I called Seattle a “third tier startup city” in a blog post earlier this week.

Which generated this series of tweets:

After reading them, I thought “geez, I really screwed that up” and replied with this series of tweets:

Here’s the thing that is amazing about Seattle. It doesn’t rank as high as NYC, LA, or Boston in the number of startups funded or capital invested. Here are the NVCA numbers for the first three quarters of 2015:

  1. San Francisco, $9.32 billion, 506 deals
  2. San Jose, California (Silicon Valley), $3.78 billion, 237 deals
  3. New York, $3.05 billion, 272 deals
  4. Boston, $1.05 billion, 158 deals
  5. Los Angeles-Long Beach, California (Silicon Beach), $768 million, 105 deals
  6. Oakland, California, $510 million, 41 deals
  7. Seattle-Bellevue-Everett, Washington, $471 million, 56 deals
  8. Provo-Orem, Utah, $462 million, nine deals
  9. Washington D.C., $456 million, 77 deals
  10. Chicago, $402 million, 57 deals

But the companies that have come out of Seattle over the past thirty years put NYC and LA and probably even Boston to shame. So on a dollars in/dollars in, Seattle outperforms. By a lot.

#Uncategorized#VC & Technology

Comments (Archived):

  1. jason wright

    “8. Provo-Orem, Utah, $462 million, nine deals”an expensive place to make deals.

    1. Campbell Macdonald

      Haven’t seen data, but Domo likely a big outlier here.

      1. Jeff Judge

        Yeah, they raised 200M in April 2015 – and another round recently

    2. fredwilson

      Something is awry with that data point

      1. jason wright

        a new contrarian thesis?money laundering?bad data? yeah, bad data.”nine” – the only deal number expressed as a word and not as a numeral.

  2. WA

    A quality versus quantity conversation perhaps.

    1. fredwilson


  3. jason wright

    nothing whatsoever to do with today’s post, but i liked this i saw on Hacker News;

    1. JimHirshfield

      That is super duper cool. Thanks for sharing.

      1. jason wright

        so what’s Kansas got going for it?

  4. JimHirshfield

    I never understood why they break out SF, San Jose, and Oakland separately… it’s all the same geo-economic region. The greater Seattle area is bundled, as is Provo, and Boston, no doubt includes surrounding towns. So, I see this as a way to make cities outside of the SF Bay Area feel better about themselves; less delta in the numbers then if bundled at #1 spot.

    1. rossgarlick

      I wonder what the Manhattan vs. Brooklyn breakout would look like?

      1. JimHirshfield

        Do we get to count Google’s Manhattan originated revenue as part of that? 😉

    2. Rob Underwood

      Similar question for Denver-Boulder though I’d defer to those communities and the people there as to whether they consider those single or separate ecosystems. From my vantage in Brooklyn I think of them as one and the same startup ecosystem, but don’t know if that’s how the folks on the ground see it. NVCA breaks them up –>

      1. Rob Underwood

        @bfeld:disqus – what’s your take? One or two separate?

    3. Beau Giles

      As someone who just moved to Berkeley it is fascinating to see the East Bay be so high now. For the longest time it’s been on the outside looking in.

    4. LE

      I never understood why they break outYou can address that with “they”. The thing is anyone can create a list and back it up with any data that they want. San Jose is roughly 56 miles from San Francisco. Bundling it with SF would make NYC #2 on this particular list. 10 is arbitrary of course.

    5. John

      Actually Provo wasn’t bundled or it would have Salt Lake City listed. Provo/Orem are barely even a city when they’re combined :-)That said, how extraordinary that they make the list and only have 9 deals.

      1. JimHirshfield

        Must have been some gigantic deals

  5. William Mougayar

    I lived in Seattle & went to university there (U of Washington), and was there actually when the Super Sonics won their first (and only) NBA title.The Microsoft spill-over effect in Seattle is huge and has been going on for a long time. Microsoft started producing millionaires in the early 90’s and many of them are quiet, and they stay in Seattle and fund other companies. And prior to that, the Boeing effect is as significant in terms of employing engineers and casting a technology aura on the city.

    1. Drew Meyers

      When are you coming back for a visit?

      1. William Mougayar

        ha…am due 😉

  6. kenberger

    Oakland is ahead of Seattle?! Wow.

  7. awaldstein

    Big fan of Seattle, lived there early on and first learned the power of communities as a market.Marketer for the Pike Place Market, Bumbershoot Festivals, ghost writer for a UW professor and late night radio crazy person.Cool town. Grabbing the NY Times and heading out on the Ferry on Sunday morning was a dream.

    1. TeddyBeingTeddy

      Dungeness crab from PPM dunked in butter, dang that’s some goodness.

    2. BillMcNeely

      Very walkable city. Loved the ferry rides

    3. William Mougayar

      Seattle and Vancouver: best fresh salmon variety you can find anywhere in NA.

  8. Rob Underwood

    My one ask is when the discussion inevitably gets around to Portland, we remember Portland’s outstanding seafood, world class beer, epic coffee, and endless outdoor activities, along with its amazing, thriving startup ecosystem. Portland, Maine is truly an incredible place to live, work, and do business!I also hear there is a city called Portland in Oregon named after Portland, Maine. I think it’s near Seattle.

