Are You Sure You Want to Be in San Francisco?

Over at Signal vs. Noise, 37signals’ blog, David Heinemeier Hansson asks Are you sure you want to be in San Francisco? Here`s an excerpt:

If your idea for a web business is more along the lines of the mundane “product * price = profit” (3P) variety, I think the culture of San Francisco and that famous 20-mile radius around Stanford is anything but helpful. I might even go as far as say it’s downright harmful.

The flush availability of other people’s money is simply too tempting. When you’re not spending your own money, it’s easy to splash on a big open office on day one, a staff of 10+ in no time, and have few worries about paying the bills on the 1st of the month. It takes away much of the urgency to make money that I think is critical to build sustainable businesses. It gives you too many resources to be satisfied building simple tools for niche markets. Everything becomes about catching that huge wave.

I can vouch from personal experience that the line about what happens when you’re not spending your own money is so true. Buy me a beer and I’ll tell you about it.

Naturally, the question comes up: “If San Francisco, the Bay area, and Sillicon Valley aren’t good places to start a web business of the 3P variety, where is?”

David provides a quick list of cities where some interesting applications are being developed, which includes:

• Chicago (and originally, Copenhagen), home of BaseCamp
• New York, home of FogBugz
• Sydney, home of Campaign Monitor
• Ottawa, home of Shopify
• Austin, home of Blinksale
• Toronto, home of Freshbooks

I’m highlighting Toronto not only because it’s the city I call home, but also because there’s a strong small development shop community that’s been building up here over the past few years: we hosted one of the first BarCamps to follow the original, and created DemoCamp, CaseCamp and TransitCamp as well as the upcoming RubyFringe conference, which promises to be quite unlike any other developer conference out there. Toronto also offers some serious quality-of-life bonuses to techies, a very livable city with lots to do at night, Asian food aplenty (including three or four Chinatowns, depending on how you count ’em), a smart workforce and proximity to major cities in the United States (we’re about an hour away by plane from New York, Boston and Chicago).