The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “How important is it for startups to be in Silicon Valley?” is written by Amol Sarva, cofounder of Virgin Mobile USA and developer of East of East.
Where you are matters a lot. Your cofounders, investors, advisors, and team members are all going to be spending lots of time there. And all of these people are webbed into the other companies and experiences available in that region.
For many businesses, some of the key customers will be in-person local relationships early on. So it matters where you are—these people need to available there. In Silicon Valley, there are lots and lots of such people, but two things to think about:
First, it’s very competitive on every one of these fronts, and it will be hard to get the best people involved with your company if you don’t stand out. This could be disastrous, as you don’t want “wisdom” coming from wannabes. Inexperienced investors are anxious and distracting, newbie engineers often end up re-inventing the wheel, and green cofounders trip into jealousy instead of creating value.
Second, there’s new development that cities like New York are exploiting. Suddenly the startup world is deeply embedded with retail, finance, media, pharma—industries where the advisors, investors, customers, and talent are mostly outside of Silicon Valley.
The only true mistake is to put yourself in a place where none of the people you need are available in good supply and good quantity. Some cities are charming, but it’s already hard enough to start a company. You don’t need to start an urban renewal movement, too.
Amol cofounded several startups including Virgin Mobile USA, Peek, Halo Neuroscience, Knotable, BEMAVEN, Knotel, and built a building in New York called East of East. He studied cognitive science for his Ph.D. at Stanford with undergraduate degree from Columbia.