Another line we’re fed by investors and fellow tech entrepreneurs, is that there’s no way to build a great tech company outside of Silicon Valley.
The San Francisco area and Silicon Valley in particular is touted as some kind of Mecca that all tech companies must succumb to at some point for the health of their product and certainly the state of their bank balance.
I’ve heard, hundreds of times, statements like;
“You won’t be able to raise money.”
“You won’t be able to hire great developers.”
“You won’t be able to hire great execs.”
“You won’t be able to get the media’s attention.”
“You won’t be able to network effectively.”
“You won’t be able to …” if you’re not based in Silicon Valley.
I fundamentally disagree. You don’t need to be in Silicon Valley to succeed and in some cases being there might even be detrimental to your growth.
Yes most of the large tech VCs are there and yes there is a large concentration of like-minded tech entrepreneurs that ‘could’ help you with your product or service.
However, Silicon Valley is one of the most expensive areas to live in the United States. When you are watching every penny there had better be a really good reason for spending all that money on rent.
The truth is there isn’t. You can get the same kind of support from other entrepreneurs online. If you deem your company to be in need of VC funding (and not all need it) you can catch a plane and a Lyft and visit all of them in one day. That’s what I did.
In Silicon Valley you are surrounded by people who are really enthusiastic about tech and can’t wait to try your new product or service. But this is not indicative of the rest of the country and certainly not the rest of the world. This is fantastic if your target market is a young, white, male, tech industry employee with a bike and a cat. But most companies have higher goals.
I built Treehouse (a +million dollar revenue company) in Bath, England. We now have 75 full-time employees and 80,000+ actively enrolled students. Most people in the US don’t even know where Bath is (it’s about two hours west of London, FYI).
Here’s our timeline:
- 2010: Founded in Bath, England
- 2011: Raised a Seed Round of $600,000 — from VCs based in Silicon Valley
- 2012: Raised a Series A Round of $4,750,000 — from VCs based in Silicon Valley
- 2012: Relocated to Portland, Oregon
- 2013: Team size hit sixty people, the majority working remotely.
There are countless other successful companies that are located a long way from Silicon Valley. Here’s a few;
- Basecamp — Chicago, IL
- Buffer — distributed
- SpaceX — Hawthorne, CA
- WeWork — New York, NY
- Atlassian — Sydney, Australia
- MailChimp — Atlanta, GA
- Red Ventures — Fort Mill, SC
- Cards Against Humanity — Chicago, IL
- Mojang — Stockholm, Sweden
Need I go on?
I will say one thing though — it has been vital for me to travel physically to important conferences or meetings to build strong relationships in Silicon Valley. You’ll need to allocate some time and money to occasionally travel to San Francisco and get some quality facetime to close deals.
Most of the building and maintaining relationships can be done via email and social media, which can be done from anywhere.
So if you can build a tech company from anywhere then where should you be? The answer is, where you want to be. Think about where you want to live and what lifestyle you need to be happy and build your company there. Choose lifestyle over financial gain. You’ll always be glad you did.
Here are some of the huge advantages to being outside of Silicon Valley and the Bay Area …
- Lower cost of living
- Easier to recruit talent at affordable rates
- Less traffic
- Less of an echo-chamber — you’re not competing against hundreds of other startups to get recognition and coverage
You’re not less-than
As a tech founder you will get some folks telling you how you’re insane for not being in Silicon Valley. Try to ignore them and do it your own way. Their arguments are normally based on outdated assumptions and untruths. We did it and I couldn’t be happier.
Thank you to Gillian Carson for collaborating with me on this article.