J.D. Vance at TechCrunch Disrupt: Startups Don’t Have To Be in Silicon Valley

Estimated reading time: 2 minute(s)

Last week, on the main stage at TechCrunch Disrupt San Francisco, J.D. Vance, managing partner of Rise of the Rest explained that the $150m fund doesn’t seek to take a specifically “anti Silicon Valley” stance, “But we do try to highlight the fact that there are also really cool things going on outside of Silicon Valley.”

Non-Consumer Facing Software Companies Don’t Need to be in The Valley

Vance maintains that Silicon Valley is still the right choice for certain types of startups, such as global consumer facing software companies. However, it’s no longer true that Silicon Valley is the only place a new company can succeed.

Check out the full interview video here. Skip to the 2 minute mark for this specific discussion.

EQ attended TechCrunch Disrupt 2018 in San Francisco to hear J.D. Vance from Rise of the Rest discuss the thesis behind a new venture capital fund targeting America’s heartland.

Proximity to Customers Is Critical to Innovation

Startups focused on disrupting major incumbent industries such as healthcare, logistics and agriculture stand to do better locating themselves closer to their customer base, he says.

“Part of what’s driving the growth of some of these areas and some of these sectors, is that if you want to build a consumer facing internet company, Silicon Valley is obviously a great place to do it — highly networked… But if you want to build a biotech company, if you want to build a healthcare company, if you want to build a transportation or logistics company, it helps to be close to the sectors; and to the companies that can be potential customers, become potential supporters, be potential mentors.”

The Third Wave

Citing a concept from Steve Case’s book, The Third Wave, Vance says that the next generation of tech companies will be located closer to their customer base. Both predict that the next big tech innovation challenges are in America’s heartland.

“One of the things that’s driving what we expect will be a pretty significant migration of risk capital away from the coast and towards the middle of the country, is the fact that in the next wave of innovation — as Steve would put it — you’re going to see a lot of these harder tech companies, and you’re going to need to be close to some of the customers that are operating those spaces.”