Start ups in Silicon Valley

I realize Silicon Valley is home to three of the biggest companies in the world; Google, Apple and Facebook, along with other highly successful businesses.

If you think building your business in the Silicon Valley makes sense, you might want to think again.

Startups are having a difficult time receiving investment capital. Most of the funding in Silicon Valley goes to the "big" companies that are poised to swallow up the competition. Steep valuations can ensure enormous payoffs, but the soul of energetic young companies is often lost through acquisition.

I understand most people make profit their top priority, but I prefer building a legacy. There’s a huge difference between making money and creating prosperity. There’s a big difference between building a business and creating a family of dedicated colleagues. There’s a difference between hiring people and establishing a healthy work environment. 

A recent article in #Theeconomist titled “Why startups are leaving Silicon Valley” briefly offered insight on why there’s been an exodus from northern California since 2012.

Many startups are leaving Silicon Valley. In fact, 46% of Bay residents say they plan to leave in the next several years. Let’s be honest, lack of funding is only part of the explanation. People are fleeing San Francisco, Silicon Valley and California in general.

The state of California is squeezing the middle class.

We can debate the vicissitudes of failed social and economic policies all day long.  I am not interested in political debate.

Here’s the facts. The cost of living in California is way too high for someone building a business and trying to enjoy a comfortable quality of life.

Based on US Census data, lower to middle income residents in California are struggling to stay afloat. Housing costs are astronomical, and the cost of soaking up the sunshine may have finally become cost prohibitive.

The states new gas tax isn’t popular, either is high property taxes or steep personal income taxes for middle to high income earners.

These facts make starting a new business extremely difficult, for those committed to long term success and personal wealth creation.

Initial financing rounds have declined by almost 25% since 2012. 

I can appreciate the history and allure of Silicon Valley. It’s been the epicenter for technology and innovation. However, times have changed.

There are plenty of places were brilliant young entrepreneurs are gathering where investment capital is more readily available.

Most young entrepreneurs spend so much time seeking capital they neglect vital aspects of growing their business.

The truth is, most companies vanish within 5 years of their inception. Of the 10% that survive, most acquiesce with core values in the process of being acquired.  

I did it differently.

I leveraged everything to finance my own dream, and still do.

After 34 years of building a business the hard way, I enjoy the benefits of relying exclusively on my amazing team for insight, inspiration, innovation and capital. We still compete at the highest level with the best companies in the world in our industry and surpass everyone in the area of audio weather dissemination. 

Being bold. Self-funded. Competitive and vibrant is still possible, and I would highly recommend it. We do it in Minnesota.

Outside egos and money seldom make good business partners.

The cost of living in California is high. The challenges of starting a new business are difficult to anticipate. The personal sacrifice is enormous.  

I prefer eliminating unecessary obstacles. Young entrepreneurs, don't be afraid to build your dreams in a place that's conducive to helping you succeed.

Steve Wohlenhaus - CEO Weatherology Author & Podcast host Anatomy of Success