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Nashville, Memphis may have edge over Silicon Valley
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Sarah Lacy

Sarah Lacy, the Tennessean who is a senior editor at TechCrunch in San Francisco, says Nashville and Memphis may have an edge over Silicon Valley in nourishing some tech entrepreneurs.

As evidence, Memphis-born Lacy cites the extraordinary success of Groupon, the social media-driven couponing phenomenon.

Being based in the virtual "black box" that is Chicago, rather than in the Valley, allowed Groupon to avoid the "glare" of Silicon Valley news media and pervasive professional networks that make it difficult for entrepreneurs to operate in stealth mode when they need to, Lacy explained.

Lacy stressed that 90 percent or more of entrepreneurs who set out to create a "huge" company should take up residence in the Valley. However, she said, perhaps 5 to 10 percent of startups can take a lesson from Groupon, which she perceives as having demonstrated how to use "the inverse of all the things the Valley usually offers to their advantage."

From its Illinois headquarters, she explained, Groupon has competed for Silicon Valley talent without "playing the Silicon Valley game" to win acceptance, she said. Groupon has essentially focused on opportunities or problems "that the Valley machine is not solving," Lacy added. Silicon Valley may be hampered in spotting such opportunities by the fact that its innovation ecosystem is so robust and crowded that professionals there have been relatively insulated from the socioeconomic trends that have more deeply affected most other U.S. communities, she added.

Moreover, Groupon's focus on enlisting small businesses -- the majority of which do not have websites -- and achieving broad adoption among average Americans, rather than targeting "early adopters" of personal technologies, is not common among Silicon Valley startups, which more often target "alpha users," Lacy said.

Silicon Valley is the perfect homebase for many companies, but other cities don't need to strain to emulate Silicon Valley or seek the Valley's "approval," she said.

The Groupon story should be "inspirational" for Nashville, Memphis and similar cities, she continued, noting that "in some ways [Groupon's] a company that couldn't have come out of Silicon Valley."

Lacy, 35, reports on technology and entrepreneurship for TechCrunch and is host for TechCrunchTV, including its "Why is this News?" segment. Lacy is also a reporter for "Press Here," a tech program airing Sundays on San Francisco's NBC station.

She has two books among her credentials: Debuting this month is Brilliant, Crazy, Cocky: How the Top 1% of Entrepreneurs Profit from Global Chaos (John Wiley). Earlier, she penned Once You're Lucky, Twice You're Good - The Rebirth of Silicon Valley and the Rise of Web 2.0 (Penguin). Prior to TechCrunch, Lacy was a columnist for BusinessWeek and a reporter for the San Jose Business Journal and the Memphis Business Journal.

Lacy said she intends to focus more effort in coming years on entrepreneurship in emerging nations. "You don't want to spend ten years just writing about Facebook and Twitter," she noted.

Such cities as Memphis and Nashville should leverage their natural advantages, rather than preening for the Valley, she said. A booster of her Memphis hometown, Lacy noted with a rival's humor that she and a British friend once evaluated Memphis and Nashville by spending a few days in each, and concluding that Memphis "killed" Nashville. While it might be argued Memphis is "messier" and "more chaotic," she said, Memphis is also more "soulful." [Okay, the emails are arriving. If you have spirited, but preferably friendly comments, please post them here.]

Lacy spoke with VNC following her recent holiday stay with family in Memphis. She earned a bachelor's in English at Rhodes College (1999), in Memphis. VNC

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Tags: Creatives, economic development, entrepreneurs, Groupon, innovation, Sarah Lacy, Silicon Valley, social media, startups, talent, TechCrunch, technology, Web 2.0, workforce

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