Paul Graham has been holding in his head two ideas that would explode if combined — metaphorically:
The first is that startups may represent a new economic phase, on the scale of the Industrial Revolution. I’m not sure of this, but there seems a decent chance it’s true. People are dramatically more productive as founders or early employees of startups — imagine how much less Larry and Sergey would have achieved if they’d gone to work for a big company — and that scale of improvement can change social customs.
The second idea is that startups are a type of business that flourishes in certain places that specialize in it — that Silicon Valley specializes in startups in the same way Los Angeles specializes in movies, or New York in finance.
What if both are true? What if startups are both a new economic phase and also a type of business that only flourishes in certain centers?