    1. TeddyBeingTeddy

      The dream is alive in Portland…

      1. Guesty McGuesterson

        The dream of the 90s 😉

        1. TeddyBeingTeddy

          Portland… Where young people go to retire.

          1. TeddyBeingTeddy

            It just never gets old. All the hot girls wear glasses. So true.

          2. LE

            Oh yeah I’ve seen but had forgotten about it. It’s great.

      2. Rob Underwood

        The dream is certainly alive Portland, Maine (and I suspect in Oregon too). Looking at the raw data, Portland, OR did $161M in 2015 VC funding with a population of 2.4M and Portland, Maine took in $88M with a population of just over 500K.

        1. TeddyBeingTeddy

          Portland, Maine should be sued for trademark infringement. Trying to profit from the likeness of OR. It’s like the cheap knockoff version of a hip expensive Urban Outfitters burlap purse with a bird on it.

          1. Rob Underwood

            Let’s just remember which city came first, and which city was named after which. The cheap knockoff is out west my friend.Lobster > Salmon.

          2. TeddyBeingTeddy


          3. Rick Mason

            Actually it was Maine, Michigan and Oregon in that order. Michigan acknowledges the Maine heritage in its name, Oregon does not and it came last.

          4. Rob Underwood

            Was Portland, MI named after Portland, Maine? I’ve been reading American Nations (MUST read) and I know there was a migration from New England to the upper midwest.Portland, Oregon was definitely named after Portland, Maine and the result of a coin toss between a Boston and Portland, Maine native.Back to Seattle, subject of today’s post — interesting history I read in American Nations this past weekend … there was a big surge in migration in the 1840s and 1850s from eastern Maine, especially Machias, to the Seattle area:”The East Machias, Maine, lumber firm of Pope & Talbot founded the towns of Port Gamble and Port Ludlow and transported both sawmills and workers from the eastern Maine coast in an organized migration that continued for seventy years. (‘ It seemed everybody there came from East Machias or his father did,’ one Port Gamble veteran recalled a half century later. ‘We always had baked beans and Johnny bread at Gamble and plenty of codfish.’)”

          5. Rick Mason

            I can’t find it online but I do remember being told that Michigan’s Portland was named after the Portland in Maine. The city was incorporated in 1833, before Michigan became a state and a good 18 years before the city in Oregon.

        2. Jess Byrne Knox

          Thanks Rob. The stuff that’s happening in Portland is really exciting. We work really well with Boston and consider ourselves part of the larger New England ecosystem. There are some great things happening in Maine including Maine Accelerates Growth and, in a few weeks, Maine Startup and Create Week (MSCW) happens for the third time. MSCW has brought more than 4k people from 24 states to Portland to celebrate and learn about high-growth innovation and design. It’s an exciting time for us to learn from the work that a lot of other places are doing too. http://www.mainestartupandc

    2. Sebastien Latapie

      Was not expecting that one, made me laugh. Must say Portland Maine is quite nice. Go up and around there for surfing quite often!

    3. Rick Mason

      Believe it or not there’s a Portland, Michigan where I once had a startup. It’s between Lansing and Grand Rapids. Picturesque small town with two rivers and miles of riverwalk. They’ve even got a bookstore which much larger towns in Michigan lack these days.

  9. Tom Labus

    The entrepreneurial spirit is alive and kickin’ all over the country and growing. That’s great news for all of America.

    1. pointsnfigures

      When you dig into the data, it’s not. Headlines are nice, but small businesses (cash flow, lifestyle) are not starting at the same rate they used to.

      1. Tom Labus

        Steve Case tells a different story in his book

  10. Alex Murphy

    This is turning the attention to outcomes rather than investments, and that is a good thing.When I read your post, the one thing that struck me was your comment about finding talent, and that you thought it is harder to find in third tier markets.Everything I have seen suggests that it is harder to find talent in the first tier markets. More importantly, it is MUCH harder to keep talent. And I believe that this is one of the reasons you see a much better ROI in Seattle, and probably in other markets too.Great companies are not built by people that come in and leave quickly. They take time and commitment from the entire team from the top to the bottom.Perhaps this means there should be more investing outside of the big four regions.

    1. someone

      if I’m not mistaken, that’s why Microsoft moved from Albuquerque to Seattle instead of Silicon Valley…lots of CS talent from UW, but not the same level of competition

      1. Adam Gering

        William H. Gates Sr. and III are both natives of the Seattle-area, probably had more to do with it.Bezos came for combination of engineering talent + smaller market to collect sales tax versus CA.

      2. anne weiler

        In the early days Microsoft hired more engineers from my alma mater, University of Waterloo (also called UW), in Canada than anywhere else. This made Seattle’s UW angry, and ultimately they worked to improve their program.

      3. Jim Ritchie

        I’m a Seattle native, have friends that went to HS with Gates, and spent time with Microsoft in late 80’s. MS moved back to Seattle as this is Gate’s hometown, nothing more.

