Is location important for a startup?


2

I always think that location is somewhat important for a startup, and I always think that USA is a perfect place for a startup because it has a large market (of 300 million people). My (premature) assumption is that if you can reach the American market, you can reach the rest of the world because if you can grab a large market in US, that can make it easier to convince the rest of the world market.

Sure everybody say that with a startup you can be virtually anywhere, but you need to be close to the market to do the marketing. CMIIW. If you can be in the US, you can market your product, and the US market will do the marketing to the rest of the world. And again, how many big names (like facebook, twitter, etc) that comes from outside of US?

I also see that the Americans seems to be more willing to spend some money for memberships compared to other parts of the world. Maybe because the income rate there is higher?

I'm not trying to throw a flamebait here, I'm just trying to prove whether my (premature) assumption is right or wrong and opening up a discussion. I haven't been in the US myself, but this is the way I see it, so please correct me if I'm wrong. Anybody got any thoughts or different point of view about this?

Location

asked Oct 18 '09 at 08:03
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Jpartogi
1,342 points
  • Cool. It looks like most people agree that US is a great place for a startup. :-) – Jpartogi 9 years ago

5 Answers


1

Location is very important to your startup. It is important that you have access to the talent that you need to build your business, as well as the market who will become your customers. Within the US some areas are better than others depending on the type of business you are starting. For instance, a technology startup has access to a larger number of software developers in Silicon Valley than you would in a city that doesn't have a technology culture.

You can start a business anywhere, but if you don't have access to talent to grow it, capital to fund it, or customers to feed it, you will start out with obstacles in an already difficult path.

Matt

answered Oct 18 '09 at 13:03
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User965
21 points

1

I would say this depends greatly on your skill set, business goals, and available on hand funding.
If you are looking to attract funding, have a moment of rapid growth that leads to a exit strategy, I would certainly say head to Silicon Valley.

On the other hand, if you plan on keeping the company running and not exiting, and you have the needed skills, and can fund the company some how staying out of the USA might not be a bad move.

Silicon Valley is extremely expensive, and if you aren't looking to be bought out, to obtain funding, or need to physically hire people then there is probably little point of being there. You might instead move to one of the cheapest places in the world, and simply hire employees/contractors if you need them remotely and manage them remotely. Your costs can be much lower, same with taxes, and you may have other benefits like country provided health care, etc.

answered Oct 18 '09 at 18:02
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Centurion Games
626 points

1

The answer depends on the business. For real estate, location is everything, for a website, location is not that relevant.

I heard a lecture by the founder of friendly robotics, which makes robots the mow the lawn, and he said that the company assumed that their main market would be the united states, but it turned out that the European market is better for them, since the competition is not as fierce there, the lawns are smaller (smaller robots can take care of the entire lawn) and other factors that they did not consider when they started the business.

Answers.com is ranked number 13 in the united states and 39 globally, and it is an Israeli website. Shopping.com was also Israeli until it was sold to eBay. Orkut was not from the US until Google bought them. You might need to visit the vally from time to time, but you don't have to be in the US to start a company.

answered Oct 20 '09 at 18:11
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Ron Ga
2,181 points

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The best place, by far, to build a tech startup is the San Francisco Bay Area. For one thing, yes, the US market is more developed and has a very large audience ready to consume technology. But more importantly, in the Bay Are you will be around a very large number of like minded entrepreneurs and talent. You will have a much better time hiring, comparing notes, setting up partnerships, raising money and selling product.

answered Oct 18 '09 at 14:10
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Pbreit
379 points
  • I'm really interested to know why the US market is willing to spend more cash on technology consumption. Psychological reason or economical reason? – Jpartogi 9 years ago
  • (If you think Americans love spending on technology, have a look at Japan!) – Chris W. Rea 9 years ago

0

Here's what answers I got in a related question:

http://www.brightjourney.com/q/best-geographical-location-business

answered Oct 20 '09 at 17:38
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Slavo
316 points

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