Three Rules for a Successful Company in Silicon Valley - not noticed, proven with $5mil, and survive onslaught of incumbents
TechCrunch and others covered David O Sacks, CEO of Yammer's post on three things that make it hard to create a successful company in silicon valley.
I think silicon valley as we know it may be coming to an end. In order to create a successful new company, you have to find an idea that (1) has escaped the attention of the major Internet companies, which are better run than ever before; (2) is capable of being launched and proven out for ~$5M, the typical seed plus series A investment; and (3) is protectable from the onslaught of those big companies once they figure out what you're onto. How many ideas like that are left?
You can see the original Facebook post which is public.
David's main point is not that there are a shortage of ideas, but how hard it is create a company.
One of the problems is if your company is in Silicon Valley you are surrounded by your competitors. Staying under the radar, yet proving you have a sound revenue model, and the big guys won't crush you is really really hard. I grew up and spent my first 12 years working for HP and Apple in Cupertino and you learned to keep your mouth shut and not talk shop when you were outside of work.
I do agree with David and I wouldn't build a successful new company in silicon valley. The easiest way to achieve success is not to tell the VC community what the new company is. But, then it is hard to get the $5mil of funding.