Global Maximum Versus Local Maximum: Understand What Level You Are Truly Competing At

I have the great fortune of being able to invest in amazing startup founders from everywhere in the world. And I truly believe the greatest companies can be started from anywhere and everywhere. BUT starting a company in a location is very different from growing and scaling one.

I run into founders all over Europe, Asia, Canada, Middle East or wherever, who are examples of the hometown hero. They literally brag about being ranked or acknowledged as the “top 5 startup in some random city” usually not known for technology. It’s the startup version of the “High school hero” syndrome for startups. You might be top dog in your locality but you are literally NOTHING at global level. You have NO idea what the competitive landscape really is and how high the standard really is. It’s like being the top University pick for whatever sport and then getting drafted into the professional leagues where you realize painfully despite your gifts that are average or most likely below average.

Whatever you think about the San Francisco Bay Area, yes, it’s a bubble. Yes it’s full of arrogant tech bros who are clueless to how the world works. Yes, it’s full of douchebaggery and is probably the worst run city (SF that is) in one of the worst run states of America. BUT it is also full of the brightest, most experienced and accomplished startup founders and investors in the world. STILL. And this environment is the true test. The best startups are still being built and molded here (for now). You are still surrounded by the most ambitious people who self select by coming here and competing here. This is the global standard.

Just like if you want to be the best I-banker & hedge fund guy/gal, you go to New York City. Or you want to be tops in media and Hollywood, Los Angeles is your place. Or Milan/Paris for Fashion. You go where the best are. Clusters and critical mass still matters. It matters because you are exposed to and can benchmark what is truly global excellence. In your own home territory, you literally do not know what you do not know. So keep some humility and try to get exposure to as much of the best that you can.

Delusion is dangerous. Hubris from ignorance is even worse. Hubris is defined as excessive pride or arrogance. Also tempting the gods to plot your downfall because of your excessive conceit. Open your eyes. Be self aware & acknowledge your true competition. Know where you truly stand. This is the first step and the only way you truly know what it takes to win in the end.