Dear Everywhere Else: You Will Not be the Next Silicon Valley

We hear this a lot: “Such-and-such city is going to be the next Silicon Valley.”

Everyone in the startup space admires and wants to replicate the Valley’s success. After all, a lot of billionaires have been made there.

But, here’s the thing, there will never be another Silicon Valley, the way we know Silicon Valley. What’s going on there is the result of decades of dedicated tech entrepreneurship, education, and financing. Many of the success stories found there happened well before tech and startups were cool.

That’s good for us, though. Because, here’s the other thing:

The world doesn’t need another Silicon Valley.

The world needs Detroit–where they are using entrepreneurship to claw their city back from bankruptcy.

It needs Israel–where they are using tech to find solutions to many of the world’s security problems.

It needs the countless cities across the country who are seeking solutions to the many problems our healthcare system has, from administration to devices.

It needs entrepreneurs who are so focused on solving the problem they’re tackling that they don’t really care if it’s current trend or “it” thing.

Even though we won’t ever be Silicon Valley, that doesn’t mean we can’t learn a few lessons from their success.

Innovation, not imitation

One reason Silicon Valley became what it has is because it was full of people who refused to imitate. No one in the Valley has ever said, “We’re going to be the next New York.”

Those of us in startups outside the Valley can take a lesson from this. Ecosystems who know their strengths and wear their differences like a badge of honor will be the next success stories. The ones who innovate in “unsexy” ways may well just find the next billion dollar ideas.

Understand entrepreneurship

There are great entrepreneurs all over the world, from the founder of this week’s hottest app to the women in Africa who make and sell jewelry to support their families.

But startups–truly ecosystem-shaping startups–are the ones chasing the big ideas relentlessly. Silicon Valley understands this, and you won’t find many lifestyle entrepreneurs there. Not that there’s anything wrong with lifestyle businesses, but it’s a completely different game they’re playing.

Successful ecosystems will not only know their industry, they’ll know what kind of entrepreneurs they have. And smart investors and mentors will be able to pick out the truly scalable ones to help grow.

Solve your own problems

There are plenty of articles lambasting Silicon Valley for solving rich, white boy, first world problems.

This isn’t going to be one of those articles, because I don’t think that’s fair to the smart men and women doing amazing things in the Valley.

However, there are other problems to be solved, problems that, for better or worse, Silicon Valley entrepreneurs just may not be aware of. That’s the true power of building your startup everywhere else.

In a recent article on PandoDaily, tech entrepreneur Chris Nicholson says,

People solve the problems they see every day. Even with the million amazing projects getting invented in San Francisco, the tech bubble produces a monoculture in what tech produces–apps that create more apps–and how it thinks.

Maybe the problem that captures your attention isn’t “world-changing,” but that’s okay. Solve it in the most creative, compelling way possible, and you may be surprised what comes next.

Ecosystems outside of Silicon Valley are the next big thing. It’s why we do what we do at Nibletz and the Everywhere Else Conference. We don’t think anywhere will ever be the “next Silicon Valley.”

But that doesn’t mean it won’t be amazing.

Do Entrepreneurs Everywhere Else Need to Visit The Valley?

Here at Nibletz we talk a lot about startups outside of Silicon Valley. A lot of other publications focus on the coasts, where there is an intense concentration of startup activity. Around here, though, we know that in the 21st century great companies can–and will–be built everywhere else.

BUT…there’s always a but…Silicon Valley is still the leader in startup activity. (I know you don’t want to hear it, but it’s true.) In that relatively small part of the planet there are more successful investors and entrepreneurs than in any other relatively small part of the planet. And any entrepreneur who is serious about building high growth startups needs to not only acknowledge what Silicon Valley has done, but look to it for opportunities to learn.

Okay, now I’m off my soapbox. Here’s what put me on it in the first place:

General Assembly and LaunchRock are sending someone to the Valley. With their “Break Into The Big Leagues” competition, the two companies have partnered up to offer a sweepstakes of sorts. The winner gets a trip for 2 to San Francisco including:

Airfare (from anywhere in North America, Europe or Australia)
3 nights at an Airbnb property
Car service throughout the trip
Tours and meetings with the hiring managers at Facebook, Google, Twitter, and Airbnb
Career mentoring from General Assembly and InternMatch
One-on-one coffee meetings with “Silicon Valley VIPs”

To enter, just hand over your email address here.

