We have seen that YCombinator officially moved to Silicon Valley, and TechStars opened an office in Boston. Both areas are technology hubs. Why does this matter? I have heard the arguments about the proximity of excellent universities, but this does not really explain why those two areas are considered so much hotter than others.

New York City should be one of the major hubs. I apologize to those schools that I miss, but it has Columbia University, NYU and Cooper Union. There are other very good universities near the city as well. However, it is not seen as “THE” place to found a startup. Granted, it is not a bad place for a startup, but there is not as much buzz as something in Silicon Valley. The DC/Virginia area is another tech heavy area that is home to many startups as well. There are schools like Georgetown and University of Virginia to feed talent to the startups. Again, this area does not get the same level of hype. Finally, we look at my home city of Philadelphia. It is home to the University of Pennsylvania, Drexel University and Villanova University, while Princeton University is only an hour away. Philadelphia has a good amount of technology companies, but its startup scene is rather light compared to the other cities mentioned.

Location really seems to matter when dealing with money. There are several venture capital firms hovering over the Silicon Valley area. New York is a major world-wide financial hub, so venture capital is always going to be near. DC/Virginia will always have money due to the heavy political scene. On the other hand, Philadelphia does not have a heavy financial interest. There are many financial firms and major enterprises, but the only thing it could be considered a “hub” for would be major pharmaceutical companies. The same could even be said for Chicago and many midwest cities. They could be a hub for insurance companies, but there is not the heavy financial influence that other cities have.

Are things changing with the ease of starting a business and the newer cloud services? I think the distributed nature of business on the internet allow for more people to be involved without regard to location. It does not seem like the location concerns have gone away, but they are not as important as they once were. Many cities have people forming their own incubators. In Philadelphia there are now incubators and smaller angel and venture funds that startups can get funding from. You just have to know where to look.

Does location really matter any more?

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