  11. TeddyBeingTeddy

    Smart CYA post. People are too sensitive, ball don’t lie… Neither do numbers. I like that you’re unafraid say things that are controversial but true, I hope that doesn’t change mon ami.

  12. BillMcNeely

    Where do you think Dallas fits in?

    1. JimHirshfield

      Let’s make Fred write a post about every city that has at least 5 startups, hahahaha

      1. BillMcNeely

        I was just interested in what an informed outsider thought of Dallas’s place in the world vs what the Homer’s like to project

        1. JimHirshfield

          Mark Cuban needs to jump in here, I think.

          1. pointsnfigures

            My personal experience with Texas is it is percolating but it’s about 5 years behind Chicago. Great bones to build off of in Texas.

        2. Rob Underwood

          My informal, admittedly not scientific, gauge is to where people under 30 I talk to want to move (or where they intend to stay). This includes folks right out of college, folks who have just finished graduate school, and those who might have done consulting, i-banking, PE, or the corporate world more generally and want to try “the startup thing.”I hear (and see execution on a move to) the Bay Area, the Pacific Northwest (Seattle; Portland, OR), Denver/Boulder, and LA a lot. Living in NYC, I talk to lots of folks doubling down on NYC. I hear New England once and while, both Boston and further north. Respectable numbers to Chicago and a few other spots in the midwest too.Whenever Texas comes up I hear Austin. Not only does Austin of course have the great annual advertising of SxSW but I think the perception of it as being more progressive than the rest of the state also help it’s “brand” in the eyes of many young people.I have had the opportunity to work on projects in both Dallas and Austin and think they are both great cities. But I think Dallas, perhaps unfairly, continues to suffer from the perception as not a particularly tolerant city and I think that likely hurts its ability to attract some top young talent, both engineering and business/finance. As has been discussed a lot here and otherwise, at the end of the day startups are collections of people and as such its the talent that is most essential.A few comments here today about the role Amazon and MS play in the Seattle ecosystem. Dallas has companies like TI and AT&T. How are they helping to shape and grow the startup community there?

          1. LE

            Texas is one of those places that talks and thinks very highly of itself. It’s kind of like the Trump of states.

        3. sigmaalgebra

          Once I was interviewed at a venture funded startup in Plano, TX — that’s a little north of Dallas, right?The interview was a wild joke: The company was in total deep, smelly, sticky stuff. Why? Their technical guy had just left to return to his university slot.The main guy left was a former IBM executive. He was energetic, determined, all in on his IBM uniform, firm handshake, meeting eye to eye, serious demeanor, alpha male, top dog, in control, your no nonsense, rock solid, bottom line oriented, ideal business executive. He was also dumber than paint, hopeless, worse than worthless, the leading guy on the team to play Drawback.When I got there, his venture partners were there to meet me. They were darned concerned, easy to meet, had read my resume, e.g., about my time at FedEx, and glad I came.Alas, dumb-dumb CEO met me at the door, first thing as I passed the receptionist. In about two nanoseconds, he gave me a grade of F and later declined his interview slot with me. Since I’d been at IBM Watson Research, apparently he expected me to be like him or at least as he envisioned himself. Of course, he wanted the handshake, the eye contact, the leaning forward, etc. But especially he expected me to know his name, but I didn’t. I’d communicated with some of his people, but I’d never gotten any mention of the CEO.His little startup was doing designs of the core of the Internet, e.g., with multi-protocol label switching (MPLS), border gateway protocol (BGP), etc. The question was, given internet protocol packet flows at the boundary of what was to be designed, what should the design be to carry the packets, with good reliability, and with good speed, at least capex and/or opex, while robust to growth scenarios. That simple, little, easy problem had recently been the subject of a Goldman lecture at Johns Hopkins by T. Magnanti, Dean of Science at MIT. Of course, that was Alan Goldman, Member, US National Academy of Engineering and world expert in the applied math for the design of networks to move things. And Magnanti, of course, was a world expert in related topics in the applied math of optimization. Of course; sure; no doubt; as expected; we’re deep into NP-complete here, appropriately enough since the first, big book on NP-completeness was written at Bell Labs from their work on network design problems.Yes, I knew Goldman: He was the Chair of the committee that approved my Ph.D. dissertation research in stochastic optimal control for Johns Hopkins.And I had been working on that problem of MPLS and BGP network design, right, just as Magnanti described, right, via applied math.And, the technical guy at that Plano startup? Right, good at the applied math.So, the Plano startup had a serious and challenging applied math problem, in optimization, really combinatorial optimization, and their good mathematician had just left. I was there to fill the gap.The VCs saw that. But dumber than paint CEO was looking for handshake style!Sure, one of the best tools for that work was some serious optimization software called C-PLEX by the world expert, from Rice University, R. Bixby. Yes, at one point, SAP took C-PLEX quite seriously. Likely so did most organizations with important optimization problems to solve and serious competence in optimization. C-PLEX is like a good violin, a darned good tool but need some good competence to get good results from it.So, for part of the interview, I sat before their main staff. They wanted to know about programming languages, especially their favorite, C++, and in particular, about inheritance hierarchies for object oriented design and programming. Fine with me; I’m willing to program, even in a nonsense language like C++. And if they want to have an inheritance hierarchy, fine with me, but mine will likely be only one level deep, at most two and there only rarely!Then they did want to know about my background in optimization. Well, that could take some time, but I mentioned the most recent problem I’d solved — a 0-1 integer linear program with 40,000 constraints and 600,000 variables. I’d gotten a feasible solution guaranteed to be within 0.025% of optimality in primal-dual Lagrangian relaxation iterations in 905 seconds on a 90 MHz PC, in Fortran, calling the IBM Optimization Subroutine Library (OSL). That was a darned good example of the background that company desperately needed. Gee, I’d written out my own derivations on non-linear duality theory, looked at several approaches, selected one, added the detail of the Lagrangian relaxation, written the software exploiting structure particular to that problem, and had gotten just terrific results for the time.Then the staff, having heard that no one can solve NP-complete problems, concluded that I was lying. The staff made a total mess, grade at most D-, out of the content of a first lecture on the challenges of NP-complete problems. We’re talking, for that company and its challenges, totally hopelessly incompetent here.The staff told me what they were doing, essentially some slightly tweaked version of total enumeration. Could be okay if want to wait for the time of several universes, maybe literally!Then in a back room they had a recent high end PC and a copy of C-PLEX they were ignoring.Gee, if there’d been a way to short the stock!!!!Well, soon I was escorted out of the company early and driven back to the airport, with no thanks and no hint of an offer.There were two common problems at work there:First, there’s the problem of not invented here with the special case that, since we are here and have been for a while, we are the experts in our work, and no one from outside can know more than we do that is relevant to our work.Second, there is the old expectation from, maybe, Henry Ford’s plants, that supervisor knows more, the subordinate knows less, and the subordinate is there just to add routine muscle to the superior knowledge of the supervisor. So, apparently that company had a CEO who believed that the most important qualification was his handshake style!Bottom line: Not so long later, I heard that they had gone out of business.Yup, we’re talking dumb-dumb here!Darwin will have a lot of fun with people who read silly, popular articles on how to solve problems in combinatorial optimization and then dive into significant real problems!People to take seriously in such work include Alan Goldman, Bill Cunningham, George Nemhauser, Ellis Johnson, Robert Bixby and Tom Magnanti, and I know all of them but the last two. At least I know whom to call and will be able to understand what they say!So, that was my encounter with a Dallas startup! But, as I recall, I did get a good Texas beef BBQ sandwich!

