done to market itself as a center of excellence for Internet security? Nothing that I’m aware of.
If we want to really move to the next stage of venture evolution with more capital invested, more start-ups and most importantly, more black swans, we are going to have to market our region more systematically on what we are world-class in. Excellent quality of life alone will not do it."
If Alan really wants to help move to the next level, I'd like to see him and Noro-Moseley get involved with true early-stage companies; the best part - it doesn't even have to cost him or his fund a dime. Show up to the regular YnR gatherings to help mentor entrepreneurs and offer to be on the board of advisors for very early stage companies. Open your network and help "catalyze connections". Start blogging regularly so you're part of the discussion. Market to the start-ups in Atlanta and the Southeast and tell them "Stay here, don't go to the Valley - you have the ideas and talent and we have your back."
Is the Southeast world-class? You're damn right - we just need to help each other so that everybody else sees it as well.