In light of this thread, it's interesting that he makes the point that SV is successful in part because it's not a very good place to live if you're not rich:

http://news.ycombinator.com/item?id=116410

I think this article is entirely wrong. Trying to create another silicon valley is a bad idea full stop. The way to compete as a startup or a tech company is to utilize whatever natural advantages your ___location has. Be prepared to communicate remotely with other entities that are far away. I actually believe in the internet as a communication medium - that business can be effectively conducted outside of meatspace.

Also startups outside of SV will have to start actively discriminating against companies in SV in the same way that some companies from SV do to them. Apart from the collective benefits for non-SV'ers, I believe there is a good individual reason for doing this - information sharing.

Part of SV's advantage must be the 'informal flow of information' that can occur over a few beers. I'm sure a lot of things that one would be hesitant to permanently record are communicated. So it seems more likely that information shared with a SV company is more likely to find its way to competitor than with a non-SV company. Additionally the movement of employees between companies is another means for this 'information sharing' to occur.

Please don't get me wrong. I don't have anything against SV or companies in it. There very well may be a disadvantage for no-SV companies. But compared to the operational and cost disadvantages of moving to SV these are small. Or to put it another way -'We must fight where we stand. We have no other choice'.

The point about NYC is spot-on (it's also one of the reasons I've been thinking about making the move to SV myself).

"If I had a choice between funding someone from a family who moved here from Vietnam whose father and mother run a 7-Eleven versus a descendant of a Mayflower passenger with “IV” in his name, I’ll give you half a guess as to my preference."

Racist bullshit.

Is he forgetting that Bill Gates has a III at the end of his name?

He's looking at statistics over large numbers, not a a single data point. Besides, it's his funding strategy, and if it isn't a good predictor of success, he'll pay for it.