There’s been an endless stream of chatter about the differences between the tech ecosystems of Silicon Valley and Seattle, so much so that many have tired of the discussion.
Even so, the topic continues to surface, and it did so again today at 9Mile’s Milestone9 Demo Day as three leading Seattle area angel investors took the stage to discuss trends in the startup market.
Bob Kelly, the corporate vice president of M&A strategy and business development at Microsoft and a new advisory board member at 9Mile Labs, offered an interesting perspective, noting that there is a “dirty secret” about the startups built in the Valley.
Silicon Valley startups typically gain early sales momentum because they sell to other startup or mid-tier companies in the Valley.
But in Seattle — which lacks that sort of dynamic startup ecosystem and robust buying and selling environment —startups need to find real customers who fork out cash because the technology solves a real problem.
“That is a huge asset. It may not feel like the bootstrapping mechanism you get in the Valley,” said Kelly. “But, boy, I’ll tell you what, you get a different kind of company coming out of Seattle. And that is a really, really powerful platform to build from.”
The flip side of that is that the Valley tends to create companies forged with entrepreneurs who have “a bit more of the killer instinct,” while “Seattle is just so nice,” said Kelly.
Seattle entrepreneurs need to balance customer development with “going for it,” said Kelly.
Heather Redman, a fellow panelist and longtime angel investor, added that Seattle is almost in need of a cadre of “sports psychologists” to fire folks up and encourage everyone to “think bigger” and “be more aggressive” and “not play small ball.”
“Ideas in Seattle are sometimes a little smaller than they are in the Valley,” said Redman, an executive at Indix who added that many entrepreneurs decide to “exit early” rather than go for a breakout success.
Redman added that the exit early phenomenon also is a component of the angel and VC community, which tends to take the early money and run, rather than building something longer term. And once tech leaders cash out, they sometimes fade into other pursuits rather than jump back into the entrepreneurial game.
“I would like to see more entrepreneurs who’ve been through a successful startup, start another one,” she said. “That would help tremendously.”
Even with those drawbacks, there are a lot of good things percolating in Seattle.
Later in the talk, Kelly — who previously ran marketing for Azure — touted Seattle’s role as the cloud capital of the planet.
“I guess, the way I see it, it’s like — come on Seattle. We are not second fiddle. Seattle is the world leader in cloud technologies, full stop,” he said to applause. “We truly have the wind at our sail.”
Even with that, Kelly added that Seattle simply needs more people participating as investors and entrepreneurs.
“We need to create more opportunity. We need to create more social fabric to go after this, and recognize that we are in fact a market leader and we are an industry-leading city,” he said.