Now, it’s not uncommon for companies to use giveaways or contests to grow their mailing lists, but General Assembly and launchrock are going above and beyond. Entrant who don’t win the trip will still get access to interviews with tech insiders on how to break in and the GA class on getting a job at a startup.

We’ve talked about General Assembly before. The New York based organization offers educational programs that “transform thinkers into creators.” LaunchRock is an LA-based startup that helps companies set up “launching soon” pages.

CB Insights: Silicon Valley Is The Only Relevant Market For Venture Capital

Top research firm CB Insights released some very relevant and interesting data last week. The firm has been diving into their VC data to better understand fund performance and syndicate. In what they call one of their “more polarizing” briefs, they revealed that even today Silicon Valley is the most relevant market for venture capital. Silicon Valley is still producing the most exits.

Their latest data, measuring deal flow across the country, Silicon Valley still represents 52% of VC backed exits, leaving “everywhere else” with an improved, but still less, 48%.

When purely looking at the value of exits, Silicon Valley is still far ahead of everywhere else. When CB Insights analyzed the valuation of the top 50 exits in the country Silicon Valley companies accounted for 86% to the top aggregate exit valuations of those top 50 exits. In 2012 Facebook’s IPO accounted for a tremendous chunk of the 86% but once removed Silicon Valley still accounts for 54% of the aggregate exit valuations.

New York, Southern California, Massachusetts and Illinois trail behind Silicon Valley.

There are even investors who believe that New York is a waste of time.

CB Insights reports that at a recent dinner in NY hosted by Silicon Valley firm Lowenstein Sandler one VC said “New York is an irrelevant market for us as a venture capital firm. They went on to say that from the investor’s perspective allocating his firm,s time to New York or any other market outside of Silicon Valley was a waste of time.

But there’s hope.

Late last month AOL founder Steve Case announced that his Revolution Venture Fund had raised $200 million dollars that they were specifically going to use to back companies everywhere else. Case’s big mantra is “Rise of the rest,” and that is exactly what’s going on now.

There have always been investors and startups everywhere else. One of the fundamental problems we’ve found since launching Nibletz and the Everywhere Else conferences is that entrepreneurs and investors exist everywhere. The problem lies in the fact that the entrepreneurs believe that it’s best to move to Silicon Valley or in some regards New York City to grow their company. At the same time the investors either don’t know that there are good deals in their own neighborhoods or it’s just flashier to find an investment in a larger city or participate in rounds with Silicon Valley.

Investors like Mercury Fund’s Blair Garrou, Dundee Venture Capital’s Mark Hasebroock, and Drive Capital’s Mark Kvamme all see the value in finding startups worth investing in everywhere else, thus contributing to the rise of the rest. These investors are not alone. At our recent Everywhere Else Cincinnati conference, we had over 40 investors from across the country that represented over $1 billion dollars in deals across Everywhere Else. (Note we still consider New York Everywhere Else and obviously many others do too.)

Events like Big Omaha, Big KC, UpGlobal’s startup summit, and the Everywhere Else Conference Series all unite entrepreneurs from everywhere else to continue developing their own market.

The notion that innovation only happens in Silicon Valley is quite ridiculous. Cars were invented in Detroit. Air planes were invented in North Carolina (some may dispute that). The overnight package was invented in Memphis, Tennessee. In the overall landscape of things, everywhere else far outweighs the rest of the country as far as large corporations being founded and continuing to produce.

Myth Busters: Money Does Not Grow On Trees In Silicon Valley [video]

Neil Parikh,Communly,Silicon Valley,startup,startup tips,launchyourcity

Communly co-founder Neil Parikh talks with Memphis based entrepreneur Ryan Ramkhelawan at the LaunchLounge on location in Silicon Valley (photo: NMI 2013)

We just wrapped up the LaunchYourCity, nibletz.com mission to Silicon Valley. On that trip we spent lots of time connecting to investors, accelerators, incubators, entrepreneurs and startup founders from San Francisco to Mountain View and everywhere in between.

