Why (not to) start-up in the valley?

As you likely guessed from my unusual silence, I went on vacation for Labor Day weekend, spending a few lovely days with my girlfriend and her family in Oklahoma City. Yes, Oklahoma City. One of the rare commonalities binding east and west coasters is their reaction to the phrase "I'm going to Oklahoma"- I could just as well say I'm going to Narnia or Tatooine and receive the same response (if not better). I promise, it's a real place: and even Wikipedia backs me up on that claim.

But I digress.

Over lunch on Monday, my girlfriend's father posed a hypothetical question: how would life be for someone such as myself, trying to make it somewhere like Oklahoma City? My gut reaction is of course to think that there's just not as much opportunity there- I mean, for techies in the U.S. where else is there but the Valley, Seattle and Virginia?

On the other hand, many people have made a small fortune in small town America- Warren Buffet among the most notable. It seems to make sense to me that for internet start-ups, potentially the most scalable and location-agnostic business model outside of finance, location shouldn't be an issue. The obvious sticking point is that at a certain size, attracting qualified local labor or relos might be tough, but there must be at least 100 bright engineers for the taking in middle America. That's enough to get along for awhile. Throw in decreased labor, capital and overhead costs and an improved ability to fly under the radar and there might be something to this argument.

So let me ask you, my exalted (and rapidly growing!- thanks for referring me!) audience. Is the need to be in one of the tech hot spots fact or fiction? Can you scale and "go viral" without being entrenched in the tech community? How does the trade-off stack-up in your mind?

Here's what others are saying:

1. How to Kick Silicon Valley's Butt
-How to Change the World: A Practical Blog for Impractical People

2. One of our goals...is to help build that ecosystem here in the Chicago area, the place we call home. We know we’re not alone...what needs to happen first?
-Silicon Prairie Social

3. Everyone needs to hop into the sandbox and play. And that’s exactly what you get in San Francisco and Silicon Valley. It’s a giant mashup of non-stop events and networking opportunities. Meeting top people and key players is easy. And generally, people seem willing to help.
-Instigator Blog

4. On Bangalore being compared to the valley: But the biggest problem...is the absense of “deal flow”. No one likes to trade capital – if you get in, the only way to get out is the IPO or an acquisition.

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