It’s Not the People You Know. It’s Where You Are. – New York Times
Sequoia makes its preference for the 20-minute rule almost explicit, telling applicants whose companies are at the “seed stage” (receiving less than $1 million) or “early stage” ($1 million to $10 million) that “it is helpful if the company is close to our offices” because they “require very frequent contact.”
Kleiner Perkins has only one office, the one in Menlo Park. Sequoia has reached out to entrepreneurs more considerately, providing five offices. But only one of the five, the one in Menlo Park, is in the United States. The others are in China (two), India and Israel.
If you have a brilliant idea for the New New Thing and want Sequoia to provide its funds and blessing — using the same golden touch provided not long ago to Google’s founders — you would be much better off in Beijing, where Sequoia has an office, than in Boston, where it does not.
The ecosystem in Silicon Valley, Mr. Sternberg said, includes “incredible techies, who live here because this is the epicenter, where they can find the most interesting projects to work on.” The ecosystem also includes real estate agents, accountants, head hunters and lawyers who understand an entrepreneur’s situation — that is, emptied bank accounts and maxed-out credit cards.
“In New York, it would be extremely difficult to find a law firm willing to defer the first $20,000 of your legal fees,” Mr. Sternberg said. “Here, we got that. It’s a pretty standard thing in Silicon Valley.”
On the East Coast, a business plan contest at the Harvard Business School in 2004 prompted one M.B.A. graduate, Arijit Sengupta, to found BeyondCore, a software company, in his apartment in Boston. Mr. Sengupta, who earlier had earned a bachelor’s degree in computer science and economics at Stanford, was determined to develop a finished product and to acquire customers by the oldest method of all: bootstrapping, or starting a business without outside capital.
He did end up needing Silicon Valley for something else: technical talent that would be willing to accept equity in place of any salary. Six weeks ago, he moved to Silicon Valley to recruit more people like his chief technical officer, who has been working full time since Jan. 1 for equity only.
And this is why house prices will never fall in Silicon Valley.