Technology startups continue to find ways to improve tasks for individuals and businesses, but is northern California’s Silicon Valley the only place to do it?
Technically no, because more entrepreneurs are launching operations outside of the “superhubs” — Boston and New York — but Harvard Business Review author Maxwell Wessel argues that going against the grain could be disadvantageous.
“But the reality for entrepreneurs outside of the established startup meccas is a difficult one: if you start a technology business somewhere other than the San Francisco Bay area, New York, or Boston, you’re stacking the deck against yourself,” Wessel said.
Startups have a higher chance of succeeding, getting acquired and receiving financial backing if they break ground within these superhubs, according to HBR. In fact, the chances of making through all three stages of entrepreneurial activity is significantly higher.
It may not appear that way in stage one where 61 percent of superhub and 39 percent of other cities pass, but by stage three, the difference is 80 percent for Silicon Valley, New York and Boston, in comparison to 21 percent.
“If you do come to the Valley with the right ammunition–a solid investment thesis, proven model, traction, and execution track record–no matter where you come from, investors will shower you with financing,” Mitra said.
In other states, the competition may not be as high, but that means the amount of funding that is available is much lower. Larger venture capitalists have also made these superhub areas their home, which means they prefer to work with a startup that is located in the same city or town.
How to make the most out of living in Silicon Valley
Breaking ground in northern California has great potential, but the early stages of living in this market can be tough. It may be a tight-knit community among other engineers as Wessel explained, but it doesn’t avoid the “elephant in the room” — it’s going to cost a pretty penny to reside and work here.
There are ways to get around these costs without compromising quality. For starters, look if there are collaborative offices available. This allows newer startups to meet other like-minded individuals. Once choosing headquarters, forgo buying brand new business furniture and look into used office furnishings. These lightly used products are equally as functional and allow a start up access to high quality furniture without the retail price tag.