As the voice of startups everywhere else, we kept our minds open throughout the trip and soaked up every nook and cranny of information that we could.

In working with hundreds of startups across the country, and around the world (everywhere else), we have found that a lot of people think money grows on trees in the valley.

In talking with a variety of Silicon Valley based startups in various stages we found that, that’s not the case. In some cases it’s actually harder to raise money in the valley because there’s much more competition.

Silicon Valley is like the Hollywood of statups. Founders move to Silicon Valley in droves in hopes of getting their big idea discovered. It certainly isn’t that easy.

You have to figure for every idea out there, there are three more people working on that same thing. Sure the biggest VC’s are based in Silicon Valley but they’re getting pitched every minute of everyday. One VC we spoke with said he, like Mark Cuban, routinely gets pitched in the bathroom.

Sure all startups are looking for their big funding break and all VC’s are looking for the next Facebook or Instagram, but the chances that the two will connect are very difficult.

More than one startup founder told us that they had raised money at home, and thought that was the signal that they were ready to raise in Silicon Valley and now they’ve moved onto another startup.

There are several factors that could account for this happening. One is that when you grow your startup in your hometown and can pick up any bit of local traction, your local investors know you. They’ve seen you grow and seen your failures and victories. When you venture out to Silicon Valley you quickly become just another startup.

There’s also a much better chance that an angel or VC in Silicon Valley has heard your particular idea hundreds of times, where your local investors have only heard it once, from you.

Does this mean that you shouldn’t move to Silicon Valley? Not necessarily there are advantages too that we’ll be posting about later. This is definitely some nourishing food for thought though.

We got a chance to talk to 21 year old serial entrepreneur Neil Parikh of Communly about the myth that money grows on trees in Silicon Valley. Check out the video below and check out communly here.

Find a lot more great startup tips here at nibletz.com

Mark Cuban: Shit! That Sound You’ll Hear From The Valley As The Fund Manager Turns Out The Lights

Marc Cuban, Silicon Valley, Silicon Valley Bubble, startup,startups

Mark Cuban (center) with nibletz co-founder/CEO Nick Tippmann (left) hanging out in Indiana

Like, Dave McClure, entrepreneur, Dallas Mavericks owner and investor Mark Cuban is a strong advocate for starutps outside Silicon Valley, “everywhere else” as we call them here. It seems that almost every time Cuban is asked to speak at a startup investor conference or in front of entrepreneurial students, someone asks him about the next bubble.

Cuban is a self made business man all around. One of his earliest business endeavors was selling computers. The kicker though was that he didn’t even own one. He read manuals and documentation on whatever he could about computers working for someone else, until he ventured out on his own.

His earliest success came during the first dot com “bubble” when he sold Broadcast.com to Yahoo in 1999 for $5.7 billion dollars. Not too shabby. He was able to parlay that into purchasing the Dallas Mavericks and founding HDnet which is now axs.tv.

Cuban has spead his latest investments around. He’s invested in companies (outside of Shark Tank) in Los Angeles, New York, Atlanta and other cities, keeping his portfolio out of harms way in the event of a Silicon Valley bubble 2.0. And that’s just where he thinks the next bubble will occur.

He doesn’t think the next “bubble” will actually be a bubble but rather the results of a pyramid scheme or modern day chain letter.

“It’s almost the 2011 version of a private equity chain letter,” Cuban said, as reported by PEHUB.

“Remember the old chain letter, where you put up some money, then you got other people to put up some money, and you gave it to the people who were in the deal before you? That’s what’s happening today,” says Cuban. “The early [VCs] are getting the new [VCs] to invest enough money at high enough valuations that they get most, if not all of their money back. Then the next round [sees] someone else invest more money at a higher valuation, returning cash to the last two rounds of investors. By the time you get to the last [VC] standing, those last few rounds hope they can get a return from the public markets. That may be very tough. But the only players really on the hook are the guys from the last rounds. Just like in a chain letter.”

