Thread by @eladgil

“Industry towns” emerge due to the critical mass of having suppliers, customers, and investors in the same physical location.

For example, Hollywood and Bollywood for film, NY and London for finance, SF Bay Area, Bangalore and Beijing for tech.

If you wanted to go into the movie business and someone told you “you can make films from anywhere - you should move to Austin” you would think they were crazy.

Movies are written by authors who *could* live anywhere, are filmed onsite around the world, and *could* be digitally edited from anywhere. But most of it still happens in Hollywood.

While you *can* build a technology company from anywhere, it does not mean you should.

*The most ambitious people still come to Silicon Valley. Ambition and hard work matter for success.

*Engineers, sales, PMs, others who have worked at breakout companies all based in Bay Area
*Early customers (influencers for consumer, buyers for enterprise) all based in tech clusters
*Smart angels & venture capital is here, & smart service providers for legal, real estate

If u have advantage in hiring talent elsewhere, at least put HQ in Silicon Valley

If building for India/China markets, best to be in Bangalore/Beijing If building for local market, be in tech center for market eg:Lagos & Nigeria

If building for US or world, go to Silicon Valley

If you distribute your team, you need to invest earlier in process. You will need to do goal setting, strong internal comms, & lots of in person meet ups, earlier than most small companies do.

Distributed teams have a cost. In some cases cost may be worth it. In many it is not.

Given that markets are 10X bigger than ever before, there will be more $1 billion companies all over the world. It has never been easier to build a company with $10M or $100M in revenue.

However, the biggest $10 billion+ companies will continue to largely be founded in clusters.

See blog.eladgil.com/2019/05/market…

Industry towns like SV plug you into a critical mass of differentiated talent, knowledge, capital, and access.

Access & inside information matter a lot-what are new forms of distribution for product? Which VCs are funding what? What are customer trends?

There are counter forces to Bay Area tech dominance - for example San Francisco governance is terrible.

10 years ago, most startups and companies in tech were in the south bay. SF may not sustain as a tech cluster, while the Bay Area probably will

If SF governance (lack of affordable housing, homeless & drug issues) doesn’t change people will spill over into other parts of the Bay Area. Maybe Oakland, South SF, (or elsewhere) displaces SF eventually. Either way, cluster and industry town is likely to stay in Silicon Valley

Thanks to @naval for the conversation that sparked this tweet storm (there is also a blog post coming!)

PS If I could go back and edit tweets, I would change this one to "The highest concentration of ambitious people in tech reside in Bay Area (for US). Just as the highest concentration for finance is in NY. There are obviously great, ambitious people everywhere"