Home The Advantages of Launching Outside of the Valley

The Advantages of Launching Outside of the Valley

In 2006, Y Combinator founder Paul Graham wrote an essay entitled, “How to Be Silicon Valley.” He argues that a tech hub must have nerds and people with money. At the time, he proposed that Boulder and Portland would be the next tech hubs and indeed both have thrived. Nevertheless, as seed funds and incubators become more common, new tech centers are springing up in some of the most unlikely places. ReadWriteWeb caught up with two mentorship groups to find out the advantages of launching outside of the tech epicenter of Silicon Valley.

Bootup Labs

After moving from the Valley, Vancouver-based entrepreneurs Boris Mann and Danny Robinson looked for a way to continue working with startups. The duo launched

Bootup Labs

to fix the Northern tech ecosystem and pass some of their lessons on to budding entrepreneurs. The group accepts 6 companies per program cycle for two annual cycles. Companies receive 8 months of mentorship, free office space, administrative/legal services and a $100,000 dollar covertible line of credit. In exchange for mentorship and funding, Bootup takes 5% equity from your company. If you choose to use the entire line of credit, they will receive an additional 10%. By attracting a star-studded cast of program mentors including Guy Kawasaki,


CEO Len Brody, and investor and writer

Paul Kedrosky

, Mann and Robinson ensure that their program’s 12 annual spots are highly coveted.

Says Mann, “I asked Flickr founder Stewart Butterfield why he decided to stay in Vancouver and build his new startup Tiny Speck. He answered that he loves living here. Being a place where people love to live is hard to replicate. We have the nerds, we think it’s easier for us to bring more nerds here because of immigration rules (vs. the US) AND because people love it. [We’ve got] mountains, ocean and it’s one of the most livable cities in the world.

Bootup Labs’ choices for its January cycle include event-based community Zedmo, lifestream aggregator Statusly, location-based gaming development service Compass Engine, relevancy-based web surfing aid ReadFu, online farmer’s market Foodtree and enterprise storefront platform Blast Ramp.

Difference Engine

Launched this year by Jon Bradford,

Difference Engine

is based in the North East of England. The group offers applicants £20,000 pounds of investment capital and a 16 week program in business development in exchange for an 8% equity stake. As of January, Difference Engine will welcome 10 teams per cycle, with 2 program cycles per year.

When asked why Bradford believes his program can create the basis for a good tech community he replied, “The North East of England is home to The Sage Group – one of the largest software company in the UK.  As with many other parts of Europe it is not the lack of technical expertise but the lack of pre seed capital and support which reduces the opportunities for young entrepreneurs.  Whilst there is increasing activity with angel investors, it is still less mature that the US market…The Difference Engine provides mentors the opportunity to “get up close and personal” with teams over an extended period of time [and] mentors may ultimately invest in these businesses.”

According to Bradford, one of the advantages of starting a company is Europe is the fact that developers learn to build platforms and businesses with multi-language capabilities. This attention to global markets places European and Asian companies at a potential advantage to their US-based competitors. Difference Engine’s group’s first intake will be in February 2010, to apply for the inaugural program entrepreneurs can submit ideas via the Difference Engine application form.

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The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

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