    2. Rob Underwood

      Using the criteria and data of Fred’s initial post – capital invested per NVCA – Dallas is 22nd for Q1 to Q4 of 2015. 28 deals worth $212,134,100. See data at….Incidentally to my Portland/Portland comment,…, below — Portland, OR did $161M and Portland, Maine took in $88M. Pretty good given Portland, Maine’s metro area population is just over 500K and Portland, Oregon’s is 2.4M.

      1. BillMcNeely

        Wow we have some work to do!

  13. falicon

    “Funded” as a benchmark for anything doesn’t really make sense anyway.

    1. fredwilson


    2. LE

      It actually makes as much sense as sports makes sense. People derive a sense of pride when something that they are in some way associated with does well. It gives an emotional boost. They feel it elevates them. [1] I was depressed for a day when Philly wasn’t mentioned in Fred’s post. But I pulled through and didn’t have to resort to drugs.[1] My brother in law beamed with pride when he told me that someone who won “The Voice” (god I don’t even remember if that’s it might have been some other show) went to his small high school in a small town in upstate NY. You know you come from nowhere if you start to mention that type of association. Nobody from NYC talks about someone who has made it that came from NYC. Nobody who went to Harvard has to point out important people who went to Harvard.

      1. falicon

        I dunno, I think there are a lot of “life lessons” packed into sports (and games in general)…almost always without serious repercussions.At the end of the day, in sports (and games), the winning and losing doesn’t really matter. The trying, the struggle, the competition, the teamwork, the approach, and the sportsmanship of it all makes a ton of sense and, I think, is crucially important.That all being said…you can make the argument that keeping score in sports is kind of like keeping track of funding…some people probably care deeply about it, but it doesn’t really matter that much.

        1. LE

          I was actually talking about watching sports as opposed to playing sports. However with playing, the serious repercussions in playing are injuries which can be life long and create a need for pain meds and a lessening of quality of life. We are seeing that now. (Ntim, just read some doctor said head injury most likely led to parkinson’s for Ali). Sure of course there is an upside as well.Noting that people who don’t play sports also learn life lessons in other things that are valuable that in theory the people spending their time on sports are not learning. [1]the teamworkImportant but probably not as important for certain types of entrepreneurship.[1] All of those guys in high school who couldn’t play sports but studied and became doctors or lawyers that the girls didn’t fawn over and ignored.