Lately there’s been a lot of talk as to whether Silicon Valley is on the brink of another bubble explosion. The first one saw startups quickly become brand names like Pets.com and Toys.com, and then just as quickly evaporate into a bankrupt land of nothingness.

Several things over the last three months in particular have caused investors to look more cautiously. Back in mid december the Dow Jones VC Edge report came out. That sent a tremor through Silicon Valley and New York City. Fred Wilson blogged about it as a signal that there was a “Series A Crunch” coming. That same week Paul Graham the founder of YCombinator shook things up some more when he reported that startups in the world famous accelerator program would receive less seed funding and that they were taking less startups in the next YC class.

Today, people are watching anxiously as companies like Zynga and Facebook were expected to make billions in IPO’s and then carry investors off into the sunset. That didn’t happen for either company, Zynga much worse off today than Facebook, and that was all in the last year.

Cuban banks on winners, in fact on and off the court he says “No one hates losing more than me”. He’s practical though and knows not everything he invests in is going to have $5.7 billion dollar exit but he’s going to work relentlessly to insure as much success as possible.

What he does say though is that eventually, like with a chain letter, Silicon Valley investors are going to be left holding empty envelopes. He won’t be one of them.

“When the market has a correction, stock prices will correct dramatically, and that sound you’ll hear from the Valley?” says Cuban. “[It] will be of a fund manager screaming, ‘Shit!’ as he turns out the light on his fund.”

Startups “everywhere else” join 1700 other entrepreneurs and founders who’ve already bought tickets to everywhereelse.co The Startup Conference

Holy Google’s Marissa Mayer Is Moving To Yahoo As CEO

As many of our loyal readers know, we don’t typically report on Silicon Valley news, unless it’s say as big as Facebook acquiring Instagram for $1 billion dollars, or Google’s Marissa Mayer getting the nod as CEO at Yahoo. Mayer replaces a disgraced Scott Thompson who was fired when it was discovered he did not possess a computer science degree that was on his resume and subsequently reported in filings to the Securities and Exchange Commission (SEC).

This is a significant accomplishment for an incredible woman who I’ve personally met on two occasions and have seen speak on more than a handful of occasions. Mayer was the first woman engineer at Google. She led Google’s search team for years before pivoting to lead Google’s maps team. She is one of the few, female or male, people that can withstand a Mike Arrington beating in the hotseat and still not give up any information.

It’s clear that Mayer has the strength, knowledge and expertise to go head first into straightening out the mess that was left in the wake of Thompson. This includes an erroneous patent battle Thompson put Yahoo in with Facebook. Google has been on both sides of similar patent situations.

Mayer is also a visionary and a respected leader in Silicon Valley. Yahoo co-founder David Filo (who still works at the company) said in a statement:

“Marissa is a well-known, visionary leader in user experience and product design and one of Silicon Valley’s most exciting strategists in technology development. I look forward to working with her to enhance Yahoo’s product offerings for our over 700 million unique monthly visitors.”

Mayer said, “I am honored and delighted to lead Yahoo!, one of the internet’s premier destinations for more than 700 million users. I look forward to working with the Company’s dedicated employees to bring innovative products, content, and personalized experiences to users and advertisers all around the world.”

“The Board of Directors unanimously agreed that Marissa’s unparalleled track record in technology, design, and product execution makes her the right leader for Yahoo! at this time of enormous opportunity,” said Fred Amoroso, Chairman of the Board of Directors.

While some may find it odd that Mayer is leaving Google for the CEO position, at what was once one of Google’s key competitors, it was actually a Facebook executive, Sheryl Sandberg who summed up Google’s internal philosophy on moves like this. While giving a commencement address at Harvard Sandberg told a story about her interview with then CEO of Google Eric Schmidt. After showing Schmidt a spreadsheet declaring that the position she was up for at Google matched none of her job criteria Schmidt told her “don’t be an idiot” “Get on a rocket ship”. The same holds true for this opportunity for Mayer, which direction that rocket ship is going is still unclear though.

