The idea of the start-up was central to the Silicon Valley, then San Francisco and even New York. Today, we’re seeing start-up in all corners of the map. Yet, how much of an indicator is location to ultimate start-up success?
Start-up founder Sumaya Kazi, founder of Sumazi, roughly a version of LinkedIn that connects users with people they ‘should know,’ set up shop in the hustle and bustle of San Francisco. Along the way she’s met a team of talented start-up founders across other industries – in as common place a spot as the gym. These natural encounters have stimulated priceless networking contacts and connections that no formal networking event or introduction could match. Setting up shop in the heart of start-up culture is definitely a way to go for the rewards it brings in terms of new colleagues and partnerships.
Grant David, author of “Where Startups Are Matters More Than What they Pay,” agrees that people matter. His article, published in Entrepreneur, argues in favor of setting up shop based on whether the best talent is and/or where your customers are. He cites the Silicon Valley for example, adding that it’s the Mecca of startups simply because that’s where the biggest and brightest pool of engineers are. It doesn’t make sense to locate a tech start-up in Boise, where you’re then crippled by relying on the one or two engineers that meet your needs. The same consideration for labor can be applies to parts/materials; you need to be where your source is so you can loop supply and demand.
An Entrepreneur article entitled “6 Ways Your Startup’s Location Can Boost Your Bottom Line,” concurs with David. Here writer Peter Cohan shares definitive benefits for staying close to a start-up hub, including: (1) Access to pillar companies, (2) Access to universities for innovation and talent pools, (3) access to peers, (4) access to desirable parts of town where people want to live, (5) access to investment capital, and (6) access to mentorship.
Facebook’s Mark Zuckerberg would disagree, reflecting that “[Silicon Valley’s] not the only place to be, I think… Honestly, if I were starting now, I just would have stayed in Boston.”
Danielle Schlanger would agree with the idea of exploring other options. Having penned a compelling article in Business Insider entitled “You Don’t Have To Be In Silicon Valley To Have A Successful Start-up,” Danielle notes that “a company’s available capital, product development, and ability to innovate are better indicators of success than geography. Moreover, mobile devices and cloud computing allow employees to connect with peers and conduct business from virtually anywhere.” It’s not just about the workforce. Start-ups needs idea men, venture capitalists, investors. She’s arguing that these people can be found anywhere. I’d add that the true spirit of a start-up is idea based, meaning it doesn’t rely on raw materials that shackled businesses of yester year.
She cites Walt Street Journal’s Emily Maltby, who identifies “a number of U.S. regions that have developed into hubs for specific industries.” To a long list, she adds Indianapolis. “Indianapolis as the center of a life-sciences boom, San Antonio as a city thriving off of cyber security, and Nashville as a place where the healthcare industry fuels an infectious entrepreneurial spirit.”
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