Entrepreneur

Running a startup outside of the Valley

(Editors’ note: Ali Davar is the CEO of Worio, a Vancouver-based startup. He submitted this column to VentureBeat.)

It’s easy to feel left out if you’re a startup that’s not based in Silicon Valley.

We’ll admit to feeling the occasional sting of envy when we hear about the exciting events and opportunities taking place there from our headquarters in Vancouver, Canada. But we’ve also learned that there are some real advantages to being headquartered beyond the bubble – and that having a day-to-day presence there isn’t as important as it might seem.

Here are a few of the upsides we’ve discovered, as well as tactics for staying connected to the tech entrepreneur ‘mother ship’ while enjoying the benefits of your home base:

Avoid the “Valley premium” – Startups that set up shop in the Valley fork over a premium for the exclusive location. As one of the most expensive urban areas to live in nationwide (according to ACCRA), the Valley drives up basic costs, ranging from salary and benefits to rent and utilities. This means the $5 million in funding your Valley-based competitor receives may barely keep the lights on, while a smaller round of funding could mean major growth for your firm. Leverage this fact with investors that are interested in hearing about how you can do more with less.

Be the local rock star, instead of a dime a dozen – The Valley is like a modern day Gold Rush: the possibility of striking it rich draws the masses and every tech company wants a piece of the action. As a result, it’s easy to get lost in the crowd. (And, to add insult to injury, there are no economic incentives or tax breaks for your business.) In contrast, local governments outside the Valley bubble often give entrepreneurs the star treatment and big cost-savings— such as tax breaks or subsidized health care—to stimulate growth.

Recruit Valley ambassadors – An industry influencer or PR agency based in the Valley can serve as an advisor, champion your technology and help you penetrate the exclusive bubble – giving you a “physical” presence despite being geographically removed from the Valley. They can also teach you the lay of the land, arrange networking meetings, alert you to local events and help fine-tune your Valley strategy.

Don’t be a stranger – Travel to the Valley at least once a quarter, timing your visits around major conferences/events to maximize in-person meetings and networking opportunities. Regular face time ties a personality to a name, which ultimately may be all people remember about your company. It’s also a key ingredient for maintaining relationships.

Be a joiner – Participate in local industry and entrepreneur groups – not only will they help you build a stronger presence where you’re based, but they can connect you with sister organizations or other entrepreneurs in your industry that are based in the Valley.

Give your startup space to stretch its wings – The Valley offers a high concentration of opportunities, but niche industries often struggle to get even a sliver of that pie. Consider opting for an area with a concentration of companies in your space that can help nurture your startup with good talent and resources. Colorado, for example, has a strong portfolio of UI and design startups and Canada is known for its video gaming industry.

Take advantage of the talent – When you are a company of 10, your talent is your business. Without resource-wealthy giants creating silos for incoming talent, startups outside of the Valley have a fighting chance to recruit and retain great employees without having to resort to alternatives such as outsourcing – an option that has become less cost-effective in highly-skilled industries. Target areas with academic institutions that groom the type of talent you seek or governments that allow you to import talent without heavy regulation.

Take advantage of the upcoming economic turn – Historically, investors have had a primary focus on the Valley, but with Bay Area deals falling by a much faster rate than the rest of the country last year (57 percent according to Dow Jones) investors are now more willing to look outside the bubble for innovation.

Photo by christian.rondeau via Flickr


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