|  
  
|  **Want to start a startup?** Get funded by Y Combinator.  
  
---  
  
October 2011  
  
If you look at a list of US cities sorted by population, the number of
successful startups per capita varies by orders of magnitude. Somehow it's as
if most places were sprayed with startupicide.  
  
I wondered about this for years. I could see the average town was like a roach
motel for startup ambitions: smart, ambitious people went in, but no startups
came out. But I was never able to figure out exactly what happened inside the
motel—exactly what was killing all the potential startups.   
  
A couple weeks ago I finally figured it out. I was framing the question wrong.
The problem is not that most towns kill startups. It's that death is the
default for startups, and most towns don't save them. Instead of thinking of
most places as being sprayed with startupicide, it's more accurate to think of
startups as all being poisoned, and a few places being sprayed with the
antidote.  
  
Startups in other places are just doing what startups naturally do: fail. The
real question is, what's _saving_ startups in places like Silicon Valley?   
  
**Environment**  
  
I think there are two components to the antidote: being in a place where
startups are the cool thing to do, and chance meetings with people who can
help you. And what drives them both is the number of startup people around
you.  
  
The first component is particularly helpful in the first stage of a startup's
life, when you go from merely having an interest in starting a company to
actually doing it. It's quite a leap to start a startup. It's an unusual thing
to do. But in Silicon Valley it seems normal.   
  
In most places, if you start a startup, people treat you as if you're
unemployed. People in the Valley aren't automatically impressed with you just
because you're starting a company, but they pay attention. Anyone who's been
here any amount of time knows not to default to skepticism, no matter how
inexperienced you seem or how unpromising your idea sounds at first, because
they've all seen inexperienced founders with unpromising sounding ideas who a
few years later were billionaires.  
  
Having people around you care about what you're doing is an extraordinarily
powerful force. Even the most willful people are susceptible to it. About a
year after we started Y Combinator I said something to a partner at a well
known VC firm that gave him the (mistaken) impression I was considering
starting another startup. He responded so eagerly that for about half a second
I found myself considering doing it.  
  
In most other cities, the prospect of starting a startup just doesn't seem
real. In the Valley it's not only real but fashionable. That no doubt causes a
lot of people to start startups who shouldn't. But I think that's ok. Few
people are suited to running a startup, and it's very hard to predict
beforehand which are (as I know all too well from being in the business of
trying to predict beforehand), so lots of people starting startups who
shouldn't is probably the optimal state of affairs. As long as you're at a
point in your life when you can bear the risk of failure, the best way to find
out if you're suited to running a startup is to try it.  
  
**Chance**  
  
The second component of the antidote is chance meetings with people who can
help you. This force works in both phases: both in the transition from the
desire to start a startup to starting one, and the transition from starting a
company to succeeding. The power of chance meetings is more variable than
people around you caring about startups, which is like a sort of background
radiation that affects everyone equally, but at its strongest it is far
stronger.  
  
Chance meetings produce miracles to compensate for the disasters that
characteristically befall startups. In the Valley, terrible things happen to
startups all the time, just like they do to startups everywhere. The reason
startups are more likely to make it here is that great things happen to them
too. In the Valley, lightning has a sign bit.  
  
For example, you start a site for college students and you decide to move to
the Valley for the summer to work on it. And then on a random suburban street
in Palo Alto you happen to run into Sean Parker, who understands the domain
really well because he started a similar startup himself, and also knows all
the investors. And moreover has advanced views, for 2004, on founders
retaining control of their companies.  
  
You can't say precisely what the miracle will be, or even for sure that one
will happen. The best one can say is: if you're in a startup hub, unexpected
good things will probably happen to you, especially if you deserve them.  
  
I bet this is true even for startups we fund. Even with us working to make
things happen for them on purpose rather than by accident, the frequency of
helpful chance meetings in the Valley is so high that it's still a significant
increment on what we can deliver.  
  
Chance meetings play a role like the role relaxation plays in having ideas.
Most people have had the experience of working hard on some problem, not being
able to solve it, giving up and going to bed, and then thinking of the answer
in the shower in the morning. What makes the answer appear is letting your
thoughts drift a bit—and thus drift off the wrong path you'd been pursuing
last night and onto the right one adjacent to it.  
  
Chance meetings let your acquaintance drift in the same way taking a shower
lets your thoughts drift. The critical thing in both cases is that they drift
just the right amount. The meeting between Larry Page and Sergey Brin was a
good example. They let their acquaintance drift, but only a little; they were
both meeting someone they had a lot in common with.  
  
For Larry Page the most important component of the antidote was Sergey Brin,
and vice versa. The antidote is people. It's not the physical infrastructure
of Silicon Valley that makes it work, or the weather, or anything like that.
Those helped get it started, but now that the reaction is self-sustaining what
drives it is the people.  
  
Many observers have noticed that one of the most distinctive things about
startup hubs is the degree to which people help one another out, with no
expectation of getting anything in return. I'm not sure why this is so.
Perhaps it's because startups are less of a zero sum game than most types of
business; they are rarely killed by competitors. Or perhaps it's because so
many startup founders have backgrounds in the sciences, where collaboration is
encouraged.  
  
A large part of YC's function is to accelerate that process. We're a sort of
Valley within the Valley, where the density of people working on startups and
their willingness to help one another are both artificially amplified.  
  
**Numbers**  
  
Both components of the antidote—an environment that encourages startups, and
chance meetings with people who help you—are driven by the same underlying
cause: the number of startup people around you. To make a startup hub, you
need a _lot_ of people interested in startups.  
  
There are three reasons. The first, obviously, is that if you don't have
enough density, the chance meetings don't happen.  The second is that
different startups need such different things, so you need a lot of people to
supply each startup with what they need most. Sean Parker was exactly what
Facebook needed in 2004. Another startup might have needed a database guy, or
someone with connections in the movie business.  
  
This is one of the reasons we fund such a large number of companies,
incidentally. The bigger the community, the greater the chance it will contain
the person who has that one thing you need most.  
  
The third reason you need a lot of people to make a startup hub is that once
you have enough people interested in the same problem, they start to set the
social norms. And it is a particularly valuable thing when the atmosphere
around you encourages you to do something that would otherwise seem too
ambitious. In most places the atmosphere pulls you back toward the mean.  
  
I flew into the Bay Area a few days ago. I notice this every time I fly over
the Valley: somehow you can sense something is going on. Obviously you can
sense prosperity in how well kept a place looks. But there are different kinds
of prosperity. Silicon Valley doesn't look like Boston, or New York, or LA, or
DC. I tried asking myself what word I'd use to describe the feeling the Valley
radiated, and the word that came to mind was optimism.  
  
  
  
  
  
**