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Where to Locate Your Startup

August 6, 2008

So I got sucked into the 37signals live broadcast on ustream yesterday thanks to twitter. The session was, for the most part, a Q&A with Jason Fried and David Heinemeier Hansson spanning topics from server architecture for their products to their philosophy on startups and running a business.

If you’ve ever heard any of the 37signals crew talk before, you know that they have a strong opinion of just about everything and aren’t afraid to tell you what it is.

So it was interesting when a viewer posed the question of where should they locate their startup? Is it necessary to make the move out to “the valley” in order to be successful?

David responded adamantly against the need to move out to the west coast and in fact, stated that if you’re looking to build a real business and not just flip some startup, then Silicon Valley will most likely have a negative influence on your company.

While I don’t necessarily agree with all the points he made, I do agree that you can stay right where you are and do just fine! This is especially true for web/internet software startups.

Reason number 1: Put money into your business instead of moving expenses and a high cost of living once you get out there!

Chances are you already have some pretty good connections in your local area that have taken time and effort to develop. These are valuable contacts that you can go to when you need their expertise, advice, or help. Why throw that all away and start from scratch in an entirely new location?

Entrepreneurial communities are springing up and growing like crazy near major metropolitan areas around the country and chances are you are closer to one of these than you are to Silicon Valley. Just look at the huge strides communities like Austin, Boulder, Boston, Seattle and so many more.

Another big reason to stay put is you will most likely have less competition for resources like quality people, investment money, office space etc. where you are than if you try and move your company.

The bottom line is why make things harder for your startup just so you can say you company is based in the valley?

Now with all that said, there are exceptions to every rule and it just may very well be that relocating your startup to the west coast could be the right move. Or even relocating somewhere else where your particular industry does well. For instance, Ontario, Canada has implemented some major initiatives to incentivize Clean Tech companies to come to their province.

If you are just getting off the ground with your startup and considering a move out west (or anywhere else), I would urge you to reconsider and think about the many advantages of staying put (especially if you are here in Dallas!).

Written by Bradley Joyce · Filed Under Startups 

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