Born and raised in the midwest here, and the article has done well to cherry-pick a relatively liberal spot in an otherwise conservative state. The same could be said of the Carolinas and the infamous research triangle park.
I left the midwest for the west coast because of the culture, full stop. I was tired of my state representatives writing my sexual preference off as a disorder. I was angry when the state decided a pharmacist could refuse to sell me birth control and I hated the legislative decree that tried to exert control over what gender got to use the bathroom or not. In short, I did not want to live in a state where the legislature had nothing better to do than fight the culture war to win votes for the next election. Yeah, I cant buy a house in san jose, but at least I dont have to worry about the ten commandments showing up at the DMV in stone or some toothless anti-shariah legislation burning through my tax dollars.
Drive 15 miles outside Columbus and it doesnt matter how many VC firm employees you have in the city, the bible thumpers win this state by a landslide of gerrymandering and arent ashamed to force their backwoods culture on you from the hinterlands. The midwests relationship with silicon valley terminates at the facebook, google, and twitter HTTP connection for a damn good reason.
I think a whole lot of the divide we see is not state/region based but city vs. rural. See how many quite conservative congresspeople CA sends to the house, many of which just voted on a bill that will increase taxes on many Californians, especially those who live in the big cities. The bay area sprawls out pretty far but drive into the Sierras or up north and it's a different story. Trump won Placer county (aka area around Lake Tahoe) by 51-39%. Further north, he won Lassen county 70-20%. This in a state where Hillary won and the legislature is roughly 2/3rds Democrat.
I see no reason the cities in the midwest couldn't host a tech boom, and over time start to turn the cultural tide as a result.
More globally, this divide makes me sad. I have trouble thinking these people who hold views I find quite wrong are bad people, but it seems somewhere our national conversation has broken down completely. Sometimes maybe for good reasons, but still it's quite depressing.
As someone who grew up in Columbus, went to school in Cincinnati, and moved back to Columbus for work, I think you're being a little dramatic here.
I don't know where you're from in the Midwest, but the vast majority of people I interact with around here are extremely live-and-let-live. In fact I can't remember the last time I came across someone or a situation that was actively hostile about beliefs or sexual orientation. Obviously these are just my anecdotes, but I run in a pretty sexually and racially diverse scene and they all love Columbus as well.
Your hyperbole and vindictive reactions to a diverse region of the country are certainly going to help close the divide.
the article has done well to cherry-pick a relatively liberal spot in an otherwise conservative state
Aren't those called "cities?"
arent ashamed to force their backwoods culture on you from the hinterlands
I lived in Cincinnati Ohio for 5 years. How did people force their backwoods culture on you? I had zero culture forced upon me. I was the subject of a targeted racial harassment once, and I remember one unpleasant discussion with a cringe-inducing person once. Most people there in the late 90's/early 2000's were fairly live and let live. Where they weren't, aside from the above, much of this came from the Left, as an instance of the left eating itself.
>In short, I did not want to live in a state where the legislature had nothing better to do than fight the culture war to win votes for the next election.
California doesn't fight the culture war? California is the primary exporter of the left-wing culture. It just happens to conform to your political leanings, so you like it there. And THAT'S OKAY, I'm not saying you are wrong, you're just now on the side that you agree with.
>Yeah, I cant buy a house in san jose
Who cares about home ownership when you can use whatever public toilet you want!
I was raised in the rural midwest and moved to San Francisco for the same reasons as you. It is shocking how much religious extremism, homophobia, and racism exist in the midwest. Growing up in the midwest, kids and adults alike would come up us and tell us we were going to hell, or to go back to where we came from, or call us racial slurs like "sandnigger". Grown adults had no problem harassing little kids at school or the playground. People shot our windows a few times. Racism is so widespread in Missouri that the NAACP has issued a travel advisory and warned minorities to not travel there. Earlier this year a Garmin engineer was murdered in Kansas by a racist who walked into a bar and shot two Indians. There is no way I would raise my children in the midwest.
Sure, but there are plenty of places like that in California as well. Drive a couple hours north of SF or east of Contra Costa or south of LA and you run into similar cultures. CA is the state that created Reagan, after all. San Diego might be the most conservative big city in the nation, albeit in a different type of conservatism.
