The One Thing That Can Drag Your Company Down

November 9, 2015, 4:39 PM UTC
Courtesy of Fattmerchant

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 Suneera Madhani, founder and CEO of Fattmerchant.

As the CEO/founder of a company born and bred in a city that‘s as far from Silicon Valley as one could getOrlando, FloridaI can confidently say that being in Silicon Valley is not nearly as important for startups as many people think it is. In fact, I truly believe that had we taken Fattmerchant to the Valley, we wouldn’t be the company or team we are today.

With everyone flocking to Silicon Valley, the startup market there has become completely saturated. Competition is fierce, and even if you manage to claw your way to the top, the chances of you staying there are slim to none. Creating and running your startup in a city that might not be the obvious choice brings a slew of advantages your way, allowing your business to grow into the kickbutt mega house it was meant to be.

Operating in a city outside of the Valley allows you to be a big fish in a small pond, meaning you’ll be able to garner more press and media attention for your startup. In the Valley, there’s a new “next big thing” or “unicorn” every single day. So even if you are picked up by a media source, you’re likely to be quickly tossed aside. By building and growing in an outside city, you’ll be able to garner much more media attention and build relationships with media outlets. Nurturing these relationships will allow you to become a thought leader in your community and will mean lasting “buzz” for your startup, which often leads to national attention. Great public relations and strong community leadership can do much more for your startup than a zip code.

See also: The One Thing More Important Than Being in Silicon Valley

In the Valley, it‘s extremely difficult to build and retain a talented team. With so many companies clamoring to find the best talent they can, you’re less likely to get the caliber of team members you need and deserve. If you do, the endless poaching makes it nearly impossible to retain the dream team you worked so hard to put together. By operating in an outside city, you have the potential to be the top dog when it comes to recruiting. Attracting talent will be easier by tenfold, and instead of hunting for new employees, you’ll have the most talented members of your community not only reaching out to you, but also staying with you long term.

When deciding where you’re going to build and grow your startup, cost is one of the most important things to consider. Silicon Valley is astronomically expensive to operate out of, and for the majority of startups, it’s not nearly worth it. With so many companies vying to be there, space is limited, demand is high, and rent is skyrocketing. Everything from utilities to food will be more expensive when you’re based in Silicon Valley. By building your startup in a different city, your dollar will go five times further and you’ll be able to put that money into things that are more important to your business.

Building your startup in Silicon Valley may have been seen as a ticket to success in the past. However, that idea certainly does not hold up today. In fact, for many startups, moving to the Valley could be the very thing that drags them down.


Read all responses to the Entrepreneur Insider question: How important is it for startups to be in Silicon Valley?

The Biggest Downside of Moving to Silicon Valley by Allison Berliner, founder and CEO of Cataluv.

What Virgin Mobile’s Cofounder Wants You to Know About Silicon Valley by Amol Sarva, cofoundera of Virgin Mobile USA and developer of East of East.

The Silicon Valley Myth: Proof Your Startup Can Thrive Elsewhere by Fayez Mohamood, cofounder and CEO of Bluecore.

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