          1. falicon

            Watching sports is same as watching any other form of entertainment really. If you played a given sport you might appreciate the drama a bit more, but regrdless there is what you think should happen, what you hope will happen, and then of course what actually does happen…it all mixes together tomake for some compelling stuff at times (I can get really into anything if someone does a good job explaining the struggle and the strategy of it all #easily_hooked)

          2. LE

            Watching sports is same as watching any other form of entertainment really.Except that watching sports is live and most other forms of entertainment can be watched when you want. That makes sports particularly interuptive to some peoples lives. Plus it tends to be more addicting I think than other forms of entertainment. With the exception of course of video games and now apparently watching others play video games.That said I clearly understand that sports is an art form and in a way wish that I could appreciate it and watch it with others. Other things are an art form to me that I watch, but nothing so compelling that I would sit inside on a nice day (like my father in law used to do) watching a tennis game. Although in all honesty if that makes him happy I guess that’s good, not bad.(I can get really into anything if someone does a good job explaining the struggle and the strategy of it all #easily_hooked)That’s interesting. I wonder if that is typical for people who like sports or just some people who also like sports or both. What you are saying is that if something is an art form you can learn to appreciate it. That makes sense.One thing that never made sense to me with sports. Why do the coaches and the announcers have to wear sport jackets and ties. Why not dress casual. What’s with that. Why the holdover from the 1930’s?

  14. ZekeV

    Seattle is great. But is it really fair to include MSFT and AMZN as “venture-backed exits”, given their very limited private funding history? This isn’t return per value invested, it’s that these companies did not really follow the series funding model.

  15. Mario Cantin

    You eat crow well…

    1. fredwilson

      It must be done. When I am wrong, I am wrong

      1. Mario Cantin

        It’s not who’s right, it’s what’s right.

  16. Sandi Lin

    I’m a VC backed entrepreneur in Seattle ( IMO is Seattle is absolutely first tier for talent but third tier for investment, which is consistent with the data above. While the market should theoretically correct this imbalance, it hasn’t. And the gap will continue to widen as the AMZN boom is now generating more US work authorized talent. My theory – SF investors strongly prefer traveling to LA/NY as their secondary markets, plus few firms have the expertise or patience to develop B2B or enterprise. Consequently, startups in Seattle have turned to customer revenue much earlier in their lifecycle, worked tirelessly towards PMF, and are arguably stronger as a result. In a funding climate that is turning towards smart revenue growth, this “should” work in Seattle’s favor. But I remain skeptical since few outside investors are actually willing to actually place bets here.

    1. pointsnfigures

      “few firms have the patience or expertise to develop B2B or enterprise” so true. Seattle is similar to Chicago. Ironically, people have told me the University of Washington is very similar to the University of Illinois in terms of culture and kind of student.

    2. todd sawicki

      @sandilin:disqus – I’ve never felt a VC, especially a b2b vc, wasn’t willing to do a deal in Seattle. Almost any serious firm is well aware of the many really great outcomes here with Zillow, Tableau, Zulily and many more with recent hugely successful exits. I’ve talked with many and Seattle was never a stumbling block. I think the bigger problem is at the angel/seed stages where being close to your deals is perceived to be more important. We struggle with early money, less with later money IMO.

    3. sigmaalgebra

      I’ll give you an up vote and a virtual, imaginary hardy hand shake if you will unwind the TLA (three letter acronym) PMF with the meaning you have in mine, likely not Presidential Management Fellow or Pretty Mother F???

      1. Amar

        Product Market Fit

        1. sigmaalgebra

          WOW!I couldn’t guess that one!I wasn’t any good at Scrabble, either. My wife was brilliant at Scrabble. We played, and she won by wide margins. We kept playing, and I did improve, but she improved faster and the margins got wider instead of narrower! Then she refused to play me anymore!She also told me how she was so good at spelling — she could see the words!I don’t like acronyms.It’s no joke: Females have better verbal aptitude. Males have better spacial aptitude. These are generalizations, but they no doubt hold on average. That’s just part of the way things are. So, now I’m politically incorrect!

    4. Donna Brewington White

      Thanks for the insightful comment Sandi. Your observation about Seattle talent got my attention. That’s a bold claim. What causes you to say this?

  17. pointsnfigures

    Let me ask this question to the community knowing my own confirmation bias before I ask it.Which cities have open networks that are easy to flow through, get plugged in and meet people? Which cities does it matter who you know, and there is a process to get plugged in?

  18. pointsnfigures

    Lump all the northern CA cities together. Clearly first tier by a long way. NY and Boston are next. LA next. Seattle, DC and Chicago next. Advantages of these cities are density of people; at least one or two industries with a lot of talent technical and marketing; ready customers; easier to recruit talent to these cities despite higher costs of living etc. Each city is a magnet in it’s own way for a much broader region.

  19. Matt Zagaja

    The secret is obviously Starbucks which provides the fuel for the success of all other start-ups.

  20. Salt Shaker

    When I look out my downtown apt window in SEATTLE I see this (no stock photo either). When I look out my NYC window I see a guy scratching his balls in the apt across the street. I’ll let you decide which is a better view.Net Net: I prefer a different type of ranking, it’s called Quality of Life.

    1. Brandon G. Donnelly


    2. Drew Meyers

      indeed. NYC and Seattle are different beasts. both great in their own way.