The Midwest might be generally more conservative, but tech companies are going to started in cities like Columbus, not the rural area.
As someone born and raised in the Midwest (and who takes great pride in that) now leading a company in SF, the difficulty truly isn't lack of capital, it's lack of founder talent (and ideas). People with big ideas that can inspire the best technical leaders to join their crusade. There are plenty of great schools (Michigan, Purdue, IU, ND, U of Chicago, Northwestern, Rose Hulman, Depauw, U of I, and many more) churning out folks that are hungry to work hard and get ahead. What's missing is a sufficient population of 25-45 year old inspiring founders with enough of a nest-egg to take a big risk, willing to put a hold on family life, and with a big idea.
There's a second problem that comes about when these rare combination of things come together - which has to do with cap tables... In that good teams get pummeled on early stage valuations compared to the coasts, resulting in exits that return far less to founders than investors (and thus stunt "the ecosystem" growth that exists in SV), but this is secondary to above IMHO.
Nah. The second thing is the main thing. Your first point is just the typical SF exceptionalism narrative that has been touted by the Bay VC startup ideology for the last 20 years.
The sad truth is, it's not a coincidence that so many of the biggest economies in the world are built inside of self-perpetuated real estate bubbles. Pockets of land trapped in by ocean and mountains. There's a feedback loop involved in companies that get big enough to own their own buildings, their companies' continued growth drives up the value of their real estate which they can re-finance for easy loans.
There's plenty of people who think it makes sense to take the startup culture to cheaper areas like the midwest or Austin. And they "succeed" in founding profitable startups. But they'll never create the next great thing, specifically because the big companies in big cities didn't succeed in spite of their higher costs, but because of them.
I think if I wanted to move silicon valley I'd look for some cheap semi-peninsular coastal city which is currently priced like a midwest city. Then I would drive up that price. I've eyed Charleston SC as a potential target but I've never actually been there to know if that makes sense.
> the difficulty truly isn't lack of capital, it's lack of founder talent (and ideas)
IMO the VC culture in the midwest is also a lot more conservative. The money isn't held by former programmers, as they are in SF. They're usually more finance execs.
I went to one of those great midwest schools (though you missed it). But, I left as soon as I graduated.
Since then I've lived on the east and the west coast (in popular, expensive cities), and nearly all of my classmates are no different. Places they go other than those two coasts? Other well known places... The Texas Triangle, Colorado, Chicago, Florida...
It's exciting and fun to think that the "next Silicon Valley" will pop up in one of those midwest cities that has been in decline since the mid-20th century... But the truth is, if there is going to be a "new Silicon Valley", it will be in a boring, popular (probably expensive) place... I'd sooner bet on the Texas Triangle...
Unless the Midwest replicates California's laws on ownership of IP vis-à-vis employment (i.e. it is illegal for companies to claim employee IP for work done outside of work even via a contract), and that non compete clauses are invalid it's at a huge disadvantage.
Without at least those two the Midwest don't even stand a chance.
Perceived culture in the Midwest is also problematic.
USA is dependent on immigration to fill the science and engineering workforce, which is one of the ingredients of SV revolution. (https://fas.org/sgp/crs/misc/R43061.pdf)
Someone denying there is no racism/xenophobia issue in the Midwest isn't listening in my opinion.
My intuition is that the sex appeal of SV versus Midwest won't be compensated solely by VC money. It will require a cultural change, which has been going backwards those last 10 years imo. And that's why the author wrote this article - not to inform us that Midwest is good, but because there is a real issue in getting talents to the Midwest.
The invalidity of non-compete clauses and the inability to take IP away from employees are, perhaps, geese laying golden eggs for California. It can be argued that they give phenomenal power to employees that figure out the right way to do something and punish employers that won't listen. As a hypothetical, a former employee might start a competing company and let the market figure out who is right. Without these, it can be argued that employees are less motivated to figure things out because they have no way to capitalize on their ideas unless the decision makers of the employer (whom they probably may never meet in their lifetime) buy in to the idea. [1]
The law of non-competes in Minnesota is entirely court-made, in contrast to states such as Wisconsin and North Dakota, where it is governed by statute. See Wis. Stat. § 103.465; N.D. Cent. Code, § 9-08-06. Non-competes are “disfavored” under Minnesota law for being a partial restraint on trade. As such, they are to be strictly construed, with any ambiguities interpreted against the employer. Lemon v. Gressman (Minn.App. 1999).
