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 Gavin Stewart, co-founder and CEO of NavaFit.
At the end of the day, Wall Street is Wall Street, and Silicon Valley is Silicon Valley. There is a long and deep history as to why Silicon Valley is what it is to tech/startups. I’ve had the opportunity to work in the Bay Area and other tech centers—such as Route 128 in the Boston area—and there is definitely something special about Silicon Valley. The combination of early-stage investors, lots of builders (engineers and marketers), and the fact that it is the primary industry in the region makes it special. I lived in the Bay Area for three years in the early 2000s, and startups are without a doubt in the area’s blood.
That being said, I think that the very fact that there is a Silicon Valley means it has to be possible for other great companies to be created elsewhere. After all, Silicon Valley companies have helped create the infrastructure and tools that allow employees at other companies to work remotely. So there is no reason why a company in New York City can’t sell its wares to tech giants in Silicon Valley using collaboration tools like video chat, or why an Austin company can’t collaborate with a marketing consultant in the Bay area on strategy using real-time communications tools.
The major challenge for non-Silicon Valley companies is funding. There are simply more dollars put to work in Silicon Valley and more builders there. However, if a company’s backers aren’t in Silicon Valley, it can still compete in another city. Some Bay area VCs will even put money to work elsewhere if they like the team, the market, and the idea.
It’s easier to attract top talent when you’re based outside of Silicon Valley. Just imagine being able to recruit from your alma mater in your local city, where you can be the big dog on campus, vs. fighting for the attention of graduates of Bay Area schools and new transplants. And with more tech collaboration happening on Q&A sites, engineers all over the world are learning the same foundational skills.
There’s no doubt that billion-dollar companies will be built outside of Silicon Valley. The Bay Area has a great track record of this, which I believe is being exported to other parts of the country—and the world. As tech becomes a primary function in every industry, there will simply have to be other great tech companies created where these industries are resident. And best of all, Silicon Valley has already created a lot of the tools, mindset, and framework for this to happen.
Read all responses to the Entrepreneur Insider question: How important is it for startups to be in Silicon Valley?
The Key to Launching a Successful Startup by Josh Kaplan, director of properties and ventures at United Entertainment Group.
The Secret to Any Startup’s Success by William Vanderbloemen, founder and CEO of Vanderbloemen Search Group.
The One Myth Keeping Entrepreneurs From Success by Craig Morantz, CEO of Kira Talent.
The One Thing That Can Drag Your Company Down by Suneera Madhani, founder and CEO of Fattmerchant.
The One Thing More Important Than Being in Silicon Valley by Mollie Spilman, chief revenue officer at Criteo.
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.