According to the Wikipedia entry, Paul Graham becomes rich after selling his startup company to Yahoo. Having achieved the American Dream he now writes essays, including two recent pieces about his thoughts on where entrepreneurial start ups – start up. Like all good rich California liberals, he seems to sincerely believe that Republicans desire to impose a police state on the country, but once you toss aside the nudge, nudge, wink, wink Democratic smug signals, he has some interesting points to make for all the government planners.
How to Be Silicon Valley: I think you only need two kinds of people to create a technology hub: rich people and nerds. … Do you really need the rich people? Wouldn't it work to have the government invest in the nerds? No, it would not. Startup investors are a distinct type of rich people. They tend to have a lot of experience themselves in the technology business. … Bureaucrats by their nature are the exact opposite sort of people from startup investors.After reasoning that the key to Silicon Valley type economic success is to use a great university in a town that is residentially attractive to “smart people”, Graham launches a 2nd lengthy examination of why America leads the world in leading edge technology companies. Among his ten factors are the facts that in America you can fire people and become rich.
Building office buildings for technology companies won't get you a silicon valley, because the key stage in the life of a startup happens before they want that kind of space. The key stage is when they're three guys operating out of an apartment. … A corollary is that you have to keep out the biggest developer of all: the government. A government that asks "How can we build a silicon valley?" has probably ensured failure by the way they framed the question. You don't build a silicon valley; you let one grow.
Why Startups Condense in America: I think one of the biggest obstacles to creating startups in Europe is the attitude toward employment. The famously rigid labor laws hurt every company, but startups especially, because startups have the least time to spare for bureaucratic hassles. … Across industries and countries, there's a strong inverse correlation between performance and job security.
The problem in more traditional places like Europe and Japan goes deeper than the employment laws. More dangerous is the attitude they reflect: that an employee is a kind of servant, whom the employer has a duty to protect. … Gradually employment has been shedding such paternalistic overtones and becoming simply an economic exchange.
In the US it's ok to be overtly ambitious, and in most of Europe it's not. … So if you want to encourage startups you should have a low rate on capital gains. Politicians are caught between a rock and a hard place here, however: make the capital gains rate low and be accused of creating "tax breaks for the rich," or make it high and starve growing companies of investment capital.
It is no secret that Wisconsin is one of the Top 5 Regions attempting to re-recreate the financial success of Silicon Valley, but this time with Biotechnology as the leading edge research to be commercialized. The search for the “smart people” covers the World and Madison is doing everything possible to build a model city for them.
