Why You Should Launch Your Startup Outside of Silicon Valley

Ashley Brodfuehrer
Feb 9, 2016 · 2 min read

If you’re thinking about launching a startup, the first place that likely pops into mind is Silicon Valley: the magical land with prancing unicorns and a pot of gold, where your tech dreams come true. It’s easy to be captivated by this hub and reason why cities around the world are piggybacking on the allure of the ‘silicon-factor’ — Silicon Beach (LA), Silicon Alley (NYC), Silicon Docks (Dublin) — with notion that startup success is synonymous with that magical place in the San Francisco Bay area. If your startup is in the beginning phases however, greater probability for success may be outside the Valley.

Here are three key reasons you should look to launch outside of Silicon Valley:

  1. Cost of Living. Living expenses take a serious toll on cash flow and real estate cost in the Valley has been rapidly increasing, with housing cost 148% higher than national average, while San Francisco Bay area holds title for the most expensive rate in the world for a furnished studio. Save on cost of living to conserve more capital for your venture.
  2. Battle for Talent. Hiring and retaining top talent in this part of the world is no easy feat, competition is fierce. Engineers demand a hefty paycheck, and in Silicon Valley, you’re competing with salary packages and office perks from the big guys: Google, Facebook, Apple; and startups like Weeby, who pay its engineers up to $250,000 / year plus equity. Plenty of talent exists outside the Valley, for a fraction of the cost.
  3. Capital Efficiency. The cost of doing business and paying a team of engineers to constantly iterate and improve a tech product is expensive. Overhead costs can be much more efficient when operating outside of the San Francisco Bay area.

Takeaway: for startups, Silicon Valley has the greatest acquisition budget in the world, making it a top place to end, but that doesn’t mean it’s the best place to begin. A great company can start anywhere and the advantages realized by launching outside the valley may prove key to success.

Written by

Marketer, Strategist, Brand Builder, Startup Advocate

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