Acceptable interests include (1) protecting against deflection of trade; (2) protecting confidential business information and trade secrets; and (3) protecting customer goodwill. The question boils down to whether the departing employee can hurt the former employer.
I've only seen one issue of a non-compete being enforced is when a reporter went to a competitor and took the same job and was accused of taking confidential information to his new employer. The judge ruled against the reporter and banned him from working at the competitor for one year:
Higgs wrote that given Ridder's past conduct and his cavalier attitude toward his use and disclosure of confidential Pioneer Press information, it seems to the court that his past actual misappropriation is a good indicator of possible future use of that information.
The court said there is also a substantial threat that Ridder will further misappropriate confidential Pioneer Press information, or use the confidential information in the future.
The judge ruled that restraining Ridder from further misappropriating confidential Pioneer Press information is necessary to prevent further injury to the St. Paul paper's competitive position in the industry.
Make a note the story is from 2007. A decade ago and I haven't seen any case remotely close to this since then.
I was recently having a discussion with the founder of a very successful company. I was asking him how they got their start and their initial customers. They were not from the Silicon Valley originally.
He said it was slow going at first, until they moved to the Bay Area and started going to meetups. He said that meeting potential customers in person was what really accelerated their initial adoption, far more than their write-ups in the press or their "free customers" from their accelerator program.
My point is, that will be hard to replicate anywhere else for a long time. The density of startups and the opportunities that presents will be hard to have somewhere else -- it's a chicken and egg problem.
I had a friend who started a VC in Montreal. You know what happened as soon as the companies got successful? They took a round from a VC in the Bay Area and then moved here. They kept their dev office in Montreal for the "cheap labor" but made their HQ here.
I suspect that is what will happen with these investments too. Most of the companies will probably leave Ohio when they get successful.
And then they'll exit and have a bunch of money to invest where they now live -- the Bay Area.
You're right. There has been no fundamental change, either internal to SV or external, to cause Silicon Valley to lose its status as the epicenter of the technology world and the unparalleled access to capital that the region enjoys [0].
Interestingly, Cleveland in the early 20th century provides a case study that compares favorably to modern Silicon Valley. The key? Access to capital.
First, we have John D. Rockefeller and Standard Oil. Why did Rockefeller move Standard Oil's headquarters from Cleveland to New York City? Two main reasons:
1) a concentration of financiers that he needed to continue to grow his business and
2) oil was flowing to large port cities as the international markets grew exponentially lessening Cleveland's importance in the network. [1]
These were both rational reasons for moving and the second represented a fundamental shift in the oil business.
A research article into Cleveland's entrepreneurial decline in the 20th century points to a similar finding:
"Additional contributing factors may include the destruction of the complementary financial institutions that had supported entrepreneurial ventures in the region and changes in the regulatory regime that advantaged New York and made it difficult for regional capital markets like Cleveland‘s to recover their earlier vibrancy." [2]
In the early 1900's Cleveland was described as such:
"It was also an important entrepreneurial center, with well-developed, largely informal, networks linking inventors to new sources of capital and to product markets." [2]
This sounds a lot like Silicon Valley and especially what you describe in your comment.
[0] Yes, cases could be made that housing in the Bay area, unfavorable immigration climate, increased competition from abroad, and even the maturation of the current mobile environment represent viable threats to the long-term entrepreneurial dominance of the Valley.
[1] Titan: The Life of John D. Rockefeller by Ron Chernow
The situation you describe will be positive for the Midwest. Many of those engineers at the dev office back home have options and, should the company have a successful exit, are well positioned to start new companies or angel invest, and do it where they are. This isn't going to happen overnight, and more teams and founders will stay put and still be successful over time.
Plus, engineering is core to many tech startups. It's a big change in the industry that they are successful having the dev teams back home and bay area investors are cool with that! (disclaimer: I'm the founder of a midwest-startup with coastal VC)
I think you have to specialize on a certain industry, not just tech in general. Minnesota has quite a few startups in medical tech and there are big med tech companies there too that buy these startups. Same in Boston. That's an industry SV simply doesn't understand and being in SV is not an advantage. Banking may be a similar case.
