One reason the Bay Area is so expensive is that the way to make a successful startup is to make the right product, not to pay employees less. So cheaper locations have no advantage.
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Replying to @paulg
Except you get a longer payroll runway on the same capital which gives you more chances to figure out what the right product is.
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Replying to @gortok
In principle that could make a difference, but empirically it doesn't. Probably because good founders can usually raise more money if they need it, even if things aren't quite working yet.
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This interacts in interesting ways with your other tweet, that many companies outside the Bay Area sustain damage in the process of fundraising. In theory, would be better to raise less money from good investors, and then set up somewhere less expensive. Damage min framework.
7:20 AM - 10 Dec 2019
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