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 Michael Maven, founder of Carter & Kingsley.
As an active multi-founder in the profit growth/optimization space, I often advise and get to know the inner-workings of multiple companies. So I can confidently say that when you’re running a startup, there are definitely more important questions to be asking than where you should be located. But when you are deciding on location, the true answer will depend on what you’re selling.
For example, if your startup is a restaurant that sells gourmet seafood at gourmet prices, you’ll want to locate to a market that will react positively to you, and not set up shop in Podunk. However, if you’re a business-to-business company, the idea that you must be based in the Valley to be successful is more like the traditional (non-investor) unicorn—more myth than fact.
Think back to when Roger Bannister first ran the four-minute mile. Up until he did it, everyone said it was impossible. But once he broke the four-minute mile, the next person to do it took just 46 days to beat his record time. So once the mental belief was broken, more people could achieve the task.
I believe that we’re in a similar position right now with the idea that Silicon Valley is the only place to be if you want to run a successful startup. As time goes on, more people will see that this isn’t a rule, but a belief. Although there are plenty of benefits to being there (finding talent, meeting investors, integrating with partners), the Valley doesn’t guarantee success.
Being located in a lower-tier city will bring benefits that the Valley can’t. You won’t pay through the nose for space or talent, and the competition for both will be much lower. You also get to focus on work instead of the latest must-be-seen-at event taking place that week.
You can turn your non-Valley location into another benefit too—strategic meetings. You’ll still need to visit Silicon Valley to meet with investors, and then swing by South Park, San Francisco to make more connections and generate more intros. However, you’ll need to work smart and make your meetings count. You’ll be forced to bring your A game. Many founders within Silicon Valley don’t do this, and waste a boatload of time.
The trick is to drop in to Silicon Valley and build personal relationships. Create your own network of investors. Make sure your strategy to meet key public relations people is top notch. Deliver value—don’t just take. Once you do this, you can use technology to manage these relationships from afar.
Forget Silicon Valley. Look at Buzzfeed, Shutterstock, and Wish, all companies based around Silicon Alley (New York). There’s also Silicon roundabout, where Zoopla, Wonga, and Funding Circle are all big players. Even more interesting is Sweden. Companies like King (Candy Crush), Skype, Spotify, and Klarna are all natives. Some of these companies have famous Silicon Valley VC firms on board too, like Sequoia Capital.
There are no guarantees that being in the Valley will lead to success. Many startups are successful when not based in the Valley and many others fail when located squarely within.
The takeaway is that there are many other important factors that will determine how successful your startup is. Although location can have an influence, it only plays a part in a startup’s success.
Michael Maven is the founder of Carter & Kingsley, the market leader in developing bespoke profit growth strategies for investor portfolios and existing businesses, and also the founder and developer of the ECARR System used to power CatchAndRetain.com, an automated ‘hands off’ system which measurably turns more website visitors into customers.
Read all responses to the Entrepreneur Insider question: How important is it for startups to be in Silicon Valley?
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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.