When it comes to choosing a location for a startup, many entrepreneurs head for the hills of Silicon Valley or a few other tech hubs across the country. Oftentimes this happens because of the perception that a high-tech startup must be located in a traditional urban “high tech hub” in order to be considered legitimate. However, remaining in your original hometown may actually be a better practice for business success, according to a recent study from the Yale School of Management. The study, from Olav Sorenson and Michael Dahl, suggests that startups that remain within their founders’ home region are more likely to earn higher profits and survive longer than companies that relocate.
Advantages to staying local can include lower overhead costs, avoiding heavy competition for talented employees, and even having the comforts of home to help ease you through the inevitable stressful periods. Yet, for all the clear advantages, you’ll still face significant challenges when based outside the center of the high-tech world. How can you effectively interact with potential partners and clients who are largely based in the hubs? Where will you find the necessary investments? How will you get noticed by journalists and thought leaders if your office isn’t in Silicon Valley?
Challenges may exist, but they don’t negate the benefits of remaining local, nor should they undermine the desire to keep a business local. Here are some tips to help you build a successful high-tech business in your hometown.
• Tap into Local Support
One of the biggest fears for startups based outside of major technology hubs is that they may be too disconnected from key investors to get the company off the ground. Yet one of the best ways to raise the initial capital necessary for early growth is to access networks that you already know: family, friends, and colleagues. If they can’t provide the support themselves, they would still be the most likely to provide the connections to someone who can. Additionally, because you’re looking to build a local business and employ local people, see if your municipality has any programs, tax breaks, or other support to assist growing startups. And remember, the key is to develop a strong product. Once you’ve accomplished this, few things, and certainly not distance, are going to keep investors away.
• Feel At Home
Building a successful startup is a process that includes more than just one innovative idea. Along the way, any entrepreneur is sure to run into obstacles that require creativity and the inevitable brainstorm. Whether it’s a coffee at your favorite café, a walk through the local park, or a ride on your jet ski (my personal favorite), having a location that inspires creativity nearby can make all the difference.
• Make Sure You’re Wired Correctly
Just because you’re physically separated from major tech centers doesn’t mean that your communication with them has to be affected. Developing the necessary tech infrastructure to ensure effective communication is imperative. This can include cloud storage and sharing capabilities, VVoIP (Video & Voice over IP) for conference calls, and even making sure you have an Internet backup in place in case of a crash in your primary system.
• Leverage Local Talent
One of the biggest challenges for small startups in major hubs is finding talented employees willing to shun the money and prestige of the major tech firms for the unstable, risk/reward offer of a startup. By remaining in a smaller market, your company has the opportunity to become a big fish, albeit in a much smaller pond. Make sure to visit your local university or college and speak with the resident job support office. By gaining access to these talent pools, you can have your pick of the litter as opposed to fighting over new graduates in Silicon Valley.
• Show Your Local Pride
Many companies see a Silicon Valley address as a stamp of approval, but your exotic location can serve as a major point of interest and a conversation starter. In other words, flaunt your hometown commitment and highlight homegrown roots. This can serve as a major advantage in garnering municipal support, local investors, and even media attention.
• Think Global
Even though your business is based in your hometown doesn’t mean you should be there all the time. Instead, it is important that you take advantage of the joys of modern transportation. Whether it’s to meet with investors, participate in a tradeshow, or embark on a media tour, you need to be prepared to take the necessary business trip. To save money, take advantage of conferences as excellent opportunities to meet with a range of prospective clients, investors, and other industry players. Attending even one or two key conferences a year can provide the business leads and connections that will help you build your business.
Chris Cope is founder and CEO of Biloxi, Miss.-based SlimWare Utilities, a software company that automates the solutions to the world’s most common computer problems. SlimWare Utilities provides crowd-sourced, cloud-based applications that clean, repair, improve, and optimize PCs.
[Top image credit: James R. Martin/Shutterstock]