Should companies should be founded wherever the financial and legal friction is lowest or are there other important factors? What about the social responsibility a company has towards the community, city and even country that that company was created in?
I think there are a number of factors to consider here which will be specific to each individual context but just pointing out that the answer is only obvious if you've already decided what the important considerations are. VCs will always have a bias towards ruthless efficency but founders need to be more thoughtful. Not every decision is about the bottom line.
Astounding strategic play from YC here. Start up School has become popular enough to be viable as a social network. Imagine a VC having a live and data rich directory of most investment hungry early stage tech startups where that startup has shared its progress from the earliest stages of its development. What an incredible advantage that is as a VC firm. Even though I love YC, I find that idea quite worrying.
I've been through SUS and I really valued it. It's great content and some of the discussions were really valuable. I think it's fair to say, though, that the content is very opinionated. I understand why - it's trying to prepare people to apply to YC and YC have a particular way of doing things. I think that's fine. My worry is that the reach of YC on the broader tech start-up culture is so broad now (and getting broader) that these opinions and ideas become broadly accepted norms. When that happens, people stop recognising the fact that there could be a choice to make and we loose the diversity and richness of other opinions and ideas.
Here's an example: everyone knows that the only place to incorporate a company is in the state of Delaware. Creating something in your local region is out of the question, not because you've reasoned well about the pros and cons but because the culture has a generally accepted answer.
I think if we don't have diverse views and perspectives on what's possible and what kind of companies we should be creating, we'll end up with more of the same. That's a winning formula for YC but a bad one for culture as a whole.
We don't need one VC that dominates the early stage market. We need competition to keep the ecosystem healthy. Maybe what we really need is the other VCs, bootstrappers, open-source foundations and NGOs to get into the startup education/social network business too.
I think there are a number of factors to consider here which will be specific to each individual context but just pointing out that the answer is only obvious if you've already decided what the important considerations are. VCs will always have a bias towards ruthless efficency but founders need to be more thoughtful. Not every decision is about the bottom line.