Source: SAI

We Catch Up With Social Photo Sharing Startup StreamZoo At TechCrunch Disrupt VIDEO INTERVIEW

At TechCrunch Disrupt 2011 in New York City, our Managing Editor, Cameron Wright caught wind of Phonezoo’s latest startup project StreamZoo. StreamZoo is a multi platform photosharing application for Android and iPhone that has unique elements that make it one of the most popular photo sharing experiences outside of Instagram.

For starters StreamZoo allows users to follow users and streams that are created by hashtags. For example, co-founder Manish Vaidya talks in part three of this interview about how international users in Indonesia and Brazil make streams for their countries which draw more photos from other users in their country.

Wright also talks to Vaidya about the impact that Instagram has had on StreamZoo. Vaidya says that StreamZoo wasn’t really affected by the adoption of Instagram. Users were steadfast in their ways with their photosharing apps. What did happen however, was when Lightbox was acquihired by Facebook and subsequently shutdown StreamZoo found a lot of users migrated to their service. Those users used a stream #lightbox to find each other on StreamZoo.

StreamZoo also offers a badging element reminiscent of GoWalla which was also acquihired by Facebook. StreamZoo has the ability to create badges centered around locations, businesses, fun places to go and events. In fact Vaidya created a special badge unique to just Disrupt.

In Part I of the interview Wright talks with Vaidya about the progress that StreamZoo has made since they met the previous year. They also talk about how the StreamZoo community influences changes in the 8 person Sunnyvale based team. StreamZoo had gone a little notification crazy but quickly reacted to the community adding a more effective way to manage notifications in messages within the UI. Check out part I below:

In Part II of the interview Vaidya talks about the impact of Instagram, Facebook and Lightbox on the StreamZoo application. Check out part II after the break

Startup America Spotlight: Woman Owned, Mytab.co INTERVIEW

Last week Cameron and I attended a TechCocktail event that was keynoted by Startup America CEO Scott Case. We challenged ourselves to get more involved so we decided to start featuring Startup America startups as part of our interview/feature series. If you’re a Startup America member at any of their now 22 partnerships across the country email us at startup@nibletz.com and we’ll see if we can get you into our coverage schedule. (Hint it’s one of the only ways we’ll cover a Valley startup)

For our first Startup America member spotlight we talk with Heddi Cundle the founder of woman owned startup mytab.co. Mytab.co is a unique travel gift card.

The card serves two purposes, it allows you to crowdsource funds for your trip. Take a honeymoon for instance, your friends and family can add to your mytab.co account and you’ll have money for your travels.

The second purpose of the card is discounts and rewards from travel partners. Cundle is working with travel partners all over the world to offer mytab.co members exclusive discounts and deals on travel related costs.

Check out our interview with Cundle after the break

Ashton Kutcher Prepares For A-Grade Role As Steve Jobs

TV and Movie star turned technology investor Ashton Kutcher was selected for the Role of Steve Jobs in an upcoming independent film about the co-founder of Apple. The movie is currently being titled Jobs: Get Involved and is said to focus on the earlier parts of his career, much in the way Pirates of Silicon Valley did.

The movie will profile Jobs years starting Apple and then through NeXT and Pixar. There’s no word if the script will dip into his triumphant return to Apple and his later years.

Sony Pictures has picked up the rights to Walter Isaacson’s biography about Steve Jobs which became a best seller when it’s release coincided with the death of the Apple founder. Sony is said to be in discussions with Aaron Sorkin the mastermind behind the NBC hit drama series West Wing, as well as the screen writer for the Mark Zuckerberg biographic movie “The Social Network”.

Sony is reportedly looking at booth George Clooney and Noah Wylie to take on the role of Jobs for their movie. Wylie played Jobs in the cult classic Pirates of Silicon Valley which aired several times in the US after Jobs’ death.

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Mark Cuban: There’s A Bubble In SiliconValley…Nowhere Else

Self made billionaire, ABC Shark Tank Shark and Dallas Maverick owners Mark Cuban recently spent some time with the Wall Street Cheat Sheeet’s, Damien Hoffman. Of course the wonderful “Bubble 2.0” question came up, and Cuban’s response will be a-ok with the target audience of Nibletz, the voice of startups everywhere else.

