Location, Location, Location

Big Red Car here.  OK, you know you need to move to Austin.  Whew, got that out of the way.

Let’s discuss the dynamics of location in the startup world.

Entrepreneurs, founders and CEOs are all considering the implications of location these days.

Why is location in play, Big Red Car?

Many founders find themselves moving about the country availing themselves of incubator and accelerator programs.  Once you make a move for that reason, it is infinitely easier to consider other reasons.

Chief amongst those reasons are the following:

1.  No location loyalty amongst founders and entrepreneurs–agnostic is the new religion on location;

2.  Huge operating cost differences between say Silicon Valley and, say, Austin, Texas or Raleigh, NC or Waterloo, Canada;

3.  Tax implications — personal and corporate — such as Texas having literally no taxes;

4.  The huge difference in core compensation (the costs to live including the cost of Mountain Dew at Sam’s or Costco) and compensation expectations (salary, benefits, options); and,

5.  Life style decisions–some places are not as cold as Chicago or NYC in winter.

And, remember we did mention the incubator and accelerator implications, right?

When is good enough, well, good enough, Big Red Car?

Silicon Valley has the best software engineers and they command a healthy compensation.  This may not be the startup ecosystem speaking, it may be well established companies like Google, Microsoft, Walmart (yes, Walmart is going nuts hiring software engineering talent) or Apple driving prices up.  Particularly now they are no longer colluding to deflate salaries, eh?

Can a salty startup compete with those companies for talent?  Yes, if they recognize they are offering the frenzy of the startup world as a plus not a minus.  Looking for job security — go work for Google, et al.  Looking for that startup mojo, work for a small startup but know 75% will fail.  Ouch.

This then firms up the challenge — do you need that level of talent and can you afford it?

The answer may simply be NO.  In that case, get along Little Doggie and get you down to Austin where there is a wealth of talent at a better price point.  [Pro tip:  Do NOT come for a visit in August.  Trust me on this one, sayeth the Big Red Car.]

So, location, entrepreneurs & founders & CEOs, is in play and you are a player.  [Hey, that’s the Roman Coliseum, right?  Yes, the Big Red Car is just joshing ya’ll  a bit.  Bet you thought that was the University of Texas Big Drum where they play basketball and Mick Jagger sings?  Haha, funny stuff, Big Red Car.  Ooops, sorry.]

Deep in the Heart of Texas (Gene Autry)

But, hey, what do I really know anyway?  I’m just a Big Red Car.

 

 

 

 

  • What about customers? One advantage a big city has is customers right outside the door that you can get feedback from in initial stages. Or, corporate customers if you are an enterprise SaaS product. Being face to face has a lot of merit in early stages.

    • JLM

      .
      Damn good point.

      Well played.

      And, then, of course, there is BBQ.

      BRC
      .