Why Startups Condense in America 565
bariswheel writes "The controversial genius developer/writer/entertainer Paul Graham writes an insightful piece on Why Startups Condense in America. Here's the skinny: "The US allows immigration, it is a rich country, it is not (yet) a police state, the universities are better, you can fire people, work is less identified with employment, it is not too fussy, it has a large domestic market, it has venture funding, and it has dynamic typing for careers. Inquire for details within."
Re:Better Universities? (Score:3, Interesting)
Re:Better Universities? (Score:5, Interesting)
It's about quantity. If Chinese Universities were able to handle the demand of top Chinese students, they wouldn't flood to American universities by the thousands. There are top universities around the world, but if you write down all the "tier 1" universities in a particular discipline, more than half of them will be in America.
Fewer bureaucratic barriers (Score:2, Interesting)
Easier to find investors (Score:5, Interesting)
Re:Better Universities? (Score:2, Interesting)
The US is still the best environment conducive for education and innovation. We create, while they emulate. Chinese? Let me know when they can create their own chip without grabbing our ideas first. They're about where the Japanese were 30 years ago. We still have the best broad based educational infrastructure. We're still treated as the capital of the finance and business world. Our medical and engineering programs still gain recognition.
So some Russians are about to figure out how to write a recursive sieve in the least amount of time via rote and repetition, and are able to regurgitate that information on demand for competition. I'll be impressed when I see a Russian "Web 2.0" app that isn't spam or spyware.
Yes, but startups alone don't help the economy. (Score:4, Interesting)
Movie producers run out to California, mostly to escape legal process servers because a patent cartel wanted to price-gouge them for the unlicensed cameras they were using, stayed, and founded Hollywood.
A guy named Chesney starts up a business in Pittfield, MA and GE ends up headquartered there, and employing tens of thousands of people prior to Neutron Jack Welch.
Digital Equipment Corporation starts up in Maynard because the guys who founded it were connected with MIT, and there was cheap space in an old mill there... and grow in that location to a multi-billion-dollar company.
But I can easily see an unstable state in which the United States continues to be a good place for startups, for the reasons mentioned, but all of the really economically important activity gets moved overseas just as the company begins to take hold. Over time, of course, that will undermine all the things that make the U. S. a great place for startups, but not immediately... just as U. S. researchers continue to win Nobel prizes for work performed under conditions that existed in the U. S. decades ago.
Tangentially, New England is a great place for startups because of the existence hundreds of small, independent machine shops that can do prototype work. I believe those shops are a long-lived legacy of a century or two ago when New England and its mills were the most sophisticated industries in the U. S. I wonder whether anyone in the state government is paying attention to the care and feeding of those small businesses?
American Universities Are Better (Score:2, Interesting)
Re:Fewer bureaucratic barriers (Score:2, Interesting)
It was trivially easy to set up my company in the U.S. as well - sending 2 letters: one to apply for a Tax ID number and one to go on file with my local state government. I guess the gist of the idea is what happens next - how much restrictions you have, what kind of taxes and fees you have to pay, what kind of funding is available that kind of thing.
Re:Better Universities? (Score:5, Interesting)
Good point, which gets lost in most discussions like this.
For some reason, most people will read a sentence like "America has many of the world's top universities" and think it said "No country but America has a top university."
This is mostly a sign of the abject level of the teaching of basic logic at schools around the world. In America, too, because most Americans will misread things in the same way.
What I've always found especially curious is the mismatch of the American higher-education system with the open and blatant anti-education attitude of much of the American public. It's not just George Bush; signs of education and intelligence are carefully hidden by most American politicians, because they understand that this would be a major flaw to a huge fraction of the voters.
Meanwhile, people make jokes about how education is now America's major export industry. Funny how a country can make and export something that they don't like to use at home.
Re:Laws are it. (Score:1, Interesting)
Also, here in Sweden we have a high "job security" with tough laws regarding employment. But that does not mean that a company can not fire someone that misbehaves. If you dont do your job you are fired, why would there ever be a law against that anywhere? I have seen people beeing fired here for not doing their job. I do also believe that this is the case in france despite the rumours of impossiblity to fire people that are not doing their job.
One key to the many successful startups in USA I believe, is that many young people in USA dream about getting super rich, or doing something big, makeing a difference. It is important in the american culture to "become something". Here in europe people seem to have a different attitude towards life and what you should do with it. Many are very happy if they have a normal job to go to every day, kids, somewhere to live and money to spend on entertainment/food and the ocational vacation, etc.
Re:Better Universities? (Score:3, Interesting)
18th Century: France
19th Century: Britain
20th Century: USA
21st Century: China?
I can't necessarily see China succeeding on the level of the previous empires, though, due to their foreign dependencies for resources, oil, and markets. Still, its got the size and if distribution of wealth improves they might create their own market...
Besides, they had their empire from about 1500 BC to 500 AD.
Bay Area-centric (Score:5, Interesting)
As a European I find the article rather America-centric.
As an American I find this article to be Bay Area-centric. Silicon Valley ceased being an engine of significant economic growth after the dotcom bust. It is unlikely to return to its former glory. It is kind of humourous that pundits like Paul Graham are still taking victory laps for an era of growth in Silicon Valley he had little to do with. In the US the economies of the southwest and southeast are much more vital.
It is a rich country - not for long (Score:3, Interesting)
The bad news, is that I don't think there is anything that can stop an economic collapse, the good news is that I think after the collapse the US has the highest potential of any country in the world for a spectacular recovery assuming that people don't panic and impose all sorts of controls that take away economic freedoms.
