Stockholm has become one of Europe’s hottest startup hubs, producing fast-growing AI companies like Lovable, Legora, and Sana Labs.
Yet, Paul Graham says ambitious founders should still go to Silicon Valley.
“Should I go there?” the Y Combinator cofounder asked during a speech to founders in Sweden last month that was released on video on Wednesday. “Yes, you should. You can go there for a bit and then come back, but you should at least go.”
Graham’s message landed at a moment when Stockholm’s startup ecosystem is attracting increasing attention from investors and founders. According to global data intelligence platform Dealroom, the Swedish capital was home to more than 1,800 startups as of 2025, with a combined enterprise value of $236 billion.
Still, Graham said Silicon Valley remains uniquely valuable because of its concentration of founders, investors, and engineers.
He compared Silicon Valley to historic centers of excellence like Paris in the 1870s for painting and Hollywood in the 1950s for movies, saying ambitious people throughout history have tended to relocate to wherever the best talent is clustered.
“What exactly do you get when you move to the big center?” Graham said. “You get the best peers.”
‘Investors in Silicon Valley decide a lot faster’
Graham said Silicon Valley also benefits from something many startup ecosystems struggle to replicate: the density of serendipitous meetings between ambitious people.
“There’s nothing in the world that’s better than serendipitous meetings with people who are working on the same stuff,” Graham said.
He also said Silicon Valley operates at a much faster pace than most European startup ecosystems.
“Investors in Silicon Valley decide a lot faster,” Graham said, adding that fierce competition forces venture capitalists to move quickly on promising startups.
He pointed to Dropbox as an example, recalling how a Boston venture capital firm spent months offering the startup advice without investing before rushing to send founder Drew Houston a term sheet with a blank valuation after Sequoia Capital became interested.
Graham also suggested the biggest advantage of spending time in Silicon Valley is psychological.
“You go there and you see these people and you think, ‘Okay, I could do that,'” Graham said. “I could be like that guy if I worked as hard.”
‘The Silicon Valley of Europe’
Even so, Graham did not dismiss Stockholm’s potential entirely.
He said founders who return home after spending time in Silicon Valley can strengthen local startup ecosystems by bringing back capital, networks, and startup culture.
Graham added that Stockholm could eventually become “the Silicon Valley of Europe” if enough founders return with that experience.
“That job is still up for grabs,” Graham said. “All you need is a place founders want to live and a critical mass of them.”
Some Swedish entrepreneurs are already moving back after careers abroad.
Patrik Torstensson, a former Meta engineering director, recently joined Lovable in Stockholm after more than a decade in Silicon Valley and London. He told Business Insider last month that he ultimately wanted to “give back to Europe and Sweden.”
Lovable CEO Anton Osika has also said that Sweden’s long-term thinking and tightly knit work culture are helping lure talent back from Silicon Valley and London.
