Startup Success: 5 Questions to Help You Decide on a Location
Is Silicon Valley your only option?
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Silicon Valley has earned the hearts and minds of the startup inclined. Home of Google, Facebook and hundreds of other startups that have made Billions… it’s no wonder world-class talent is drawn to Silicon Valley in swarms. With all this talent, Silicon Valley naturally breeds communities ripe with potential customers predisposed to try and buy new innovations. The buzz and press abound as do mentors, serendipitous opportunities and investors ready to cash in. Painted this way, it makes one wonder… can you even hope to grow your startup into a successful company anyplace else?
Yes you can.
1. It’s the age old question of: is it better to be a small fish in a big pond, or the big fish in the small pond? I bet you will change your answer to this question at different points in your startup’s growth — and that’s okay. History shows that major startups from tech companies to household names started in towns that you might not have ever expected, but these companies also strategically span into new locations depending on their needs. Take a look at:
Right here in my home base of Portsmouth NH we have a growing community of techies and marketers serving companies internationally. For all of its 16.8 square miles and roughly 21,000 people, Portsmouth serves about a third of the nation’s population.* Portsmouth Naval Shipyard, which repairs nuclear submarines, is a key customer of engineering, manufacturers and other vendors. Lonza Biologics, Liberty Mutual, Bottomline Technologies are just a few of the 150+ major companies, spanning multiple industries that have a presence here. Yet you almost wouldn't notice them next to the quaintness of our Market Square. We are a small pond compared to Silicon Valley.
2. How competitive are you prepared to get? If you are a startup, you are the underdog anywhere you are. If you live in a big pond… be prepared to fight extra hard for talent next to hot and hungry behemoths willing to dole out high salaries to work on nearly guaranteed-to-be-successful projects. Oh and to add insult to injury, your cost of living will likely be one of the highest in the country. As a result you will probably need investment — and quickly.
In Portsmouth, NH we have those behemoth companies, but most of them move slowly. So if you are a hungry innovative engineer, developer, designer, marketer etc. you’ll likely be looking for a young startup to make your mark. Our cost of living is 8% less than Boston but if you really want to extend your runway take a look at our neighboring towns like Dover NH and Greenland NH.
PS. NH has no income tax or sales tax. Unlike ME, MA, CT, RI, VT, NY, NJ, PA and the rest of the East, NH is the most business friendly state in the entire Northeast.
3. How connected can you get? What makes companies succeed? At the root of it: they obtain the right resources at the right time for them. You can too. No matter where you live you have unprecedented access to the people and opportunities you need to succeed.
The world has become smaller, more global. In fact, as of 2012, estimates suggest that over fifty million U.S. workers (about 40% of the working population) could work from home at least part of the time. * Another words, the need for a physical office is close to extinction. Web startups like Yammer, Canvs, PBWorks and Sqwiggle bring the office water cooler to the cloud and everyday new services for remote work, automation and distributed workforces are catching traction.
I bet your thinking, “Yes, but companies are built on all sorts of human relationships between not only employees but customers, suppliers, mentors and investors — don’t startup founders need to be able to meet with people in-person to develop the trust necessary to build these relationships?”
Yes and no. One day we might have technologies and cultural shifts that help us develop and maintain trust 100% remotely. The reality is that today we aren't there yet. What that means is that you may need to plan out how you will establish trust and maintain it in greater detail if you are physically farther from these groups of people. Your plan might include services like: Linkedin, iCoFounder and EventNav to help you locate the right people, make introductions, start a dialog and set up meetings where you can further strengthen your relationships.
In Portsmouth NH we have four major co-working and event spaces focused on serving the needs of startups. If you want to really make an impact, you can tap into hundreds of events and spaces within an hour’s drive.
4. Who is your number #1 priority? Business is business and at the end of the day what do investors and Board of Director’s care about? Money. So unless you are selling to investors, you should be focused on surrounding yourself with your key customers and investors will follow. Psst. If you focus on this you might not even need investors!
If you haven’t validated a repeatable business model yet, which means you don’t know who your key customer is, you should surround yourself with a diverse set of potential customers.
By surround, I mean immerse yourself with them. Watch them, hang out with them and know all the pains they have better than they do. Yep that can be done remotely too using services like: Usertesting, Silverback, facebook, twitter etc. but you must mix in on-site-in-person time. The more in-person observations you can make the better.
Portsmouth NH is a destination town. We expand to more than three times our population during tourist season and have more restaurant seating then our whole population of over 21,000. Of the people who call Portsmouth home, we tend to have high education levels, are employed and hold senior level positions. Our population is aging, averaging 41 years old but we work to attract the best and brightest young talent. Our relatively small town has three live theater companies and boasts a trifecta of Ocean, lakes and mountains at our doorstep. We're also home to a diverse set of industries well-rounded from young to well established companies.
5. How mobile can you be? Yes physical in-person connections matter. The frequency is debatable. If you will need to visit regularly with key customers, suppliers, investors etc. how will you get there? Chances are that even if you live in startup utopia, at some point you will need to visit someone from “away”. If your location has the right infrastructure, even regular meetings might be more manageable than you think. How car friendly is your town? Is there an international airport nearby? How strong is your internet connection? What infrastructure matters to you?
I’ve lived in almost all of New England, including the startup hotbed: Boston MA. I can tell you that Boston is not car friendly, the public transport and taxi’s are notoriously painful and you will underestimate the hassle of ZipCar. In comparison, Portsmouth NH has free parking, is about an hour drive from three major hubs: Boston MA, Manchester NH and Portland ME, has a shuttle bus to the Boston international airport, express buses to Boston and New York, our own airport, not to mention a working water port. Portsmouth sits nicely in the seacoast region’s melting pot of NH, ME and MA.
Your startup has an even better chance of succeeding, wherever you are located, than ever before. If you are interested in getting a rundown of what startup resources are in your area, if want to determine if where you are is the right fit for your business and what locations you might consider as your business grows — Simply email me: Stacie@provadomarketing.com and I’ll send you a tool to help you decide.
Author
Stacie Andrews, CMTO and President of ProvadoMarketing.com
I work with Founders and CEOs to design state-of-the-art go to market solutions. My unique blend of business innovation methodologies, marketing and technology expertise is highly valued by companies to accelerate their growth.
* This article was inspired by my work with the Wasabi Ventures Academy whose focus is on Early Stage Startups. The opinions here are my own and do not necessarily reflect those of Wasabi Ventures.
