Why Chance Encounters Work

Editor’s Note: Nathan Bashaw is a designer and front-end developer at Olark – a startup that offers live chat to websites. Previously, Bashaw worked on the campaign for Michigan Governor Rick Snyder, and is a graduate of Michigan State University. You can follow Nathan on Twitter Here.

Photo Courtesy: Flickr (:mrMark:)

A couple weeks ago, Paul Graham posted an essay called “Why Startup Hubs Work”. It explains the disproportionate number of successful startups in the valley as being the result of 1) it being cool to start a startup there, and 2) the frequency of chance encounters with people who can be useful to you.

If startups aren’t cool in Michigan, I didn’t notice while I lived there. At least in my circle of friends, it was the coolest thing you could do. But most of us failed because we didn’t know anyone who had done it before that could mentor us, invest in us, or co-found the companies with us. A lot of those problems are less severe now, but they’re still bad enough to kill many little startup embryos in Michigan.

When I moved to Palo Alto, everything changed.

Just living there, being a moderately social person, and working for a reasonably (soon to be wildly) successful YC startup has led to massively valuable connections and growth experiences [1]. 

I believe in brutal honesty, so I’m not going to sugarcoat this: you’re making it hard for yourself if you start your startup in Michigan, [2] But with that said, you’re an entrepreneur… you don’t do things because they’re easy. The key is to know why you want to start a startup here. If it’s mere convenience, then I think you’re doing it for the wrong reasons (and you’ll eventually leave or fail).

So how do you solve the people problem? I don’t know the answer to that, but I think it might help to start out by reverse-engineering the way chance encounters work. Then maybe someone can hack it.

 Here’s the template for pretty much every encounter I’ve had since living out here: I go out with some friends, meet cool people, keep in touch via twitter, maybe grab coffee one-on-one, then go out with your new friends to places where you meet more random people, and the cycle repeats itself (until you get old and boring, lol). By that time, you’ve got a big network of friends doing awesome things in the same general space as you, and they are incredibly valuable.

 You might think that just socializing isn’t really important, so I’ll name a couple of the most immediately obvious ways that having a good network pays off: hiring, raising money, finding co-founders, partnering with other companies, getting the word out about your startup, and just generally leveraging other people’s wisdom or domain knowledge to solve problems you’re facing.

The problem with Michigan is that you don’t randomly meet people that can help you when you’re out. Since they don’t live here, you have to meet them on the internet. This happens to be terrible way to meet people [2]. I did this a lot myself when I lived in Michigan, so let me explain why it put me in a bad position and none of those “relationships” really paid off.

 I found people via twitter or their blog, and tried to email them, making up reasons why I was contacting them. But to be honest, I did it because I thought they were smart and looked like good people to know. But for one reason or another I didn’t ever actually get to know them. In fact, I rarely even got a thoughtful response. This is because when you cold email people it’s really hard to not come off as a desperate internet person (we all know the type). When you randomly meet someone at a bar, people respect you more. You’re not a fan, you’re a friend.

So how can people in Michigan reap the benefit of chance encounters? I can think of a couple ways: try to hack some social mechanic on the internet to make chance encounters possible (I’ve seen this happen in turntable.fm rooms in the early days, but I don’t think it happens anymore), make friends with people who live in Silicon Valley and come visit them once a quarter, or try to make it more likely to have chance encounters for real in Michigan. 

The third option is the most interesting – I think the other two are short term hacks. Once the third is possible is when you can start to really grow a true startup community. So how do we make that happen?

Ann Arbor’s Tech Brewery. Credit: Dug Song

People interested in startups in Michigan are all over the state. Cities with at least a few notable people I can think of include Grand Rapids, Kalamazoo, Midland, East Lansing, Ann Arbor, Royal Oak, Birmingham, and Detroit. If you’re all spread out, how are you going to randomly meet each other at bars? You’re not. And it’s going to be inconvenient to hang out often and just build cool stuff together. Maybe more startups would form and get traction in Michigan if everyone just moved to Ann Arbor. I don’t want to start a flame war, but I think over the next two years we’ll see them start to pull ahead of the pack.

But the root problem is that the total number of people who are trying to start startups in Michigan is pretty low. A reasonably social founder will exhaust the supply of useful people to meet rather quickly. The value of a startup hub is the number of people in it times their usefulness to you. 

Maybe the best way to bootstrap our startup startup hub (not a typo) would be to somehow convince a couple successful founders to relocate here for their next venture. The value of the network would skyrocket. They’d hire some local people, and hopefully convince others to relocate. Their team would get a lot of great experience and hopefully spin off their own startups in time. We basically have all of this in Dug Song, but he’s just one guy. Imagine if we had 10. I think that might tip the scales. The hard part is figuring out who you might be able to convince, and making it happen.