10-30% of their exit will go back to ohio to be reinvested, too. that 10-30% goes a hell of a lot farther out there, where office rent is 1/10th and engineers cost 1/2 as much as bay area.
I don't know what's more amusing: the thought that VCs think they'll get plentiful cheap labor in the Midwest (that's what this is really about) or devs in the Midwest thinking VCs will bring SV-level wages and benefits to them instead of saving on all that because "cost of living."
I work at a Drive portfolio startup. This is neither Drive's nor my employer's opinions on this topic. There are pros for living here (lower cost of living etc.), but I genuinely hate the weather here. I find every opportunity to be out in SF during the winters. Oh and there aren't many meetups/conferences here, which is a HUGE problem if you're looking to grow/network with people as an engineer. People are generally skeptical and uninviting for newer ideas. Hiring is difficult too. If given the chance, I'd choose Seattle or SF.
The Midwest has crappy weather, and rich people as a rule don't like crappy weather. This alone will prevent many investors from moving to the Midwest.
Geographically, Texas and the east coast near North/South Carolina are the most likely places for the next silicon valley. Both are in proximity to large population centres and have relatively good weather, cheap COL, low taxes, and plenty of 'natural beauty' type things that rich people like. Hills, driving distance to ocean, forests, etc...
I lived in the Midwest and IMO it's mostly cold flat and boring endless farmland with little natural beauty and no access to large water bodies outside of Chicago area. It also has high taxes and cost of living. Not really anything attractive about starting business is there.
Remote only is the next silicon valley. Office space in a major city is a luxury, and having to do all of your work 8 hours in a row at a specific time is a waste of productivity.
The next SV is more likely to be China than anywhere in the US other than SV. Massive amounts of capital + appetite for risk and experimentation + love of technology + huge market. Just don't get on the wrong side of the CP and you're golden.
Honestly? Austin is probably already the next "Silicon <Noun>". We have like 160+ people net move here a day and it's a massive tech hub with UT Austin here, Oracle building a big office here, some good coding bootcamps, etc etc. Fastest growing city in the country several years running. Very liberal with plenty of cultural attractions (SXSW, cafes/bars, "keep Austin weird" etc). I'm guessing due to a combination of close cheap land (to build large logistic centers), access to good highways, access to a port, generally permissive state/business relationships, growing young demographic that Amazon will probably build their headquarters either in Austin or somewhere along the Dallas/San Antonio corridor.
I mean, where else is there in the midwest? Illinois is dying under poor governance and high taxes (pension obligations are constitutionally protected until hell freezes over). Indiana and Ohio just don't seem prosperous. Maybe Atlanta Georgia is the only other growing mid-size city outside of the coasts?
Ryan: “I’ve actually done a lot of market research and it actually turns out that southwestern Ohio is going to be the next Silicon Valley. They call it the Silicon Prairie.”
For those not familiar with the episode: the character is totally full of crap; trying to explain that his reason for moving to Ohio has nothing to do with his ex-girlfriend moving to Ohio. Funny to see "Ohio is going to be the next Silicon Valley" come around again (but this time in actual news).
I'm from Ohio and moved SF almost exactly 7 years ago. 8 plus years ago I felt like a complete outsider the the business world. I'd been using linux since redhat since version 2, taught myself perl, php and later rails and javascript. I'd go to small business association "meetups" and events and talk to people about a website I built that would allow non-developers to build customized open source software packages like wordpress/oscommerce/phpbb and have it auto-installed and hosted on a custom domain using ec2.
Even the successful tech investor there, who seemed more lucky than anything, didn't have a clue what I was talking about or why anyone might want to do that. I also went to the local small business offices seeking help and they didn't get it either. If you weren't an automotive, manufacturing or physical product company, they didn't take you seriously, didn't know what you were talking about and didn't see value in anything computer or web related.
I also didn't really know anyone remotely interested in the web or linux except one guy. If I had to sum it up I'd say that they're generally quite a few years behind in everything from technology to civil rights. Finding good employees will be hard but possible. Finding forward thinkers is going to be exceedingly difficult. When I lost my job working on microsoft products at an automotive logistics company, I gave up on Ohio and moved to SF. It was one of the best decisions of my life. Since I moved it's been horrifyingly clear that Ohio is in a downward spiral. I joke that I'd sleep on the ground in SF before I'd go back to Ohio but I'm not entirely sure it's a joke.
