Corregan recently wrote some quick thoughts about the Atlanta startup scene where he explored some of the benefits of being a part of the community. Also, @jon posted his thoughts on moving his company from San Francisco to St. Louis. Today, I want to explore the largest tech startup scene, the one in Silicon Valley.

Pretty much every tech company in the world will feel the metaphorical pull of Silicon Valley at some point. Whether it's the perceived ease of fundraising or hiring in the Valley, or just the perception that the Valley is where tech happens and everywhere else might as well be the desert. But while the Valley offers tremendous advantages to some businesses, for others the disadvantages tip the overall balance into the red.

One key negative of the Valley is the explosion in costs. Whether it's commercial rents increasing 300% in two years, new graduate salaries starting over $100k, a $100k salary not being enough to buy a 750sf place in San Francisco, the clear trend of prices in the Valley is to move from high to exorbitant. This may not be so bad if your startup just went public. But if you're bootstrapping or still getting on a sustainable growth ramp, you may not want to directly compete with the likes of Twitter for office space and engineers.

Another difference between the Valley and elsewhere is the availability of the talent you need to grow a tech business. To which Valley snark would say "Exactly! After all, how could you expect to hire a Ruby on Rails programmer outside of the Valley area?" While the Valley may have a point here for certain incredibly narrow skillsets, as the Internet flattens out the world, it's much less a factor today than even five years ago.

In fact, since most talented engineers do not live in the Valley (or want to move there -- see also "housing costs"), it can often be easier to find them outside the Valley. And outside the Valley, your startup won't have to compete with Facebook's IPO lucre in hiring. In fact, most cities around the world now have communities of engineers eager to build the next generation of startups. Meetup lists 544 Ruby on Rails Meetup groups in 297 cities around the world, but if you pay too much attention to the Silicon Valley echo chamber, you might inadvertently think that you need to be within 100 miles of SFO to hire a competent Rails engineer.

But what about fundraising? As Mark Cuban recently put it, "there are plenty of sources of capital everywhere". But there are tons of investors in Silicon Valley, right? Sure, and there's more competition for deals. One of the hottest investors, Y Combinator, rarely invests more than $20k in their early-stage deals; there are investors in every town capable of making investments in this range. (If you have trouble raising $20k in your town, you're going to have the same trouble raising in the Valley with the same pitch.) And the money will go further because your costs are much lower. Then when you hit breakout on your business metrics, investors will decide that all of their portfolio investments don't absolutely need to be on the way to Blue Bottle Coffee and make an exception just this once.

But make no mistake about it, building a company outside the Valley will make it incrementally more difficult to raise money. But that could be a good thing, if it means your team spends more time building the business instead of chasing the next round.

Bring all this together and you get a sense of why we decided to base ProjectLocker in Atlanta. Atlanta is a large city (~5.5m) with a diverse economy that is great if you are selling to non-tech businesses. There are lots of talented engineers in the area, and there's a vibrant tech community with hubs at places like Atlanta Tech Village and Hypepotamus. We have a top research institution in midtown. We have a real summer, with real mint juleps. Costs are low, so startups can stretch their cash further. A normal engineering salary in Atlanta can afford the median home, and then some. (This 5 BR place could be bought for about what the average 1BR rental costs in San Francisco. Prefer condos? Check this one.)

In short, Atlanta is a well-balanced town, which is perfect for building the balanced business we're building at ProjectLocker. Being at a distance from the fads and hype cycles of the Silicon Valley echo chamber is a perfect ingredient for building a long-term tech business like ProjectLocker.

Image Licensed Creative Commons 2.0: https://creativecommons.org/licenses/by/2.0/  from Atlantan Mike Schinkel: http://www.flickr.com/photos/mikeschinkel/