For now, the best we can do is to help each other as much as we can. I’d love to talk to anyone who’s interested. Shoot me a comment here and share your thoughts.

[1] I thought about name-dropping here to illustrate my point, but I decided it wouldn’t be tasteful. My goal isn’t to make myself seem cool – I’m not. Trust me, I’m painfully aware of the fact that I’m still a nobody. But I’m just one warm intro away from people who are not, and I’m waiting until the time is right to cash that check.
[2] Unless you’re Alex Schiff or Bryce Colquitt. Those are the only two dudes who I’ve seen really master that game. It’s an art form and they can tell you far more about it than I could. I never could make it work like they could.
  • http://twitter.com/KenWohl Ken Wohl

    A third point to add to your third paragraph (“…the disproportionate number of successful startups in the valley…”) is how failure is perceived in Michigan vs. the valley. When a startup doesn’t have a successful exit in the valley, people ask, “What next?”. Failing in the valley is perceived as acceptable and as a learning tool in the valley. It’s part of the culture and mental make up. It’s not “what did you lose?”, it’s “what did you learn?”.

    In Michigan, failure is a bad thing. People are scared to fail. When they do, others look down upon them. This makes it a lot less sexy to start something knowing that the surrounding environment is sitting there waiting to jump on you when you make any ounce of mistake.

    Within our startup circles it’s not like that (ie. GrowDetroit, H&H, etc.) but the vast majority of Michigan still is. 

    Name one entrepreneur that you consider successful that didn’t fail at a prior venture. It’s pretty damn hard…maybe impossible.

  • http://twitter.com/EriBzo e.bzo

    Let me know when your back in town. we can discuss startups @Gusoline Alley…again!

  • http://twitter.com/kscottz kscottz

    Perhaps we should think about hosting a “cultural” exchange programs between Michigan, and Boston/New York/The Valley. I worked in Ann Arbor for ten years and I currently work for a startup based there. I currently reside in New York where I am working towards completing my masters degree. In the course of the past year I have met so many wonderful engineers and entrepreneurs and I think in some ways being here has really accelerated my understanding on the entire startup process. That said, I am loyal to Michigan and I really want to return at some point in the not too distant future. In my time here I have also developed a profound sense of what I think Michigan does better than New York, and how to capitalize on that. It woud be great if we could provide a way for startups to crash in these startup hotspots for a few weeks to get the same experience. These early stage startups could network and see what is happening culturally in the big cities and then export what they have learned back to Michigan. 

    So, any Michigan startups want to crash on my futon? 

    • http://www.growdetroit.com Alex Southern

      Exported to Michigan? I love it k. 

      It’s definitely an invaluable thing to be able to spend time in a “Entrepreneurial hotbed” of activity. I have friends who have moved back (recently) to the area from cities like Boston, and SF, and see that something powerful is going on here. We’re very, very, very early on in the development of what could be called a startup ecosystem, but it’s definitely tangible and I think more folks bringing expertise back into the area is BADLY needed. 

      -Alex 

    • http://twitter.com/EriBzo e.bzo

      come. back. now.

  • http://twitter.com/EriBzo e.bzo

    Huge believer in failing forward. success is the best revenge 

  • raznick

    Nathan, I don’t usually make it through pieces more than 150 words today, this was a great one and so many great points were raised.

    Many do seek advice for me on how to network and how I grew my network, but like you mentioned, being in Michigan makes it that much harder. 

    In one day in NYC, I can go to 7 meetings with notable people, however, in Michigan, it’s likely our emails and fup as you mentioned Alex also do does well. 

    Persistence helps, if you feel rejected because someone doesn’t respond to your first 2 emails, then networking will always be very hard for the person trying to establish his or her network.

  • http://www.stormpulse.com Matthew Wensing

    Personally, I think we need to focus on making better founders out of the entrepreneurs we have on hand rather than importing talent or telling people to all move to a certain place.  My latest thoughts on this (just published this week): http://wensing.tumblr.com/post/18392646677/what-they-cant-tell-you-starting-up-outside-a-hub

    • http://www.growdetroit.com Alex Southern

      Enjoyed this quote: 

      “Why does having a company succeed in a huge way beget more successful companies?  Is it just that success breeds success?  No.  It’s just a way to transfer money and power into the hands of hackers, who can then invest in the next generation of people (not ideas), think the ways hackers do, and share it downstream (“pay it forward”).  It’s a shortcut to a revolution.”

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