Setting up shop in the Bay Area or Boston might seem necessary for a startup, but there are plenty of good reasons to locate your company somewhere between the two coasts. Maybe even where you already live.
When I launched ShortStack a few years ago, it was an offshoot of an existing business I owned. My team had created a simple software tool that was used to speed production in-house, but we realized pretty quickly that it could be useful to lots of other businesses.
Rather than packing up and moving to Silicon Valley, I decided to stay put. I made the decision in part because I had a young family and didn’t want to relocate, but also because it wasn’t a viable option. The cost of starting a business—well, the cost of everything in the Bay Area—was just too much.
Creating a startup is hard enough, even without the additional expense and stress of moving, of not having friends and family around, and of not knowing where the best restaurants are to take business meetings. I decided I had to make my new venture work in the place where I was already established.
Yes, there are benefits to planting yourself in a hub, but there are also plenty of advantages to setting up shop in a more isolated place.
Here are some tips that will help you start your business wherever you are.
1. Reach Out to Your Existing Connections
There’s a good chance that you know people who can give you useful business advice. The neighbor who runs a landscaping service? Maybe she uses accounting software that she swears will save you hours of time and a hundred headaches. Or that guy who owns a manufacturing company, and who knows all about the small-business regulations in your county? He might prevent you from getting sideways with the law. Or, you might be friendly with a local bakery owner who has an amazing social media presence and will be able to teach you everything you need to know about Facebook contests.
Even if you’re not in a tech hub, you’re bound to be surrounded by business owners of some sort. And even if these people aren’t in the same industry you’re in, they still might have valuable insights to offer. It’s often easier to leverage what you already have than it is to start from scratch.
2. Learn From People Who Have Forged Similar Paths
The beauty of our connected world is that mentors and other resources are just a quick Google search away. And you don’t necessarily have to have a two-way conversation with anyone in order to learn from them. Just digesting what they have to say can be super helpful.
For example, I pay really close attention to Jason Fried of Basecamp (formerly 37signals) and Ben Chestnut of MailChimp. I subscribe to their blogs, and I check in every quarter or so to see what they’re doing with their websites. During the last two or three years, I’ve managed to find the answers to almost every question I have about running a small business on the blogs of CEOs like these two guys. You can probably find columnists in your sector to follow on The Muse, or check out sites like Inc. It’s comforting to know that others have experienced some of the same challenges you’re facing and come through on the other side.
3. Use Your Money for More Things
Moving to a major city to get your startup off the ground really might not be worth the price tag. It just takes so much more of everything to make a go in a big city.
Take rent. For some businesses, rent is on par with payroll. At ShortStack, rent is number 18—18!—on my list of monthly expenditures. The average price per square foot for office space in Reno is $16. In San Francisco you’d be hard pressed to find space for less than $35 a square foot. In Boston it’s closer to $40.
Talent also costs way more in a big city. If you need a developer and you’re in Palo Alto or Chicago or Manhattan, you’re competing with Google and Facebook. But if you’re in anytown, Nevada, Nebraska, or New Hampshire, you can find people who would love the opportunity to be part of a startup.
Nevada has a tax structure that’s very favorable for businesses (and no state income taxes, which is great for employees). By saving money on some of the basics, we’re able to do more for our product and our team, like cover the full cost of health insurance and offer unlimited vacation.
4. Seek Out Local Support
Going to Silicon Valley to try to make it as a tech startup is like going to Hollywood to try to make it as an actor: People aren’t there to help you succeed, and the odds really aren’t in your favor. But as a tech startup in a non-tech community, you might find that you have tons of incentives and resources at your disposal. I read all the time about community leaders who want to be part of the tech boom and are asking themselves “How can we do that?” In Nevada, we have the Nevada Center for Entrepreneurship and Technology and the Economic Authority of Western Nevada, two organizations that are courting startup ventures all the time.
Through local relationships and organizations, you may gain access to anything from low-interest loans to access to venture capital that’s limited to local businesses (we have a couple of these in northern Nevada), and opportunities to speak at local business events.
I always remind people that Austin, Texas came out of nowhere (at least as far as tech hubs go). All the city had to offer was an internet connection and enthusiasm. Who’s to say that Reno, Des Moines, or Asheville can’t be the next Austin?
5. Focus on Your Product or Service
Technically this should be tip #1, because, duh, if you don’t have a good product or service, your odds of success aren’t great no matter where you are. It’s a good parting tip, too. If you are fanatically focused on your product and have an idea for something that is really good and useful and people like the product, your users won’t care where the company is located. You also have to have reliable customer service, consistent up time, fair pricing, and so on.
Being in a less well-known area should also help you keep a global market in mind. If you’re on the coasts, you might not realize that people in, say, Rockport (Illinois or Indiana) or Reykjavik aren’t as tech-savvy as your neighbors. Being an outsider forces you to keep the needs of every potential market in mind.
One of the biggest advantages of staying put? You can follow your own vision. In the tech hubs, there are lots of startup guys who love to offer advice, and some of what you hear might not square with your vision. If one respected person tells you one thing, and someone else advises something else, before you know it you’re spinning. Staying away from all that lets you follow the path you feel is right.