I don't care to start an argument about whether the Valley is a better place to launch a business or not. I won't even get into the discussion of whether it's better than Europe or not. It is! If you have the experience, the connections and the balls, there is no better place to launch a venture-backed tech business than the Valley. Plenty of evidence is available in this regard. At the same time, I sure have a lot of expat European friends who live in the States visiting me recently. They look like they just saw a ghost (or can "see dead people!") Maybe it's all the living-dead companies surrounding them?
We're all getting hit by the financial situation and companies are going to fail. Yet, in the past 15 years I've regularly lived in Europe, I have never heard anyone say they are bailing out on the US and coming home. As a European VC, it's probably easier to squeeze coal until you get a diamond than it is convincing say a German entrepreneur who has been successful to come back here to start or run a business. No more! In Europe you are regularly hearing of people in the States who are stock-piling money at home, just in case. One friend told me has has 30k cash at his house and some packed bags, with all necessary documents in case they need to get out quick. WTF?
Yet, I said this wasn't a post about where it's better to launch a business. Nor is this a post about how bad the situation really is. In my opinion, not as bad as the media make it out to be by the way. But, what effect is this having on all the non-Americans who swarm to the US to pursue their dreams. I'm not hearing many young people talk anymore of having to get to the US to make it. Actually, I haven't heard anyone say they were moving to the US in quite some time. Isn't the Valley absolutely dependent on all these nationalities showing up so that the best-of-the-best are represented in that small environment we refer to as "the Valley." Isn't this what allowed so many great companies to get off the ground?
My question is actually more how will the Valley perform if Indians, Chinese, Europeans, Russians and what-not decide to stay home? Is there enough local talent already in the Valley to get it back on track once things get a bit better. Will people near-term risk going there or will they simply say "my chances are just as good here" plus my family and friends are around. I may sound pessimistic but quite the contrary. I believe this is an opportunity for other regions to step up to the plate. It's good for everyone if great businesses can be launched in Europe or Asia and so forth. There's been so much talk of "Valley-like" regions establishing themselves in Europe, for example, in London or Berlin. Maybe it's finally time. What do you think? Will other regions outside of the US position themselves as technology hubs and try to get a bit of that "Valley feeling?" Is it the optimal time for this to happen? Or is the Valley an anomaly which will continue to prosper, even long after this downturn is over? Let me know in the comments.
Further Update: here is what McKinsey thinks about the Valley and how difficult it would be to re-create it.