I’m an unabashedly pro-Silicon Valley homer. 12 of Homebrew’s first 17 investments are based here (four in NYC and one in Salt Lake City), attended grad school at Stanford and coming up on Year 18 living in the Bay. Midway through my career, this is where I want to be and if I was just starting out, it would probably be the same story. However, what Silicon Valley thinks about your startup has never been less important. And it’s interesting to consider why.
When I got out to Stanford in 1998 it was still the dawn of the consumer commercial internet. Bay Area early adopters were generally representative of the people who would be getting online in the next few years. Largely American/Western. Largely white. Largely middle class. Largely using AOL (or another dial-up service) at home and some network connection at their white collar desk job. This homogeneity was useful in the sense that if you liked something, it was likely that there were other people similar to you that would also like it. Not because VCs or SF hipsters or Stanford undergrads were especially insightful but because the Internet population wasn’t as diverse as it is today.
Fast-forward to 2015. Billions of connected people across the world from all geographies, cultures, socioeconomic situations. Realities very very different than the Bay Area status quo. It’s never been more dangerous (or foolish) to sit here in SF and pronounce something as a failure just because you “don’t get it” or “haven’t heard of it.” Conversely, teams across the world can develop products for themselves (or their parents, their kids, their friends, etc) and find that they can reach hundreds of millions of people, without needing adoption in the US.
It’s not just the world coming online that’s changed the game but also monetization options spreading. Traffic outside of US, Japan and handful of European countries used to not matter because the internet was primarily ad supported and the majority of the world hadn’t yet brought their businesses online. How different today! Micropayments, direct transactions, ecommerce and so on.
Global entrepreneurs have access to audience, to monetization and, increasingly, to local capital. It’s why I believe early stage startups aren’t “over-funded” but under-funded by at least an order of magnitude. You just need to zoom out of 415, 650, 408 sometimes.