The Next Silicon Valley will be in Texas, because I live here :)
That is wrong kind of thinking, but here is my 2-cent thesis, Tech has not outgrown into such mature industry, you will have whole series of regions with robust tech and venture economies, so in that sense there won't be one next silicon valley, but a whole series of mini-silicon vallies.
Wouldn't diversity be an issue in a place like Ohio? My perception of the Midwest is that it's much more homogeneous and less inviting of minorities than California. Consequently it might be hard to attract diverse talent to relocate there.
I used to be a 100,000+ / year flyer as a consultant, plus I spent four years in college in the midwest. I'm a white, straight, male, but most of the country scares me to the point I have no desire to go outside the pacific northwest any longer. I've never been treated so badly by TSA as I was in Columbus, and I'm somewhat disappointed in myself that I did not file a lawsuit. To think that anywhere in the midwest or the southeast could become a prosperous center of innovation? Good effing luck with that. Oh sure, there are pockets where this bank or that manufacturer will settle for a tax deal or cheaper labour, but there's a big difference between that and the west coast culture that enables breakthrough science and engineering.
There is only one Silicon Valley. It's silly to think otherwise, although it seems to be getting recycled constantly by journalists and economic development people.
It's high time however that startups become more popular in the Midwest. If you are profitable, growing rapidly you can raise venture capital in the Midwest. However that rules out the majority of startups. That's a big reason that our best and brightest make the pilgrimage out West.
What we need to see are startup clusters, let the companies stay in place. In Michigan it is starting to happen, but progress is still woefully slow. Angels are in just as short supply as venture capital.
This is cyclical news. It's an amazing marketing campaign for VCs. This is an interesting armchair idea for lots of people, but absolutely inspiring for people VCs are targeting to work for them and shoulder the non-cash component of their risk.
[+] [-] nimbius|8 years ago|reply
I left the midwest for the west coast because of the culture, full stop. I was tired of my state representatives writing my sexual preference off as a disorder. I was angry when the state decided a pharmacist could refuse to sell me birth control and I hated the legislative decree that tried to exert control over what gender got to use the bathroom or not. In short, I did not want to live in a state where the legislature had nothing better to do than fight the culture war to win votes for the next election. Yeah, I cant buy a house in san jose, but at least I dont have to worry about the ten commandments showing up at the DMV in stone or some toothless anti-shariah legislation burning through my tax dollars.
Drive 15 miles outside Columbus and it doesnt matter how many VC firm employees you have in the city, the bible thumpers win this state by a landslide of gerrymandering and arent ashamed to force their backwoods culture on you from the hinterlands. The midwests relationship with silicon valley terminates at the facebook, google, and twitter HTTP connection for a damn good reason.
[+] [-] entee|8 years ago|reply
I see no reason the cities in the midwest couldn't host a tech boom, and over time start to turn the cultural tide as a result.
More globally, this divide makes me sad. I have trouble thinking these people who hold views I find quite wrong are bad people, but it seems somewhere our national conversation has broken down completely. Sometimes maybe for good reasons, but still it's quite depressing.
Edit: typo
[+] [-] gcburn2|8 years ago|reply
I don't know where you're from in the Midwest, but the vast majority of people I interact with around here are extremely live-and-let-live. In fact I can't remember the last time I came across someone or a situation that was actively hostile about beliefs or sexual orientation. Obviously these are just my anecdotes, but I run in a pretty sexually and racially diverse scene and they all love Columbus as well.
Your hyperbole and vindictive reactions to a diverse region of the country are certainly going to help close the divide.
[+] [-] justin66|8 years ago|reply
Not by a landslide. There's a reason it's called a "swing state." (and, regrettably, it's not because the kids dress up and go dancing...)
> The midwests relationship with silicon valley terminates at the facebook, google, and twitter HTTP connection for a damn good reason.
Let's be honest, that is a pretty closed-minded thing to say.
