The Startup Location Matrix
Over the last month, I have written a series of blog posts associated with where a company locates or starts. I don’t have a simple answer – but I propose the following considerations as founders, funders, and ecosystem builders.
I believe that for any given company, there may be multiple correct answers about where to locate, with comfortable tension residing in the following considerations:
1) Being close to your first or best customer might require you to move your company;
2) Being close to home often means that companies have more support (and potentially a deeper network to find customers and talent) around them, leading to greater success in the long run;
3) Being connected to and learning from other places with smart, talented people of diverse backgrounds is important to ensure broad product/market fit and to find talent;
4) Finding talented people with the skills and determination to work in your startup is very important;
5) Clusters have more supporting companies, potential buyers, partners, and talent that can help your company grow.
Way down the list are traditional economic development location metrics – such as shovel ready sites, infrastructure, underlying cost structure, and schools. It is not that these things do not matter, it’s that they are not as relevant in the first two phases of company growth – when a company is going from $0-$5million in revenue. They are simply less important than the other factors above.
I would like to hear from you about your experience. Please email us or find us on Twitter @omahachapman.