    3. LE

      Yeah but as you mentioned yesterday, your Dad made money in that town with guys scratching their balls. (Love that characterization by the way).That said I do love the way people in NYC go crazy with shitty views of water towers, old buildings with HVAC units, and especially the importance that they give to a view of the Empire State Building. Like it’s better than sex or something.Attached [1] is a picture from the top of a building my Dad had his business in in the 1970’s in Philly. (I took the picture and printed it). Later they turned the building into apartments. At the time nobody thought much about the view out the window at all. The city? It was considered dirty and messy. People wanted grass and trees (or water as is your case).I later had an apartment in the city with a great view of the same bridge. It was cool for a few weeks (and when people visited) but honestly you get tired of it.[1] The arrow in the photo shows the canaries in the coal mine. Artists who had started to live in the area in old warehouses. The wholesalers and just about everybody else thought they were crazy….

    4. Rob Underwood

      For what it’s worth newly “hot” neighborhoods like Sunset Park in NYC, emboldened by developments like Industry City and apparently a proposed light rail system I hear one of the local VCs is behind, have similar views. I think you owe yourself a better view than a ball scratcher.If we’re going on sunset ferry views only, I’d go with this one:

      1. Salt Shaker

        Started exploring BK a bit before I headed out to Seattle. Def more bang for your buck vs. Manhattan, but pricing still pretty high. Nonetheless, I plan on revisiting when I’m back in town. I’m a NYC boy at heart and that’s likely not gonna change.

        1. Rob Underwood

          Cool. Ping me if you want to do a bit of a Bk tour. So many great spots. Looking forward too to our host giving in soon and making the Brooklyn leap — he’s going to scratch that itch eventually.

    5. Drew Meyers

      Where in downtown do you work? (I work at Galvanize/Impact Hub)

    6. creative group

      Salt Shaker:rain rain go away and come back another day.Quality of life of rain. Seattle is a lovely place to visit and leave to a happier destination. (Coming from being nurtured in New York, NY and landing after a half century in sunny Arizona. (Which is hotter than hell for the next three and a half months) There are positives and negatives everywhere.Suicide rate in Seattle? 2 according to one source. Can’t believe it is nearly that high.http://socialcapitalreview….

    7. Susan Rubinsky

      Quality of Life. Amen.

  21. bfeld

    Seattle is special.Part of the dynamic you are seeing is a much smaller funding base (less VCs). The smaller funding base is prevalent in many other markets and, when linked to a strong entrepreneurial talent base, generates a huge opportunity for both founders and investors.We’ve been investing in Seattle for a long time. Currently active investments include Moz, Rover, Glowforge, Square 5, Pioneer Square Labs, and Impinj. There’s also a very vibrant Techstars program there (and Seattle was the home of UP Global / Startup Weekend, which is now owned by Techstars.)If you ever want to do a Seattle field trip some day, I’m game to go with you and have some fun together.

    1. TeddyBeingTeddy

      Seems like a lot of the tier 1/2 cities have tier 1 colleges. Stanford, MIT, Harvard, NYU, NU, UofC, Berkley, UCLA, UT, and so on. Where is the talent in Seattle coming from?

      1. rick gregory

        The UW CS program claims to be a top 10 program (http://www.cs.washington.ed… and the school in general is one of the top public schools in terms of research dollars, etc.Also, it’s important to remember that we can draw on some of the Valley talent who want a different lifestyle than the Valley provides while still being a short plane ride away.

        1. TeddyBeingTeddy

          US News claims it’s ranked #46, which I would trust over UW’s ranking of it’s own school. Nevertheless, it is a pretty campus – and Canoeing there is awesome, which is nice.Agreed that Seattle (and Portland) are a solid alternative for people to have a much better lifestyle and actually build equity. I’m bullish long term on those areas; folks will eventually realize the south bay is basically a series of strip malls…and Nola isn’t actually the coolest bar in the world.

          1. Salt Shaker

            UDub CS grad program ranked #6 by US Newshttp://grad-schools.usnews….

          2. TeddyBeingTeddy

            It’s a very nice school, no doubt.

          3. rick gregory

            /shrug – I’d love a more informed ranking from someplace like the ACM but the point is that the school’s decent or better. The PNW is also a place where people from the Valley can work if they want a different lifestyle than the Valley affords, yet be close to SV.I think the real story behind both posts is that while the Valley is still preeminent there are 5-10 other markets where things are happening. it’s no longer Bay Area or nothing.

          4. TeddyBeingTeddy

            Agreed. And I sincerely believe Seattle is a better place to live than SF. Relatively affordable too , but not for long!

    2. todd sawicki

      @bfeld:disqus I’ve been talking to @fredwilson:disqus and @gothamgal about visiting Seattle since I started working w/ Fred at Zemanta. Let’s keep working on them!

    3. daryn

      Con: people in Seattle are easily outraged when they think they’re being dissed… or when their investor spells their name wrong. *cough* Brad *cough* :)There’s also certain sensibility here about staying close to the money which is great and practical, but steers our successes to certain types of companies.We’d love to have you visit, Fred. It’s been too long.

      1. bfeld

        Square 5. Spare 5. That’s not spelling something wrong. That’s a total brain fart on my part.

