My friend Matt is often right. For example, he was right when he bet Arsenal would beat Juventus in the Champions League, which forced me to start this blog. However, sometimes he is actually wrong. For example, when he told me Arsenal was going to go all the way and win the Champions League that year, which will probably never happen in the future as well.
Last week he wrote a post questioning my suggestion to Manel (CEO of OpenBravo, an open source ERP) to move the headquarter from Spain to Silicon Valley.
My suggestion: "move the headquarter because you can find funding, partners and the exit for the company here (see who got bought recently: Zimbra, MySQL, Trolltech, Xensource. Where was their headquarter?)."
Matt's suggestion: "don't do it. You won't find customers in Silicon Valley".
Now, let me question the basis of his statement: why should you have your headquarter where your customers are?? If you are an open source company (I know one fairly well...), you have customers everywhere on the planet. The first Funambol customers, when we were headquartered in Italy, were in Asia, then in the US. What should I have done? Move the headquarter in every corner of the planet?
Nope, you put the headquarter where it helps the company more. You put sales offices close to the customers, as many as you can (and if you are open source, you will probably end up with three: one in the US, one in Europe and one in Asia). Note: I would never put development here. Or a large inside sales team. Just the headquarter, with the CEO and the management team. My team in Silicon Valley represents 20% of the company employees (and yes, it is expensive, but it is worth every penny).
What does an open source company need from its headquarter? To get funding (check), to find partners (check), to deliver an exit (check). It might be cynical, but running a company is about delivering results and being cynical on making the right choices ;-)
Where's the best place on the planet to get all three? It is Silicon Valley. Sorry. No other place gets close.
Utah? Zero funding, zero partners, zero exit. Good for a sales office, maybe, if you have customers there (in Utah?). Or if you like skiing. If I wanted to ski, I could have lived in my home valley in the Alps. No customers or funding there, but a great life. I will go back one day...
London? The closest thing to Silicon Valley. Less funding, a lot less partners, but decent exits (especially on AIM). Boston? Just below London, in my opinion. Both valid options, do not get me wrong, but why settle for something less? Just because there is a lot of traffic on 101?? Being a CEO is about getting things done for your employees, customers and shareholders (in this order). And the Valley can also be a lot of fun, and it is just a quick flight to Utah. I do not consider living here a sacrifice...
Bottom line: I do not believe the story around customers, not for an open source company. Put your headquarter where it helps the company most. Customer will be elsewhere, always not where you live.
Manel, trust me, take a flight and stay here for a few months. I need your suggestions for the best restaurants in San Francisco. Your tips in Barcelona were awesome :-)