Location matters for your startup

October 21, 2011

Signpost

18 months ago I relocated from my home town of Glasgow, to London, just 400 miles away. An important reason for the move was because I had just started working on my new startup, Teamly, and I know that location matters, even when running an internet business. Don’t kid yourself otherwise, your chance of success is seriously improved when you’re in a startup hub.

18 months later and moving to London has proved to be a smart move, for all the expected reasons, as well as  the unexpected recognition by the UK Government of London’s startups with the launch a year ago of “TechCity“.

Y-Combinator partner Paul Graham recently wrote an essay, “Why startup hubs work“:

If you’re in a startup hub, unexpected good things will probably happen to you, especially if you deserve them.  

And it’s not just the increased likelihood of serendipity, but to do your best work, who you hang around with matters.

Jim Rohn said:

“You are the average of the five people you spend the most time with.”

London VC Nic Brisbourne blogged about the need to be around the right people:
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All creatives, including entrepreneurs, need to hang out with others in order to do the best work, and so creatives of different types congregate in hot spots for their activity.  For tech entrepreneurs that is Silicon Valley and to a lesser (but increasing) extent London, New York, Berlin and Tel Aviv.

Hanging out with likeminded people is only possible when they are nearby and accessible.

What better way to get to know people than to have coffee with them? VC Mark Suster blogged onWhy you need to take 50 coffee meetings. He says whether hiring (or being hired), building rapport with journalists, raising money or understanding customer needs, you need to get out of the building and meet people face-to-face. If you’re not in the right location you could probably still have your 50 meetings, but would you be meeting the right people?

The quantity and quality of meetings – whether planned or by chance – will be influenced by what Brad Feld callsEntrepreneurial Density.

Following his formula, I’ve calculated the entrepreneurial density of some of the top startup cities, using Startup Digest subscriber numbers as an inexact, but best guess at the size of the startup community, divided by the general population in the metro area, using figures from Wikipedia . (Then I’ve multiplied by 10,000 to get an integer).

  • Boulder: 52
  • San Francisco: 30
  • Austin: 15
  • Boston: 10
  • Seattle: 8
  • New York: 6
  • Washington DC: 6
  • Berlin: 5
  • London: 4
  • Chicago: 3
  • Los Angeles: 3
  • Paris: 2
Paul Graham again:

The problem is not that most towns kill startups. It’s that death is the default for startups, and most towns don’t save them. Instead of thinking of most places as being sprayed with startupicide, it’s more accurate to think of startups as all being poisoned, and a few places being sprayed with the antidote.

Finally, here’s a few examples from my last trip to Silicon Valley:

1. At TechCrunch Disrupt I (literally) bumped into the founder of a long-established and very successful enterprise software startup, and ended up talking to him for an hour, and getting some great advice. He wasn’t even attending Disrupt, he’d come along for his buddy’s book launch. (His buddy was Eric Ries!).

2. I got an intro from a Scottish ex-pat, to a Palo Alto VC, who in turn connected me with one of Google’s Mountain View engineers responsible who worked on Google Apps from the start. Again, a long conversation and great advice followed.

3. Another entrepreneur friend tweeted an entrepreneur, and suggested coffee. That coffee meeting resulted in an introduction to Matt Mullenweg of WordPress, a really great intro for my friend given what his start is doing.

4. I was parking my rental car on University Avenue, Palo Alto when I looked up and saw an entrepreneur I know from London walking down the street. So I quickly jumped out the car and ran over to say hi. The guy he was with turned out to be James Hong, founder of Hot or Not.

Thanks for reading, I’d love to know your thoughts. Have you relocated, if so why? Would you NOT relocate, if so, why not? 


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