Yesterday I saw this conversation on Hacker News about a post titled "Can Montreal Become an Open Source Startup Hub?"
Technology ecosystems – most business markets, actually — have network effects. And that means that the only rank to have, as an ecosystem, is first place. Best in the world.
The post makes the case that Montreal cannot compete as a web startup with the Bay Area, or even for second place with New York. What's left? Picking a niche and dominating it. The author further argues that for Montreal this is Open Source software startups. Maybe he's right, although I have my doubts. What the post did is make me think about other cities in the world with vibrant startup communities and large pools of engineering talent. Buenos Aires is the first example that comes to my mind, because it's my hometown. It could be Sao Paulo, Madrid, London, pick your favorite major city.
So what's special about Buenos Aires? Could the cradle of Tango become a hub for any kind of software startups? On one hand, Buenos Aires has an lots of bright software developers. On the other hand, Argentinian culture (just like that of most countries in the world, perhaps) is very risk-averse when compared to the US. That can be overcome with time and examples of successful companies and will encourage others to take more risks. There are a few already (Mercado Libre, even though it's an outlier of sorts). On the other hand, one thing the US does well is concentrating different industries or activities in different hubs:
- San Francisco Bay Area – startups
- Hollywood – film
- New York – finance
- Detroit – car industry (disregard the current state of affairs)
- Cleveland – well…
Buenos Aires is a very diverse city, and it has so much going on. You won't see very many waitresses waiting for their big break or overhear many nerds discussing their programming language of choice unless you know where to look. This diversity reduces the serendipity of running into opportunities in a small world like the Bay Area. Also, it makes a talented software developer feel more isolated and willing to emigrate and try to compete in the big leagues. Essentially, I doubt Buenos Aires or any other city can quickly become a hub for any kind of niche software startups mostly because it will have a hard time retaining the necessary talent. Sure, there will be some startups that will do fine but I don't expect the next Google or Facebook to pop up there. What will happen for sure is that startup gurus will visit the city on tour and tell everyone willing to hear them that it's possible for them to pick a specific niche and rule it. Casual gaming perhaps? Latin-American adaptations of concepts that worked in the US such as eBay or Groupon? It's a bit of a consolation prize for the world-class brains who, if born in California, might have created the next Apple. For the time being, the Big League is in the Bay Area.
BTW, the title of this post is a reference to The Simpsons, Episode 22 of season 3.
Nigel Tufnel: [addressing the crowd] We were told they knew how to rock in Shelbyville.
[the crowd 'boos']
Derek Smalls: But nobody rocks like…
[looks on the back of his guitar where he has placed a reminder of the name of the town they're playing in]
Derek Smalls: Springfield!
[the crowd 'boos']
Derek Smalls: But nobody rocks like…
[looks on the back of his guitar where he has placed a reminder of the name of the town they're playing in]
Derek Smalls: Springfield!