Startups, America, and Paul Graham

Paul Graham has a good essay on why startups “condense” in America. His point is that America has a combination of circumstances which is unique, and which helps startups form. While his assertions are debateable, the do provide a good framework for discussion. These assertions are:

1. The US Allows Immigration. (Why there is no Silicon Valley in Japan)
2. The US Is a Rich Country. (Why there is no Silicon Valley in India)
3. The US Is Not (Yet) a Police State. (Why there is no Silicon Valley in China)
4. American Universities Are Better. (Why there is no Silicon Valley in Germany)
5. You Can Fire People in America. (Why there is no Silicon Valley in Europe)

Brief digression to share my favorite quote from this section:

“Across industries and countries, there’s a strong inverse correlation between performance and job security. Actors and directors are fired at the end of each film, so they have to deliver every time. Junior professors are fired by default after a few years unless the university chooses to grant them tenure. Professional athletes know they’ll be pulled if they play badly for just a couple games. At the other end of the scale (at least in the US) are auto workers, New York City schoolteachers, and civil servants, who are all nearly impossible to fire. The trend is so clear that you’d have to be willfully blind not to see it.

Performance isn’t everything, you say? Well, are auto workers, schoolteachers, and civil servants happier than actors, professors, and professional athletes?

European public opinion will apparently tolerate people being fired in industries where they really care about performance. Unfortunately the only industry they care enough about so far is soccer. But that is at least a precedent.”

6. In America Work Is Less Identified with Employment. (Europe and Japan)
7. America Is Not Too Fussy. (Germany)
8. America Has a Large Domestic Market. (Sweden)

Another brief digressive quote:

“However, for better or worse it looks as if Europe will in a few decades speak a single language. When I was a student in Italy in 1990, few Italians spoke English. Now all educated people seem to be expected to– and Europeans do not like to seem uneducated. This is presumably a taboo subject, but if present trends continue, French and German will eventually go the way of Irish and Luxembourgish: they’ll be spoken in homes and by eccentric nationalists.”

9. America Has Venture Funding. (Everywhere else)
10. America Has Dynamic Typing for Careers. (Versus vocational tracking in Europe)

Graham goes on to note that this isn’t just a rah-rah list. The point is that America is successful at birthing startups for good reasons, and if those reasons go away, so will the startups. That’s why we need to keep immigration flowing, keep an open society, and keep our schools on top.

America has a hell of a lead, but there are a lot of ambitious Europeans, Indians, and Chinese waiting to build their own startups. As an American citizen, I’d sure prefer to have them doing it here in our country.

P.S. One area where I fundamentally disagree with Graham is in his assertion that “People who come to work in Silicon Valley face an unpleasant choice: either live in the boring sprawl of the valley proper, or live in San Francisco and endure an hour commute each way.”

This is a load of hogwash. There are plenty of folks I know, both techie and fuzzy, who prefer “the boring sprawl of the valley” to San Francisco (or, as I refer to it, that hellhole I hate with a burning passion second only to my hatred for Santa Cruz, which I hate with the burning passion of 10,000 suns). You couldn’t pay me enough to justify living in New York City or San Francisco.

Now I know plenty of people who prefer Manhattan or San Francisco. That’s fine. But don’t project your opinions on to the rest of the world, Paul.