[+] [-] stcredzero|8 years ago|reply
Aren't those called "cities?"
arent ashamed to force their backwoods culture on you from the hinterlands
I lived in Cincinnati Ohio for 5 years. How did people force their backwoods culture on you? I had zero culture forced upon me. I was the subject of a targeted racial harassment once, and I remember one unpleasant discussion with a cringe-inducing person once. Most people there in the late 90's/early 2000's were fairly live and let live. Where they weren't, aside from the above, much of this came from the Left, as an instance of the left eating itself.
[+] [-] Helmet|8 years ago|reply
California doesn't fight the culture war? California is the primary exporter of the left-wing culture. It just happens to conform to your political leanings, so you like it there. And THAT'S OKAY, I'm not saying you are wrong, you're just now on the side that you agree with.
>Yeah, I cant buy a house in san jose
Who cares about home ownership when you can use whatever public toilet you want!
[+] [-] rajbot|8 years ago|reply
[+] [-] Apocryphon|8 years ago|reply
The Midwest might be generally more conservative, but tech companies are going to started in cities like Columbus, not the rural area.
[+] [-] lr4444lr|8 years ago|reply
Funny, I know plenty of people who want to leave east coast cities for the exact same reason with the political poles switched.
[+] [-] 013a|8 years ago|reply
[deleted]
[+] [-] ams6110|8 years ago|reply
[+] [-] adamw2k|8 years ago|reply
There's a second problem that comes about when these rare combination of things come together - which has to do with cap tables... In that good teams get pummeled on early stage valuations compared to the coasts, resulting in exits that return far less to founders than investors (and thus stunt "the ecosystem" growth that exists in SV), but this is secondary to above IMHO.
[+] [-] zzbzq|8 years ago|reply
The sad truth is, it's not a coincidence that so many of the biggest economies in the world are built inside of self-perpetuated real estate bubbles. Pockets of land trapped in by ocean and mountains. There's a feedback loop involved in companies that get big enough to own their own buildings, their companies' continued growth drives up the value of their real estate which they can re-finance for easy loans.
There's plenty of people who think it makes sense to take the startup culture to cheaper areas like the midwest or Austin. And they "succeed" in founding profitable startups. But they'll never create the next great thing, specifically because the big companies in big cities didn't succeed in spite of their higher costs, but because of them.
I think if I wanted to move silicon valley I'd look for some cheap semi-peninsular coastal city which is currently priced like a midwest city. Then I would drive up that price. I've eyed Charleston SC as a potential target but I've never actually been there to know if that makes sense.
[+] [-] misterbowfinger|8 years ago|reply
IMO the VC culture in the midwest is also a lot more conservative. The money isn't held by former programmers, as they are in SF. They're usually more finance execs.
[+] [-] ravitation|8 years ago|reply
Since then I've lived on the east and the west coast (in popular, expensive cities), and nearly all of my classmates are no different. Places they go other than those two coasts? Other well known places... The Texas Triangle, Colorado, Chicago, Florida...
It's exciting and fun to think that the "next Silicon Valley" will pop up in one of those midwest cities that has been in decline since the mid-20th century... But the truth is, if there is going to be a "new Silicon Valley", it will be in a boring, popular (probably expensive) place... I'd sooner bet on the Texas Triangle...
[+] [-] decentralised|8 years ago|reply
edit: I ask this because in Portugal we also lack the entrepreneurial mass to match the tech talent.
[+] [-] JKCalhoun|8 years ago|reply
[+] [-] tankenmate|8 years ago|reply
Without at least those two the Midwest don't even stand a chance.
[+] [-] batmansmk|8 years ago|reply
Perceived culture in the Midwest is also problematic.
USA is dependent on immigration to fill the science and engineering workforce, which is one of the ingredients of SV revolution. (https://fas.org/sgp/crs/misc/R43061.pdf) Someone denying there is no racism/xenophobia issue in the Midwest isn't listening in my opinion.
My intuition is that the sex appeal of SV versus Midwest won't be compensated solely by VC money. It will require a cultural change, which has been going backwards those last 10 years imo. And that's why the author wrote this article - not to inform us that Midwest is good, but because there is a real issue in getting talents to the Midwest.
[+] [-] king07828|8 years ago|reply
[1] This is not legal advice.
[+] [-] at-fates-hands|8 years ago|reply
http://horowlaw.com/employment-law/non-compete-law-in-minnes...