        1. Julie963741

          I currently earn about 6,000-8,000 dollars /a month working from home online. For everybody willing to do simple computer-based jobs for 2h-5h every day from your house and make valuable payment while doing it… Then this work is for you…

      2. Mark Essel


  22. Bernard Desarnauts

    And if you add Starbucks and Nike to the Pacific Northwest scorecard, there is obviously something quite special in their water (besides lots of it?)

  23. Shane Jones

    Comparing 2015 funding data to 2015 market cap data is an apples to oranges comparison. If the average venture exit is 10+ years from the seed investment, you need to compare today’s exits to last decade’s investments. A decade ago, Seattle was a tier two city. In the last 10 years, a lot of other cities have grown their startup community faster than we have. Based on the current funding environment in Seattle, will we be showing tier two style exits in 2026?

  24. Adam Pelavin

    Sounds like agglomeration (of amazing engineers etc.) could be a bigger factor than capital in creating a vibrant startup ecosystem. That’s kind of amazing…

    1. karen_e

      As Fred says, talent #1, capital #2, cheerleading (PR) #3, experience (senior hires) #4.

  25. John Fazzolari

    With Snapchat LA now has the most potential outside of the tier 1s to become an amazing ecosystem with a massive exit. There will be angels flying around venice beach funding entrepreneurs crazy ideas. Unfortunate that NYC hasn’t been able to find our own Snapchat yet…

  26. JaredMermey

    Are there metrics on valuations of companies at different stages across cities?

  27. Miguel Vacas

    I have to say, @fredwilson:disqus , it’s this type of humbling attitude that inspires me to come back to the Entrepreneurial ecosystem and motivates me to learn more and more from this type of philosophy. I really appreciate this post very much and for the insightful info regarding to the NVCA numbers.

  28. todd sawicki

    As a Seattle resident & CEO of one of Fred’s portfolio companies (tho not based in Seattle), I’ll defend @fredwilson:disqus here a bit. From a deal flow, the data shows Seattle lags all the markets he suggests from a fundraising standpoint. At the same point there are some big outside Seattle firms who have done well here – Benchmark, Foundry, and even A16Z. From an exit standpoint, the data also shows an incredible rate of success (probably only 2nd to the Bay area). Never in any conversation with me did Fred ever say/hint at any disrespect for Seattle – trust me – Fred knows it’s a great city for talent and startups.Interestingly enough, USV has a lot of Seattle ties in its portfolio – Jeff Lawson, CEO – Twilio, Jason Tan, CEO – Sift Science, & Fred Sadaghiani, CTO – Sift Science, in addition to myself, all either came from Seattle or, like me, life there now. So let’s focus on finding the right deal for USV and other non-Seattle VC’s to invest in Seattle instead of worrying about some offhand comment that was never intended to be a slight.And even better some of the best VCs in the world like Bill Gurley and Brad Feld – already are active in Seattle – heck I would argue that Brad has been one of the most active VCs in town over the last few years so Seattle doesn’t have much to worry about IMO.

  29. Nik Bonaddio

    I would bet that Pittsburgh is similar on the in/out performance scale, depending on whether or not you consider Lycos to be a product of CMU.I’m probably biased though.

  30. sigmaalgebra

    You don’t win games or make money just by swinging the bat. Instead, you have to get people on base and bring them home. But, as in Moneyball, it can help a LOT to have some good thinking involved! As in the movie, “Baseball HATES Bill James” and his Moneyball.Below is the money quote from the movie. The guy HENRY, apparently owner of the Boston Red Sox, was apparently John W. Henry. Of course, the guy BILLY is Billy Beane, General Manager of the Oakland A’s.HENRY: Due respect to the Coliseum, but this is a ballpark.BILLY: Yes, it is.HENRY: We’re gonna have some lunch in a little bit. Why don’t I have some coffee sent up?Denise?Thank you, Denise.BILLY: Thanks.HENRY: You’re welcome. You know, it’s her birthday and I need to get her a present, but she’s usually the one that does that for me. So do you have any ideas?BILLY: Scarf.HENRY: You mean like wool?BILLY: No, I meant what women wear with… You know, decorative.HENRY: Ah. And where would I get something like that?BILLY: No disrespect, I just lost in five for the second year in a row. Get her a bowling ball for all I care.HENRY: Right. Well, Steve told me he’s offering you a new contract.BILLY: Yes.HENRY: So why did you return my call?BILLY: Because it’s the Red Sox. Because I believe science might offer an answer to the Curse of the Bambino. Because I hear you hired Bill James.HENRY: Yup. You know, why someone took so long to hire that guy is beyond me.BILLY: Well, baseball hates him.HENRY: Well, baseball can hate him, you know. One of the great things about money is that it buys a lot of things, one of which is the luxury to disregard what baseball likes, doesn’t like, what baseball thinks, doesn’t think.BILLY: [CHUCKLES] Ah. Sounds nice. Well… I was grateful for the call.HENRY: You were grateful?BILLY: Yeah.HENRY: For 41 million, you built a play-off team. You lost Damon, Giambi, Isringhausen, Pena, and you won more games without them than you did with them. You won the exact same number of games that the Yankees won, but the Yankees spent 1.4 million per win and you paid 260,000.I know you’re taking it in the teeth out there, but the first guy through the wall, he always gets bloody. Always.This is threatening not just a way of doing business, but in their minds, it’s threatening the game. Really, what it’s threatening is their livelihood, their jobs. It’s threatening the way that they do things. Every time that happens, whether it’s a government, a way of doing business, whatever it is, the people who are holding the reins, they have their hands on the switch, they go batshit crazy.I mean, anybody who’s not tearing their team down right now and rebuilding it using your model, they’re dinosaurs. They’ll be sitting on their ass on the sofa in October watching the Boston Red Sox win the World Series.

