Inside, Out

There’s been a lot written recently about ‘startup hubs’ – places like Silicon Valley and New York City, where the critical mass of investors and entrepreneurs create a positive feedback loop: the startups attract dollars, the dollars attract more startups, which in turn attract even more dollars, back and forth and back until a whole ecosystem of entrepreneurs and investors and employees and supporters crop up in one place, in a way that makes all of the players more likely to succeed.

Obviously, there’s a lot about that startup hub model that’s excellent, which is why most of the discussions have centered around how to create startup hubs in other places, or how to bolster them in places where they already exist.

But there are downsides to hubs, too. Chief among them the insular, almost provincial mindset that people tend to develop when they deal all day and night only with other people just like themselves.

Consider Hollywood, another sort of hub, which makes a disproportionate number of movies about making movies. If you’re in LA, every single person you talk with is somehow involved in the film industry, so movies about making movies start to seem like they’d have nearly universal appeal. *(Mea culpa: Back at Cyan, I actually exec produced a [totally indulgent, inward-focused, movie-making movie](http://en.wikipedia.org/wiki/I_Love_Your_Work). It sucked.)* Turns out, most people in the real world have only a passing interest in the business of the movie business, as the lackluster box office performances of film-focused films like *What Just Happened* and *The TV Set* demonstrated, despite their star-studded casts.

Similarly, in the tech world, a distressingly high percentage of the startups cropping up these days seem to solve problems and address pain points that only exist within that tech startup world. Consider the much-buzzed-about [Klout](http://www.klout.com), which simply ranks users’ power and influence by analyzing their social media habits. Outside the tech world, the vast majority of internet users could give two shits about how much of a ‘power player’ they are on Twitter. And even those who do might question the accuracy of a power and influence ranking system that puts a slew of bloggers ahead of President Obama. Still, inside the bubble, that seems reasonable enough to have driven a $30m funding round for Klout last fall – at a $200m valuation, and led by venerable VC Kleiner Perkins, nonetheless.

On balance, the advantages of startup hubs still clearly win out. But there’s real value in regularly traveling, socializing, and thinking outside of the confines of that hub. Facebook may now be a prime driver of the Silicon Valley startup ecosystem, but it started in a lonely freshman dorm room, three thousands miles away.