Nerd/Programmer/VC Paul Graham has posted an essay, How to Be Silicon Valley. (HT to Phil Weiser.) Graham argues that you only need two kinds of people to create a technology hub: rich people and nerds. If you don't have enough nerds, you'll need a great university to attract them. Graham continues:
However, merely creating a new university would not be enough to start a silicon valley. The university is just the seed. It has to be planted in the right soil, or it won't germinate. Plant it in the wrong place, and you just create Carnegie-Mellon.
To spawn startups, your university has to be in a town that has attractions other than the university. It has to be a place where investors want to live, and students want to stay after they graduate.
You need a town with personality to draw in the rich folks and prevent brain drain. Graham cites Boulder and Portland as the two most promising cities-with-personality, but he notes that the existing universities in those two towns aren't great (i.e. not the caliber of Stanford and Berkeley.) I haven't been to Madison, but I suspect it would be in the running too from what I've heard (and seen on Althouse).
I largely agree with his analysis, and I'd argue that the "limiting reagent" to startup growth in Boulder is the cramped budget of the university. So my question is this. How, exactly, do you convince the good folks of the state of Colorado (or Oregon or Wisconsin) to pour money into the university when the technology hub benefits -- esp. in the first few years -- would be concentrated in Boulder (or Portland or Madison)? Or is additional university-private sector collaboration the key?
In any event, Graham certainly understands the geographic preferences of nerds:
Most nerds like quieter pleasures. They like cafes instead of clubs; used bookshops instead of fashionable clothing shops; hiking instead of dancing; sunlight instead of tall buildings. A nerd's idea of paradise is Berkeley or Boulder.
Hard to argue with that.
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