The law of non-competes in Minnesota is entirely court-made, in contrast to states such as Wisconsin and North Dakota, where it is governed by statute. See Wis. Stat. § 103.465; N.D. Cent. Code, § 9-08-06. Non-competes are “disfavored” under Minnesota law for being a partial restraint on trade. As such, they are to be strictly construed, with any ambiguities interpreted against the employer. Lemon v. Gressman (Minn.App. 1999).
Acceptable interests include (1) protecting against deflection of trade; (2) protecting confidential business information and trade secrets; and (3) protecting customer goodwill. The question boils down to whether the departing employee can hurt the former employer.
I've only seen one issue of a non-compete being enforced is when a reporter went to a competitor and took the same job and was accused of taking confidential information to his new employer. The judge ruled against the reporter and banned him from working at the competitor for one year:
Higgs wrote that given Ridder's past conduct and his cavalier attitude toward his use and disclosure of confidential Pioneer Press information, it seems to the court that his past actual misappropriation is a good indicator of possible future use of that information.
The court said there is also a substantial threat that Ridder will further misappropriate confidential Pioneer Press information, or use the confidential information in the future.
The judge ruled that restraining Ridder from further misappropriating confidential Pioneer Press information is necessary to prevent further injury to the St. Paul paper's competitive position in the industry.
Make a note the story is from 2007. A decade ago and I haven't seen any case remotely close to this since then.
https://www.mprnews.org/story/2007/09/18/ridderruling
[+] [-] devmunchies|8 years ago|reply
[+] [-] dbcurtis|8 years ago|reply
[+] [-] walshemj|8 years ago|reply
[+] [-] namlem|8 years ago|reply
[+] [-] jedberg|8 years ago|reply
He said it was slow going at first, until they moved to the Bay Area and started going to meetups. He said that meeting potential customers in person was what really accelerated their initial adoption, far more than their write-ups in the press or their "free customers" from their accelerator program.
My point is, that will be hard to replicate anywhere else for a long time. The density of startups and the opportunities that presents will be hard to have somewhere else -- it's a chicken and egg problem.
I had a friend who started a VC in Montreal. You know what happened as soon as the companies got successful? They took a round from a VC in the Bay Area and then moved here. They kept their dev office in Montreal for the "cheap labor" but made their HQ here.
I suspect that is what will happen with these investments too. Most of the companies will probably leave Ohio when they get successful.
And then they'll exit and have a bunch of money to invest where they now live -- the Bay Area.
[+] [-] heymijo|8 years ago|reply
Interestingly, Cleveland in the early 20th century provides a case study that compares favorably to modern Silicon Valley. The key? Access to capital.
First, we have John D. Rockefeller and Standard Oil. Why did Rockefeller move Standard Oil's headquarters from Cleveland to New York City? Two main reasons: 1) a concentration of financiers that he needed to continue to grow his business and 2) oil was flowing to large port cities as the international markets grew exponentially lessening Cleveland's importance in the network. [1]
These were both rational reasons for moving and the second represented a fundamental shift in the oil business.
A research article into Cleveland's entrepreneurial decline in the 20th century points to a similar finding:
"Additional contributing factors may include the destruction of the complementary financial institutions that had supported entrepreneurial ventures in the region and changes in the regulatory regime that advantaged New York and made it difficult for regional capital markets like Cleveland‘s to recover their earlier vibrancy." [2]
In the early 1900's Cleveland was described as such:
"It was also an important entrepreneurial center, with well-developed, largely informal, networks linking inventors to new sources of capital and to product markets." [2] This sounds a lot like Silicon Valley and especially what you describe in your comment.
[0] Yes, cases could be made that housing in the Bay area, unfavorable immigration climate, increased competition from abroad, and even the maturation of the current mobile environment represent viable threats to the long-term entrepreneurial dominance of the Valley.
[1] Titan: The Life of John D. Rockefeller by Ron Chernow
[2] The Decline of an Innovative Region: Cleveland, Ohio, in the Twentieth Century by Naomi Lamoreaux and Margaret Levenstein http://www.econ.ucla.edu/people/papers/Lamoreaux/Lamoreaux47...