  31. george

    Seattle might lead the way in corporate acquisition right downs as well (2015 Msft $7.5B Nokia + 2012 aQuantive $6.2B ); just saying…things have a way of averaging out

  32. Jeanne Yocum

    I notice that nowhere in your discussion of first, second and third tier communities do you mention the Research Triangle in NC, which took in $811.9 million in 2015. What’s up with that?

  33. creative group

    Phoenix is special..The old Warehouse district is becoming to take shape in housing Tech companies witha like minded group of people. Exciting to view it in its infancy. Similar to what Denver’s LoDo, San Francisco’s SoMa and in Seattle, Portland and Austin. Maybe Phoenix can get on the radar.

  34. Rick Bullotta

    Fred, what about Philadelphia? According to your list, Philly should be in the top 10, and near the middle of the list.

  35. Dave Chase (@chasedave)

    Adding a bit to Tren’s well-made points that are non-obvious but relevant to a thriving startup/tech ecosystem:1. Seattle has been an engineering-heavy city for a long-time with Boeing, in particular, drawing in tons of engineering talent/mindset (lots of sons/daughters of Boeing engineers in MSFT/Amazon/startup ranks)2. Growing offshoot of that with space efforts from Bezos, Diamandis, et al3. It’s been, arguably, the biggest hub for wireless industry (McCaw becoming AT&T Wireless, T-Mobile, Western Wireless…even Teledesic)4. With Nintendo & Xbox based in Seattle area, that’s also a big sector5. Respectable segments in biotech, medical devices and a bit in HealthIT6. Virtually every Bay Area giant (goog, tw, fb, sfdc…) has an engineering outpost tapping a deep pool of talent7. In the “software’s eating the world” category, companies such as Starbucks are pretty sophisticated in their adoption of next gen tech

  36. SemaphoreSlim

    BTW – CSci isn’t everything. UW Med School consistently ranked in the top 10 for the last 5 years or so, 2015 saw #1 rating for GP/Primary Care. #11 worldwide, overall according to Reuters.Says the dude with the BS in ChemE. 🙂

  37. KyleKesterson

    Great points made on sizable outcomes. Now the real question, with all these great outcomes, where the hell are all the angels?!

  38. lunarmobiscuit

    Thanks for the update Fred. Seattle is an oft-forgotten city, up in the corner closer to Vancouver, Canada than any bigger U.S city, in culture as well as location. As such, you don’t hear from Microsoft or Amazon or Starbucks or even Boeing that they hail from Seattle. Weyerhaeuser, Nordstrom, T-Mobile, etc. the same.The talent flows in from the rest of the country. The money flows in from California, Boulder (thx Brad) and elsewhere.Beyond a better press agent, all we’re missing is the Valley ideal of recycling wealth into startups. The ethos as seen by Gates is to instead set up foundations and be philanthropists, which unfortunately is virtuous, but isn’t a virtuous cycle.

  39. LE

    Tech is the shiny ball (for now) and the only reason young people care about it at all (and startups) is that they see it as a shortcut to success. Plus it has some fun toys that everyone plays with. They think it’s an easy way to cut ahead of the line of biding your time and hard work. Everyone wants to do it nobody wants to put in the hard work. Just like the entertainment business (and acting) and actually just like sports. “If I only tried harder, I would also have a great golf game”.Oh yeah, and one of my other buddies beat the shit out of Tiger one week in a major, but who cares it’s not tech right? Yup, proud to know that guy, he not some tool from Stanford. And yes he would never get an MBA.As far as “tool” and Stanford not sure why you would say that. While it is possible to get into a great school by the back door most of the students there are of an extremely high caliber regardless of what advantages they might have from their family (not talking about legacies or rich kids). They are high capacity machines in the same way that Bernie, Hillary and Donald are. They can produce a mass quantity of work at a high level in competition with others who are equally motivated. And keep on ticking. It’s not that people attending other schools can’t have those qualities many of them do. But as a quick filter you can’t beat that, it’s like trying to think that a Navy seal is not special in some way. To make it to a certain point you have to have something special going on.I am not sure I understand the complaint here. My wife doesn’t care about startups, Mark Andressen, or your friend who is good at sports. Neither do my neighbors. The only people who care about startups are people who for some reason read and care about them. Other people don’t. They are not losing any sleep over it anymore than you are losing sleep over who is publishing in medical research journals.

  40. LE

    How is that dynamic with your wife? When you talk about tech stuff what happens?She wants to have sex.

  41. Alex Murphy

    That is worth writing a blog post about