Over the last few weeks I’ve been working with a small team of like minded software veterans, investors and entrepreneurs to brainstorm how the Seattle start-up scene could be improved. We’ve now got a private mailing list and several interesting (and not so interesting) ideas flowing around. My ideas probably dilute the quality of the others’ good ideas 
In any case, on some level I think all of us keep coming back to the same set of questions.
1) What are we trying to solve?
2) Is it true that Seattle entrepreneurs don’t have the same opportunities that are available in the Silicon Valley?
3) Can we draw some meaningful conclusions if we ask ourselves how many Facebooks or YouTubes there AREN’T in Seattle?
4) Is there a sufficient network and associated infrastructure already in place such that there are no obvious broken components?
I don’t even really know the answer to #1 if I were to be honest. I think there are two notions that seem to be more prevalent than the rest. First, entrepreneurs seem to feel that it takes too long to close funding rounds in Seattle. Second, is this idea that Seattle doesn’t have the same energy or “support infrastructure” as the Silicon Valley which would otherwise encourage a sufficient number of game changing start-ups on par with eBay, PayPal, Facebook, YouTube, Slide etc.
Is something broken? Do we need a revised mentality? Or are we simply witnessing logical factors of scale from one locale to the next wherein the Valley simply has more tech workers, more venture capital firms and larger universities with more aggressive technology focus. I don’t know the answer. It is obviously true that there are more financing options available to an entrepreneur in the Bay Area. You could spend 3 days in meetings, driving from one end of the corridor to the other and not hit a fraction of the active firms. Thus, there is probably some justification for the frustration that start-up hopefuls feel when making the rounds in Seattle. When there are fewer firms investing on any reasonable scale then each firm is bound to take more time evaluating each deal and scrutinizing each entrepreneur. Fear of loss and competition move needles when push comes to shove. And, when there are fewer serious firms making waves then the overall pace simply slows because it can. I am not sure I would characterize this situation that is inherently associated with something being “broken”. I think it is just a phenomenon of our market here. Ever tried dating in a big city like London, New York or Los Angeles? I admit it’s been a while for me but I do know that when you see that someone special you assume that if you delay in your approach then someone else with a bit more bravado is quite happy to step in and reap the rewards.
In terms of networks, events etc I know we have Alliance of Angels, Seraph, NWEN and so many others. Is it enough? That’s really the question. It was asked; “what is our DEMO?” “Where is our SXSW?” Reasonable questions if you ask me.
One thing I’ve noticed about Seattle. Everyone assumes that everyone knows everyone else. It simply isn’t the case. And that’s why I’m a big fan of more events. I’m lucky in that I think I have a fairly extensive network in Seattle. If I needed a team then I have every reasonable opportunity to find the right people by relying on that network. But, in reality, not every entrepreneur is so lucky. Yet more reality: VC’s don’t see every interesting thing going on in Seattle. Admittedly, Imagekind doesn’t stand out as the next big online social network. I admit that. But, it is as reasonable an investment as so many others that have been made in Seattle nonetheless. I closed a small $2.65 million round in just a few weeks and never pitched a Seattle venture firm. Actually thats not true. I did pitch Mike Slade and Nick Hanauer at Second Avenue although theirs isn’t a fund exactly. The point remains. Anything that can be done to help developers find their CEO the better. Anything that can be done to help CEO’s build out their teams the better. Anything that can be done to insure good projects with good teams get sufficiently funded and within a reasonable time the better. Anything that builds camaraderie within the ranks of the Seattle start-up community the better.
As the ideas swirl continue to swirl about amongst the group I find myself thinking that any idea that is even incremental to what may already be working is just fine. It’s perhaps not about what’s broken. It’s about what can be made better by those who have the initiative, energy and wherewithal to contribute to these kinds of thankless projects. Small steps forward are often harder than they seem.
Kelly, in my opinion, the most important change Seattle could make is to invest more in the University of Washington’s computer science department so that it competes with Champagne-Urbana and Irvine if not Stanford, MIT and Berkeley. Most entrepreneurs here have been imported from elsewhere by Microsoft and Amazon, and many are not technical founders. The entire investment thesis of, say, a Sequoia Capital (fund computer scientists under 35 attacking large markets), is more difficult to implement here as a result.
See:
http://blog.guykawasaki.com/2006/06/how_to_kick_sil.html
And of course! http://blog.redfin.com/blog/2008/02/the_next_silicon_valley.html
I have many comments on the topic “what’s wrong with the Seattle start-up scene.” First I would like to address that the Northwest is one of the most active areas if not the most active area in the country for entrepreneurship and companies being funded currently. We (Keiretsu Forum) have a very clear view on what is going on locally, nationally, and internationally regarding start up companies. So let me address a couple of the questions above. 1) Entrepreneurs lack the resources and capital they need. 2) Entrepreneurs have more access to capital and resources due to the climate of the communities in for example Silicon Valley. 3) As for the comparison of Facebook and YouTubes we do have Amazon, Microsoft, Starbucks to name a few. 4) We do have many education resources but in my opinion we still have a ways to go in the area. I’m happy to elaborate further if you should have a meeting, forum, or get together to collaborate and share our points of view??
Todd Dean
President Keiretsu Forum NW
Todd thanks for this and I would love to meet you to discuss. I agree we have Microsoft and Amazon but the valley had Sun, PayPal, Oracle, Google, YouTube, etc. etc. etc. For every Microsoft and Amazon produced in Seattle there are 10 such companies in California. Microsoft and Amazon seem to be the exception and not the rule. That said, I think you hit the nail on the head with number 1. Entrepreneurs lack the capital and resources they need. And isn’t this the core question? WHY does this phenomenon exist? How do we make capital and resources more prevalent than it is today?
I’m not sure I understand the value of being the Second Valley, playing Chicago to the Bay Area’s New York. Capitalizing on the same forces and targeting the same markets that built the Valley would require a time machine, so the question for entrepreneurs in Seattle is where we place our bets: biotech, “green”/clean tech, post-PC consumer devices with accompanying services, etc.
As for lack of funding or resources, it’s the entrepreneur’s raison d’etre to jump higher, dig deeper, and slice thinner. Get a job at some big company if you want it easy (and can stomach the politics).