[+] [-] yesimahuman|8 years ago|reply
Plus, engineering is core to many tech startups. It's a big change in the industry that they are successful having the dev teams back home and bay area investors are cool with that! (disclaimer: I'm the founder of a midwest-startup with coastal VC)
[+] [-] maxxxxx|8 years ago|reply
[+] [-] Apocryphon|8 years ago|reply
It's a little disheartening whenever this kind of braindrain happens. This prevents other ecosystems from forming.
[+] [-] philsnow|8 years ago|reply
[+] [-] ourmandave|8 years ago|reply
[+] [-] zitterbewegung|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] sidlls|8 years ago|reply
[+] [-] tzhenghao|8 years ago|reply
[+] [-] forgotpassagan|8 years ago|reply
Geographically, Texas and the east coast near North/South Carolina are the most likely places for the next silicon valley. Both are in proximity to large population centres and have relatively good weather, cheap COL, low taxes, and plenty of 'natural beauty' type things that rich people like. Hills, driving distance to ocean, forests, etc...
I lived in the Midwest and IMO it's mostly cold flat and boring endless farmland with little natural beauty and no access to large water bodies outside of Chicago area. It also has high taxes and cost of living. Not really anything attractive about starting business is there.
[+] [-] thevardanian|8 years ago|reply
[+] [-] unabridged|8 years ago|reply
[+] [-] SkyMarshal|8 years ago|reply
[+] [-] patientplatypus|8 years ago|reply
I mean, where else is there in the midwest? Illinois is dying under poor governance and high taxes (pension obligations are constitutionally protected until hell freezes over). Indiana and Ohio just don't seem prosperous. Maybe Atlanta Georgia is the only other growing mid-size city outside of the coasts?
[+] [-] stinky613|8 years ago|reply
Ryan: “I’ve actually done a lot of market research and it actually turns out that southwestern Ohio is going to be the next Silicon Valley. They call it the Silicon Prairie.”
For those not familiar with the episode: the character is totally full of crap; trying to explain that his reason for moving to Ohio has nothing to do with his ex-girlfriend moving to Ohio. Funny to see "Ohio is going to be the next Silicon Valley" come around again (but this time in actual news).
[+] [-] chiefalchemist|8 years ago|reply
Silicon Valley isn't a pin on a map. It's a culture. It's a collective mindset. It's a process. It's a high-tech Wild West.
It's also an outlier.
Startups + VCs !== Silicon Valley. It's more complex and more complicated than that.
[+] [-] rglover|8 years ago|reply
[+] [-] Mc_Big_G|8 years ago|reply
Even the successful tech investor there, who seemed more lucky than anything, didn't have a clue what I was talking about or why anyone might want to do that. I also went to the local small business offices seeking help and they didn't get it either. If you weren't an automotive, manufacturing or physical product company, they didn't take you seriously, didn't know what you were talking about and didn't see value in anything computer or web related.
I also didn't really know anyone remotely interested in the web or linux except one guy. If I had to sum it up I'd say that they're generally quite a few years behind in everything from technology to civil rights. Finding good employees will be hard but possible. Finding forward thinkers is going to be exceedingly difficult. When I lost my job working on microsoft products at an automotive logistics company, I gave up on Ohio and moved to SF. It was one of the best decisions of my life. Since I moved it's been horrifyingly clear that Ohio is in a downward spiral. I joke that I'd sleep on the ground in SF before I'd go back to Ohio but I'm not entirely sure it's a joke.
[+] [-] sremani|8 years ago|reply
That is wrong kind of thinking, but here is my 2-cent thesis, Tech has not outgrown into such mature industry, you will have whole series of regions with robust tech and venture economies, so in that sense there won't be one next silicon valley, but a whole series of mini-silicon vallies.
[+] [-] bllguo|8 years ago|reply
[+] [-] poulsbohemian|8 years ago|reply
[+] [-] rmason|8 years ago|reply
It's high time however that startups become more popular in the Midwest. If you are profitable, growing rapidly you can raise venture capital in the Midwest. However that rules out the majority of startups. That's a big reason that our best and brightest make the pilgrimage out West.
What we need to see are startup clusters, let the companies stay in place. In Michigan it is starting to happen, but progress is still woefully slow. Angels are in just as short supply as venture capital.
[+] [-] robbintt|8 years ago|reply