GeekWire considers Seattle vs. Silicon Valley for startups

The Seattle area has its share of tech business leaders
with Amazon and Microsoft, but the Silicon Valley still
seems to be more of a hotbed for startups. In the latest episode of GeekWire, hosts Todd
Bishop and John Cook invited a big local investor and a
Seattle entrepreneur making the move to Silicon Valley to
discuss how this area might better compete.

Entrepreneur Tony Wright told GeekWire
that Seattle is where his heart is, but he’s recently made
the decision he’ll have to take his business south because
there aren’t as many investors up here.

“We look at the [startup] opportunity that we’re tackling
and the cost of that. There’s some startups that are very
lean, bootstrappy, early revenue, you’re profitable in a
month. This is a sort of bigger opportunity, a little bit
of longer burn, a little bit more cash intensive,” said
Wright. “We think it’s important to sort of start building
relationships where early stage investment is happening at
a sort of grander scale.”

Seattle investor Chris DeVore acknowledges fundraising in
Seattle is different than in Silicon Valley.

“I think Seattle it’s fair to say has both less ambitious
entrepreneurs and investors who are not encouraging
entrepreneurs to be ambitious,” said DeVore. “There’s a
lot of investors who basically are investing […]
Grandma’s money. They don’t want to lose their money.
They’d like to make money but they don’t want the risk of
taking a zero on the investment so you have this sort of
symbiotic relationship between lifestyle entrepreneurs and
lifestyle investors, so lots of things get funded a little
bit.”

DeVore said while Seattle has its share of great startups
today, they’re not huge, explosive businesses.

“You don’t have the Amazon, the Microsoft, the huge wins.
The freight trains that drag thousands of people along,
create a lot of wealth, create a lot of new entrepreneurs,
and have the recycling of capital and talent that is
happening down in Silicon Valley.”

Aside from the capital these behemoths bring, DeVore said
they also bring a certain kind of optimism that fuels
competition and growth.

“The more big wins we have here, the more that young
entrepreneurs see their peers, people who they think
they’re just as smart as, producing huge outcomes, raising
huge money, and essentially knocking the cover off the
ball. That generates the kind of excitement that starts to
spin the flywheel, and I wish we had more of that going on
up here.”

“In Silicon Valley, there’s so much of that going around,
it feels almost easier to believe,” said Wright. “I think
that sort of optimism fuel tank is one that startups don’t
think about a lot. They think about their money fuel tank.
You can have all the money in the world, but if you’ve
lost your faith in what you’re doing, you’re going to
fold.”

DeVore also said that high level of competition can mean a
short life span for a business that doesn’t show that “big
win” potential right out of the gate.

“It’s more of a shark tank fundamentally which is good,
very high performing environment, but bad in the sense
that if your company has hit a rough patch, or you aren’t
growing as fast as facebook did in the early days, maybe
everyone is going to say, ‘You know what Tony, I love you,
but there is a shinier object down the street and it’s
been fun.'”

DeVore thinks there’s a little less of this transitory
spirit in the Seattle startup community.

“People tend to be in it more because of the fellowship
and the experience and the journey, which doesn’t mean
they don’t want to be successful, but there’s more loyalty
and more sticktuitiveness for folks up there than there is
down there.”

He said people will go to the community that they feel
will support their business best. For Wright, at this
point, that is Silicon Valley. But he said he does one day
hope to bring his business back to Seattle.

“To me there’s still a very real possibility, and a hope I
should say, that when it is time to ramp up we’ll be
coming back here because definitely my heart is here,”
said Wright.

Listen to full GeekWire discussion: Seattle vs. Silicon
Valley:

GeekWire can
be heard on the new 97.3 KIRO FM Weekend at 7 a.m. on
Saturday, and 1 p.m. on Sunday. Available anytime ON DEMAND at MyNorthwest.com.

By JAMIE GRISWOLD, MyNorthwest.com Editor