<story><title>From Bezos to Walton, Big Investors Back Fund for ‘Flyover’ Startups</title><url>https://www.nytimes.com/2017/12/04/business/dealbook/midwest-start-ups.html</url></story><parent_chain><item><author>mbesto</author><text>I live in SV and love the quality of here. Honestly though, the situation for early stage startups here is becoming untenable.&lt;p&gt;My theory is the following:&lt;p&gt;- Seed money is drying up (there&amp;#x27;s legitimate data to support this) because it&amp;#x27;s all being saturation in Series Alphabet companies that are all raising on legitimate growth or legitimate track records (but with zero growth and very good connections).&lt;p&gt;- The housing situation is atrocious, and the tech scene is getting older (read -&amp;gt; having kids).&lt;p&gt;- This means employees are saturating towards Google&amp;#x2F;FB&amp;#x2F;Apple&amp;#x2F;etc because that&amp;#x27;s the only thing you can afford to do in the bay area. When you can afford pay hundreds and thousands of developers $500k all-in packages because your yearly profits alone can sustain the whole of the bay area (looking at you Apple) then it&amp;#x27;s almost impossible to compete for talent in anything that isn&amp;#x27;t Google&amp;#x2F;FB&amp;#x2F;Apple&amp;#x2F;etc or a Series Alphabet with strong capital.&lt;p&gt;- The rest of the world has learned all of the failures and lessons of SV and caught up. And yes all of the &amp;quot;inbound content&amp;quot; you created was free consulting to the 5 man shop running out of Madison, WI who is now competing with 3 man Stanford drop-out of the mid 2000&amp;#x27;s.&lt;p&gt;My bet is on this fund and other similar funds, like the middle market PE funds in tech (PSG, KKR, GSV, etc), Indie.vc, Venture for America, etc. This is the next big horizon in money making tech investing, not the next Instagram...those days are over.&lt;p&gt;It&amp;#x27;s amazing how many tech companies no one here has heard of but are making very legitimate money and are based in very unconventional locations. Tampa Bay, Minneapolis, Charlotte (and the tech triangle), Knoxville, Orlando, Atlanta, Provo, Boise, St Louis, Denver...you name it. I think we&amp;#x27;re gonna see many more Bandwidth.com&amp;#x27;s, MailChimps, Kabbage&amp;#x27;s, Outcome Healths, etc in the very near future.</text></item></parent_chain><comment><author>estreeper</author><text>I have a startup in a state which is very much a flyover: so much so that our license plates read &amp;quot;New Mexico, USA&amp;quot;, to assure people that we are, in fact, part of the union.&lt;p&gt;I moved from LA to Santa Fe a year and a half ago and started a company. Was able to buy a 3 bedroom house, big yard, nice neighborhood, walking distance to restaurants, brewpubs, and a grocery store for ~$1500&amp;#x2F;month, and got a couple roommates which puts our monthly cost at $400. That&amp;#x27;s a lot of runway.&lt;p&gt;There is a lot of underutilized talent here since there aren&amp;#x27;t a lot of traditional jobs, and we have two national labs within an hour of us (Los Alamos and Sandia) that feed in a steady supply of engineers and scientists.&lt;p&gt;All of this has created a startup scene both here and in Albuquerque an hour away filled with companies doing really interesting things, none of which are trying to build the next great way to deliver more ads to people. And being able to get outside the city in 20 minutes to go hiking, skiing, etc. is pretty amazing after working through LA commutes.&lt;p&gt;There are things I miss about LA (the ocean!), but there are just so many advantages to having a startup here that now I couldn&amp;#x27;t see it any other way.</text></comment>
<story><title>From Bezos to Walton, Big Investors Back Fund for ‘Flyover’ Startups</title><url>https://www.nytimes.com/2017/12/04/business/dealbook/midwest-start-ups.html</url></story><parent_chain><item><author>mbesto</author><text>I live in SV and love the quality of here. Honestly though, the situation for early stage startups here is becoming untenable.&lt;p&gt;My theory is the following:&lt;p&gt;- Seed money is drying up (there&amp;#x27;s legitimate data to support this) because it&amp;#x27;s all being saturation in Series Alphabet companies that are all raising on legitimate growth or legitimate track records (but with zero growth and very good connections).&lt;p&gt;- The housing situation is atrocious, and the tech scene is getting older (read -&amp;gt; having kids).&lt;p&gt;- This means employees are saturating towards Google&amp;#x2F;FB&amp;#x2F;Apple&amp;#x2F;etc because that&amp;#x27;s the only thing you can afford to do in the bay area. When you can afford pay hundreds and thousands of developers $500k all-in packages because your yearly profits alone can sustain the whole of the bay area (looking at you Apple) then it&amp;#x27;s almost impossible to compete for talent in anything that isn&amp;#x27;t Google&amp;#x2F;FB&amp;#x2F;Apple&amp;#x2F;etc or a Series Alphabet with strong capital.&lt;p&gt;- The rest of the world has learned all of the failures and lessons of SV and caught up. And yes all of the &amp;quot;inbound content&amp;quot; you created was free consulting to the 5 man shop running out of Madison, WI who is now competing with 3 man Stanford drop-out of the mid 2000&amp;#x27;s.&lt;p&gt;My bet is on this fund and other similar funds, like the middle market PE funds in tech (PSG, KKR, GSV, etc), Indie.vc, Venture for America, etc. This is the next big horizon in money making tech investing, not the next Instagram...those days are over.&lt;p&gt;It&amp;#x27;s amazing how many tech companies no one here has heard of but are making very legitimate money and are based in very unconventional locations. Tampa Bay, Minneapolis, Charlotte (and the tech triangle), Knoxville, Orlando, Atlanta, Provo, Boise, St Louis, Denver...you name it. I think we&amp;#x27;re gonna see many more Bandwidth.com&amp;#x27;s, MailChimps, Kabbage&amp;#x27;s, Outcome Healths, etc in the very near future.</text></item></parent_chain><comment><author>thesmallestcat</author><text>The SV BigCorps have really poisoned the well out there. It&amp;#x27;s depressing that the majority of good programmers in the bay area are obsessed with the compensation package. Not saying it&amp;#x27;s the wrong decision, but like you said, it sucks the air out of everything else. I&amp;#x27;d want to blow my fucking brains out if I had the typical Google SDE&amp;#x2F;SRE&amp;#x27;s job and the most interesting challenges were whether it was worth it to take the Google Bus to work or how to deftly navigate the D&amp;#x27;Amore spiderweb, but that&amp;#x27;s life if you want to work with good people out there. I&amp;#x27;ve interviewed with &amp;quot;top flight&amp;quot; YC alum etc. startups in the area and came away hugely unimpressed. Maybe it was just luck of the draw, but as a startup guy, I have no reason at all to move out that way. Over time stuff like this will result in bland, money-driven talent with good pedigrees and hurt innovation, to echo your point again.</text></comment>