Growing start-up industries outside of Silicon Valley

Posted on November 19, 2011

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Question recently posed on Twitter spurred a few thoughts:

“Georgia start-ups need to grow outside of Georgia to build great companies and big valuations. Thoughts?”

It’s not whether they need to grow, but whether Georgia-based start-ups are able to grow outside of Georgia.   But where does this begin? Certainly not in local government, as the Georgia General Assembly is proposing with their $200mln fund.

There’s long been the belief that cities develop themselves to be “another Silicon Valley.”   New York City constantly pushes new initiatives to engineer this environmentMark Zuckerberg claims he would have stayed in Boston if he was starting Facebook again. Easy to say now, but would Facebook have enjoyed the same explosive growth in Boston without the hard engineering and start-up culture that Silicon Valley breeds? Unlikely.

Internationally, developing countries like Kazakhstan with their “Industrial Innovation Policy” have long tried to mimic Silicon Valley (and technology industry  hubs more generally) – surmising that staging a techno-park and developing an Investment Fund will sprout emerging technologies.  Or Russia. Or China. Even Reid Hoffman thinks Silicon Valley can be exported.

The kernel is there with Georgia Tech and a heavy financial industry.  But culturally there’s a strong undercurrent of conservatism in Georgia and in Atlanta compared to Silicon Valley. The investment capital will flow to where good ideas spawn and can be duly supported.  Silicon Valley receives the bulk of venture capital, but the Q3-2011 PWC Money Tree report shows the sugar gets spread a bit to other regions – more than you’d think.

So to answer the question?  Georgia start-ups will grow when they have the right products and the right teams in the right industries.