“There is a bubble only in tech investing in Silicon Valley. Nowhere else in the U.S.” Cuban said in the interview. All of Cuban’s most recent interviews have suggested that valuations in the Valley are way over-hyped. Our West Coast Editor (and co-founder) Brent Fishman has no problem talking abut the wild and crazy valuation of Pinterest. Fishman loves to point out that Pinterest has no actual “business model” in place.

One of the things about Cuban’s assessment being so true for startups “everywhere else” is the fact that even if the playing field in the venture capitalist arena was marginally fair, startups everywhere else already have to work twice as hard from everything else.

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Founders Card, Entrepreneur’s Card Now At 5,000 Members

Two year old Founder’s Card is now 5,000 members strong. The exclusive discount card, geared towards founders and entrepreneurs was started by Eric Kuhn two years ago. Members of the card pay a $495 registration fee and a $60 start up fee to become part of an exclusive club.

While there’s no secret club house in the woods or a secret decoder ring, FoundersCard members enjoy substantial discounts at businesses they typically need like Apple, Virgin Atlantic and several 4 and 5 start hotels.

FoundersCard also gives members access to exclusive members only networking events and cardholders are a who’s who of the rich and powerful in the tech, startup and VC crowd. Having the card is definitely “in”.

Although the baseline cost to join is $495, referrals into the FoundersCard’s exclusive club are given access for just $295. While that may seem like a great deal, Inc Magazine reports that serial entrepreneur Adam Rodnitzky recently responded to a Quora thread about FoundersCard and when asked if it was worth it he replied: “Are you bootstrapping or pre-exit? Then FoundersCard is probably not worth it … yet.”

source: Inc

Furniture Deals Site Deal Decor Raising $1.2 Million Funding Round

Craig Sakuma and Gregory Lok’s Dealdecor.com is a new web based start up bringing daily deals to those looking for furniture. In fact TNW’s Robin Wauter’s called Dealdecor.com “Groupon For Furniture”.

The San Francisco based startup is looking to secure $1.2 million in funding and according to a filing at the SEC they’ve already scored a cool million of that.

Dealdecor is hoping to become the go-to site for daily deals on furniture, garden products, home furnishings and other related merchandise. They are doing this by offering up to 70% off retail prices.

Both of the founders have a solid background in the home furnishings and home improvement industry. Both Sakuma and Lok had high ranking positions at the nation’s largest home improvement chain Home Depot. The service is only available in the bay area but with this new funding we are confident it will open up to more of the country.

Dealdecor has several direct fulfillment deals with Asian and other overseas manufacturers. If you’re looking to save money through Dealdecor though it’s going to cost you one thing, time. Their website suggests a 4 week turnaround on most purchases including the overseas freight.

Check it out at: dealdecor.com

source: TNW

With Nukona Acquired by Symantec Citrix Accelerator Graduates First Class

Nukona, a start up focused on mobile app management, was just acquired by Symantec last week. Nukona was one of the first startups in the Citrix Startup Accelerator.

The Citrix Startup Accelerator takes early stage startups with a focus on enterprise and not necessarily integrated with the Citrix platform. In addition to monetary backing Citrix provides the accelerator companies with office space near their Santa Clara headquarters, mentorship and access to the Citrix customer base.

They also give the accelerator companies access to Citrix executives, networking opportunities and access to vendor partners like Symantec who can be instrumental in a companies next round of financing.

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The Forgiving Valley: Path Puts Privacy Issue Behind Them Takes Another Round At A $250 Million Valuation

Yesterday we brought you the story of how some folks are out for blood against New York deals start up Sqoot. They misspoke and came off sexist, not once but twice. While opponents of sqoot are begging anyone that will listen to stop supporting their start up over saying that women would be at their hackathon serving beer, Path the social media network started by Facebook Alum Dave Morin, had a much more severe issue and just got another round of funding.

Although I truly feel that privacy is in the hands of the user and that if you are that worried about your privacy than you should stay off the net, Path did something far worse than Sqoot. They uploaded the complete contents of users address books to their own private servers.

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