Why Facebook went west and Boston lost out

http://www.boston.com/business/technology/articles/2007/09/09/why_facebook_went_west/?page=full

by byteCoder • 19 years ago

18 27 19 years ago

aston2• 19 years ago

I think I probably would've passed on giving The Facebook money at a $15 million valuation during that first year. The article notes that the user base was in the small thousands, so not so much evidence that it had any traction. And there were certainly competitors as well (some of whom actually had a better feature set). Not to mention the whole uncertainty of deriving revenue from the site, an issue Facebook's still dealing with today.

edit: I missed the latter part of the article. It indicates that Thiel chipped in in half of Zuckerberg's "minimum," for well short of his proposed valuation to Battery.

steve• 19 years ago

I don't know what numbers they had bothered to graph up but it seems to me that the evidence of traction was very strong from very early on.

neilc• 19 years ago

1000-2000 users and a $15 million valuation? That seems pretty overpriced to me: even if you could see a positive future, FB's success outside the Ivy league crowd was no means guaranteed.

It's worth noting that Peter Thiel later put in $500,000 for 10% of the company, which would value FB at around $5 million, and that was a few months later.

mynameishere• 19 years ago

I read this far:

an online phenomenon worth up to $6 billion

Whatever. Until the next thing.

axod6• 19 years ago

I agree. I'm bored of the over-hyping.

pg4• 19 years ago

Whatever FB is worth, it would have been a very big deal by Boston standards to have them here.

aston2• 19 years ago

I suspect even had Facebook gotten early funding from someone in Boston, they would've moved out to the Valley (or at least the west coast) for the same reasons many YC companies do. This is mostly a story about Battery losing a potentially good payoff, not a story about Boston losing its one chance to have a young software startup stick around.

pg4• 19 years ago

Kirsner didn't explicitly mention this, but notice here that it wasn't another VC that invested in the deal Battery passed up, but an angel. Angels are a lot bolder than VCs.

The big difference between Silicon Valley and Boston in my experience is that the valley has more and much bolder angels. The VCs in the two places are similar. Boston VCs have a bit less testosterone than valley VCs, but it's not a huge difference. The real difference is the angels. And unfortunately for Boston, angels are the deciding factor in how big a tech hub a city becomes.

nanijoe• 19 years ago

Which brings me to a question I have always wanted to ask... If a startup already has Angel funding, is there any additional advantage to be derived from moving out west?

breck• 19 years ago

Advantages: more hackers, more angels(you can always get more funding, right?), more partnership opportunities, warmer weather, not everyone wheres a Red Sox hat, Arnold will be your governor.

Disadvantages: more expensive, have to build a new network, expensive to move(both time and money), Arnold will be your governor.

pg4• 19 years ago

Yes. For one thing, it's probably not the last funding you'll ever raise. Plus there are other advantages to being in a startup hub, and SV in particular, besides the investors.

See #2:

http://www.paulgraham.com/startupmistakes.html

axod6• 19 years ago

Is anyone else really really bored with facebook and all the news stories/hype/hyperbole surrounding it?

thomasswift• 19 years ago

kinda

paul4• 19 years ago

No.

If you don't think it's interesting, then maybe you aren't paying close enough attention. Anyone involved with consumer web should be watching FB.

trekker7• 19 years ago

Why? Not disagreeing at all, but I'm curious about further explanation.

axod6• 19 years ago

People are incredibly fickle. Wasn't myspace around this 'hype' status last year? What website will be next year? Probably not facebook.

sethg• 19 years ago

I found the article disappointing; the headline and lead promised a story about why, in general, the Valley is attracting startups away from Boston, but the article was a story about Facebook in particular.

tyler• 19 years ago

I think theres a far more subtle reason... because the weather _sucks_ here.

Why Facebook went west and Boston lost out

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