(PS, those people who have written off gold and silver as barbaric immature monitary systems are going to be in for a very rude awakening, he he)
Re:Better Universities? (Score:3, Interesting)
$1200 per YEAR for college is peanuts.
Top Universities: Big Deal. (Score:2, Interesting)
Whats all the fuss about US startups anyway? (Score:2, Interesting)
Re:Better Universities? (Score:3, Interesting)
It all depends where you measure. Paul Graham appears to be basing his experience on MIT. Unfortunately the US only has one MIT and only five or so universities in the same class for technology.
The US Ivy League is unfortunately not world class in technology. The same is true of Oxford, the humanities are supreme, there is some world class science and math. Engineering is not an institutional priority. Yale and Harvard still have admissions policies that discriminate in favour of the children of alumni and against the most qualified applicants. You can't take second rate students and be first rate.
In the past this peversely helped the US system. MIT might well have remained a respected but unexciting trade school if Havard had decided to take engineering seriously. If Harvard and MIT had merged as was proposed before WWI then MIT would never have been the powerhouse it was after WWII. Harvard's anti-semitic hiring policies would have excluded most of the stars of the current CSAIL faculty.
Its not just the Rivests and Minskys that you loose with anti-semitic hiring, its all the non-jews who do not want to work in that type of environment. i think that this is probably one of the bigger effects on German academia, the NAZIs did not just exclude the jews, they excluded everyone who questioned their ideology. Once an institution has excluded the type of people who ask questions it can take centuries to recover. The Catholic church has not yet recovered from the counter-reformation, it probably never will.
There is no ideal higher education strategy. The US has historically had a much higher percentage of the population go through tertiary education. That is on balance probably a better strategy for this century than the UK where in the past only 10% went to university and there was a very deliberate divide between the ordinary and the elite schools.
On balance I don't think it is MITs and Stanfords that give the US the edge. You can always hire in elite engineers. And the people who succeed at places like MIT are people who would probably succeed almost anywhere. I think it is the large span of middle ranking institutions.
The point is that you need relatively few engineers compared to the number of salespeople, marketers, finance, administrators etc. And while engineers do not typically value the inputs of non engineers much these have a massive effect on the performance of a business, if only because smart people find it pretty difficult to work with people whose intellectual development stopped at 18. university is not a perfect cure for this but it can help.
Re:Distortion by size (Score:5, Interesting)
My point is that most Americans, even ones who travel, have no concept of any other way of life. That's not a criticism, just an observation. If everyone in Europe spoke the same language, ate the same food, etc, etc, we'd be saying the same about them. We don't have a concept of neighboring countries, except Canada and Mexico, because we never bump into any.
Re:police state?huh? (Score:3, Interesting)
Re:Let me get this straight... (Score:3, Interesting)
Me too, though perhaps for a different reason.
There are a lot of fields of study in which there is significant research going on that is unknown to most of the field, because most of the papers are published in a local journal, in the local language. This is especially true in Japan and China. The research only becomes "public" when it is published in a Western language, usually English these days.
I've seen a number of list of the "best" universities published in the US. Very often, I subsequently come across the observation that the universities at the top are all teaching in English. When I mention this to people, the reaction can often be summarized as "There are universities that don't teach in English?"
I think this is the main reason behind claims that the US has most of the top universities. You're reading something written by an American, and most Americans are blissfully unaware of anything that isn't reported in English.
There are exceptions. I had a math prof whose specialty had a number of important people at one university in Romania, and they published all their preliminary papers in their local journal, in Romanian. So he learned Romanian, to read their papers. ("It's easy if you already read French, as any educated person must.")
I also worked for several years as the computer guru for a bunch of biologists, several of which learned to read Japanese for the same reason. There are evolutionary biologists studying Mandarin because of the important work coming out of China. But you don't find many Americans outside academia who would do such a thing.
(Of course, the calligraphy itself could be a reason to study those languages.
Re:American dream is a (partial) scam (Score:3, Interesting)
I wouldn't necessarily call that an American phenomenon. For instance, an interesting study showed that Latin Americans who immigrate to the US are horrifed by estate taxes...even when the estate taxes don't kick in until the estate is worth $1mil.
The estate tax is purely a tax on the wealthy, so its elimination would benefit the wealthy the most (though keeping it is not necessariliy helpful to the non-wealthy.) In either case, these immigrants see some type of potential for them to be worth that much, and plus some other type of cultural aversion to taxation at death, make them highly supportive of the estate taxe's elimination.
Re:Better Universities? (Score:3, Interesting)
I don't know if the difference was because of the shift of responsibility, or the difference between motivation by paycheck and motivation by grade, or some other entirely different factor, or some of all of them.
Re:Better Universities? (Score:3, Interesting)
Russia. During the russian revolution, in addition to shooting czarists and priests, they liked to shoot intellectuals-- the intelligent, educated folks who thought maybe shooting people and "collecting" their stuff wasn't the best way to build a worker's paradise. In fact, up until the late 40's when the race for the atomic bomb came about, "intellectualism" was considered a bad thing. To this day, the term "intellectual" has a strong element of derision in Russia. Or how about good ol' Mao? Very big anti-intellectual. He even opined that people didn't need to learn to read, as knowing too much would only confuse them. Militant islamists desiring to turn democracies into islamic caliphates are generally pretty anti-intellectual.
Deriding education is standard dictator behavior.
So yeah, nothing new there. Move along. Move along.