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Why It Matters Where You Build Your Start-Up

  |  September 4, 2014   |  Comments

Even in our hyper-connected world, positioning your start-up in one of the world's entrepreneurial clusters could help you set yourself up for greater success.

We all know that old real estate saying: "Location, location, location!" Sure, it's a cliché. But it's a cliché for a reason. And this trite saying applies just as well to any budding business, too. In our oh-so connected modern world, location can easily be deemed entirely irrelevant. When you can call, text, email, tweet, or Skype with anyone from anywhere around the globe, why should it matter where you're based, right? Well, maybe not. Oftentimes, location can make a huge difference.

Where you choose to base your start-up can very well determine whether it flops or is a smashing success. Here's why.

You Want to Be a Part of "That World."

You want to be where the people are. The people behind your company are the ones responsible for driving its growth and determining how far it gets off the ground. These people hold all of your resources: talent, investment capital, and advice. You're going to be meeting with them, grabbing coffee with them, and creating relationships with them. To build a successful company, you have to surround yourself with these folks. So go where your people are (or want to be).

The first step is making sure that you're positioned in a location with easy access to talent, mentors, and investors. Set yourself up in the spots top talent gravitates toward (and with more and more frequency, talent is gravitating toward urban areas, often based on specialization). You also need to be in the vicinity of experienced professionals in your industry, as these will be the ones to help guide your vision, raise capital, and inspire, motivate, and connect you. Ideally, you'll also be located in a place that allows you to tap into a great number of surrounding companies and universities - proximity to universities enables you to take advantage of the constant flow of young up-and-comers in your industry that they provide.

There's Strength in Numbers.

There's been a geographical trend in which similar companies have gathered in pockets regionally. Why? Because their close proximity to each other enables them to collaborate, share resources, and help each other thrive. These are places where innovative ideas flow more freely and resource pools run deep.

Choosing to locate your start-up in an industry cluster can greatly shape its future. It may be wise to head to one of the entrepreneurial clusters (Silicon Valley, Boston, and New York, for example) where symbiotic relationships are most prominent - obviously, VCs want to be close to entrepreneurs and vice versa. Operating outside these pockets of capital investment can make it that much harder to attract VCs.

You're a Product of Your Environment.

As is your company. Every location has a particular culture - and every culture has a unique set of values. These values naturally guide people's behavior within that location. Align your company's culture and values with your surroundings. And the quality of life in a particular city matters, too, especially when it comes to having happy and healthy employees. Be mindful of this and choose an environment that will attract and retain top talent.

In Short: Plant Yourself Where You'll Best Be Able to Grow and Flourish.

Considering that access to talent, mentors, and investors can make or break your start-up, there are clearly certain benefits to building your company in one of the common tech hubs. But in our hyper-connected world, if you have the connections to those vital resources, you'll be just fine.

As they say, great ideas (and even greater people) can come from anywhere. Ultimately, what will matter most is your passion and innovation. Trust me, successful start-ups have popped up all over the map, even outside of Silicon Valley or New York. VCs are drawn to great companies - and their potential for greatness - not just the city. When a start-up has stellar people and a clear vision, location is just another piece of the puzzle.


Alan Cutter

In the jungle of recruiting, Alan Cutter is the lion. Alan is Founder and CEO of AC Lion International

Prior to AC Lion, Alan was senior manager at OTEC and played an integral part in the company's evolution into HotJobs.com. 

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