Silicon Valley Isn’t For Us

Don’t buy into the myth that is Silicon Valley

For every unicorn that comes out of Silicon Valley, there are thousands of other startups making incredible products and growing like crazy in cities like Los Angeles, Sydney, Singapore, Brazil, London and Atlanta.

But unless you’re in the space (read — obsessed with startups and how they grow), you’ve probably never heard of most of them.

Is that because they’re second-class companies? No way.

I think it’s because they’re busy building great products and they have an insane obsession not on impressing their investors or the media, but on wowing the hell out of their customers and building a business based on real numbers, not vanity metrics.

“You want to make a great movie, go to Hollywood” is what they used to say.

“You want to build the next big thing in tech? Go to Silicon Valley” is what they used to say, too.

But we’re now at a tipping point where location is mostly irrelevant when it comes to building a big, important software company if you make a few smart decisions early on.

Want to build a great software company? You don’t have to be in Silicon Valley anymore.

So what’s changed in the last few years? Well, let’s have a look:

  • Tech: Cheaper than ever. One word — Amazon. This reduces the need for DevOps and similar engineering talent (of which there’s a high concentration in Silicon Valley) to scale infrastructure.
  • Talent: Insanely smart people are realizing there’s more to life than smashing out 100 hour weeks, every week, sacrificing their health and paying insanely high rents — especially when they want to get married and have kids. They might consider other cities like Austin, Atlanta or L.A. Or they might even join a remote team and work from wherever-the-hell-they-want for a few years.
  • Advice: Founders of startups outside Silicon Valley are openly and honestly talking about what’s worked for them and what hasn’t. With a bit of research on Google, Medium, Quora, Clarity.fm, etc, you can uncover a huge amount of insight about what it takes to build a company outside Silicon Valley, especially when it comes to attracting, hiring and retaining technical talent or raising capital.
  • Success: There are now hundreds of successful tech companies that have been created outside Silicon Valley. They’ve paved the way for the next generation of startups. Some have raised huge amounts of capital (Qualtrics, DOMO, Atlassian, Drift, BigCommerce — which I co-founded), some have raised a small amount of capital (Zapier, Baremetrics, Airtasker, Audience Republic, Commission Factory, Biteable) and some have remained bootstrapped (Basecamp, Groove, Changefox).
  • Market Size: Everyone is comfortable with the idea of paying a monthly fee for software. Everyone has a smart phone. Internet access is omnipresent. When more people have the necessary tools to consume your product, your market expands. That’s most definitely happened over the last 5 years, meaning you no longer have to rely on early adopters (of which there’s a high concentration in Silicon Valley) to gain initial traction. The early majority can be your first customers in any established market or vertical.

If I had to sum up the idea of going to Silicon Valley as a requirement for creating a successful technology company in 2017, I would call it a limiting belief. The evidence is real and it’s not required.

In fact, I’d even argue that being in Silicon Valley to launch or grow your startup puts you at a severe disadvantage, because you’ll have to compete with growth-stage companies (Uber, Airbnb, etc) and incumbents (Google, Microsoft, Apple) for talent — and these guys have unlimited hiring budgets.

I’m talking million-dollar-sign-on-bonus budgets. And trust me, it sucks to hear someone’s turning down your offer because Google offered them a million bucks on day one.

How do you compete? You can’t.

Whether you’re in Vancouver, Chicago, Amsterdam, South Africa, Melbourne, Stockholm or Singapore, today it’s easier and more possible than ever to build a successful technology company.

I run a private mentoring group for founders called Inner Circle. If you want to learn proven growth strategies, make fewer mistakes and hang out with other smart founders, you should check it out.