Location, Location, Location. Does Geography Really Matter?
There are so many ways that you can feel really relevant in a market that you don't live in, where you don't have an office.
There are lots of cities that claim to be the best place for startups to grow. San Francisco, New York, Boston and other metropolitan areas all claim to offer access to funding and talent. Startups are always asking the question: Is the grass greener somewhere else?
The Impact Seat basecamp is the Boston area, another magnet for entrepreneurs, yet only about one-fourth of the tech companies in my portfolio have a presence here. The reality is entrepreneurs are everywhere. There are so many ways that you can feel really relevant in a market where you don't live, where you don't have an office.
Jessica Angell is founder and CEO of Cabbige, a business intelligence web application for small-scale agriculture to better manage such variables as perishable products, unpredictable inventory and unpredictable sales channels. She serves farmers in Iowa and other far afield locations. But she works in Boston.
Why? Because Boston is home for Jessica. She grew up there, came back after college, loves the city. She also thought about the cost of living and Boston, which is on the high end. On the flip side of that, it’s where she wanted to be starting a technology business. “It is nurturing, it's resource intensive,” she says. “It is a place that somebody starting a project that moves to a business that moves to a scaling business can access the best mentors, the best advisors, the best resources.”
As far as customers go, it's an evolving process because a large segment of the organizations she works with are in California. She is always flying out to California because that's where she sees the most traction. So that raises a prospective decision. Do you open up another office out there, do you headquarter on the West Coast?
There's a lot to be said for having your base somewhere that you're really comfortable with because you can always get on a plane and visit other markets. Or use technology to meet remotely. I sometimes teleconference with folks right here in Boston because it is more efficient time-wise than fighting traffic to get to a meeting.
I always warn startups especially to watch out for people saying, "Move to this location, you'll get funded better." Especially if the answer is, "Move to Silicon Valley, you'll get funded better." That is just a myth.
From the entrepreneur's standpoint, if a place is important to your lifestyle, to your family, to your personal happiness, you look at that. From a business standpoint, I think today you can market from anywhere. You can hire talented people who don’t live near you and still maintain effective lines of communication. There are great startups whose founders reside far from major cities and population centers.
I have many companies in my portfolio who have this very virtual or flexible footprint and some of them have a base camp but maybe then they do an accelerator in another market. I think it's an interesting and refreshing approach if that works for them.
But do not to feel like you have to move to get funded, to grow your business. Studies show that moving is the most stressful thing that people can do. Why would you naturally want to impose that on a startup that's sort of fragile unless you really wanted to be there?
This article is not investment advice, nor is it a solicitation to buy or sell any shares. Read more about Clarke’s angel investments, here.