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Rethinking founding a startup in Edinburgh

The other day, I had a check in with a friend who's raising money in Edinburgh, Scotland. I lived there for about a decade, and I miss the friends I made there, as well as its anarchic, artistic spirit. Also, sometimes I torture myself by looking at the cost of rent there, which is sometimes an eighth to a fifth of the equivalent cost in San Francisco.

I strongly suspect that one day I'll make it back there, for its quality of life, for the friends I already have there, and because it's probably the most progressive place I've ever lived.

A senior engineer's salary there is often the equivalent of $60,000-80,000. For that, they can live a great life. It's also at least $100,000 less than a senior engineer's salary in San Francisco, who will have a roughly equivalent quality of life. For a startup, those costs add up quickly: if you're raising money to give yourself 18 months of runway, you need to ask for a significantly lower amount. The irony is that this lower amount might not fit into the financial plan of an institutional investor, which has made assumptions about check size and value growth that are rooted in the Bay Area. But angel investors have different assumptions and can be more agile.

This lower cost environment, together with fewer preconceptions for what the tech industry should look like, also allows for different business models. I keep seeing articles about "how to make money from open source", and my reaction is always the same: there is no way this will make enough money to live in Silicon Valley. And I do believe that to make it work here, you have to be independently wealthy or raise venture capital dollars. But, of course, there are many other places in the world, and it's getting easier all the time to build something elsewhere.

The trick is to avoid the consultant-thinkers: the people with PowerPoints filled with bullet points who have learned everything they know from business books. (Which is to say: they have very little real-world experience and are cargo culting innovation.) The further I get from Silicon Valley, the more of them I seem to encounter. Similarly, you need to avoid the cynics who tell you that you should give up and just get a real job - something I had a hard time with when I founded a statup in Edinburgh in 2004.

But that attitude has changed, and more resources are available to global founders. It's still true that San Francisco has the greatest concentration of people who know what they're doing in this space - but that's a blessing and a curse. Being more decoupled to VC peer pressure and narrowing ideas of "best practices" might be a good thing. If you can think scrappily, build the culture and business model that works for you from first principles using a human-centered approach, and don't mind the driving, horizontal rain, I'm beginning to think that places like Scotland are now a great place to start. There's no need to spend outrageous sums to found a company - and there are places where your runway can be significantly longer for the same amount of money and you can live a better life on a lower income.