Why Location Matters More Than You Might Think

by Nina Post

Being in the right location is important for so many things: building a startup company, forming professional and personal connections, and helping your peace of mind.

1) Startup hubs

There's a big difference between non-hub areas and significant hubs.

You'll find a number of elements in any top-tier startup hub, but just because an area has all of these doesn't guarantee it's going to be a startup hub. They're necessary, but not sufficient. You need:

  • At least one world-class university
  • An established base of both large and small technology companies providing economic growth, work opportunities, etc.
  • The option to live in a major urban metro, if you want to. There are certain demographics (engineers, recent college grads) that may prefer to live in a dense urban core.
  • Pervasive access to mass transit, especially light- or heavy-rail.
  • Availability of mentors who get what you're doing and will help -- people who have worked in these environments (technology companies) and want to contribute. They have to be active in the business world, not retired.

The startup companies that find success outside hubs are successful despite their location.

If you're building the kind of company that's going to need outside funding, it's not a secret that very early-stage investors prefer to invest close to home.

If you form that kind of business in a location where those investors aren't concentrated, or don't exist, it's going to be a lot harder to raise money and grow the company. Why handicap your startup by building it in a place where there's zero investment activity?

2) Professional and personal connections

Building and running a startup is an insane amount of work, and it's hard on the founder.  Everything feels precarious and fragile, like you're walking across a frozen lake, don't know how thick the ice is, and can't see to the other side.

Unless you happen to get super lucky, and fast, you'll be working on your startup all the time. It can be extremely isolating. And if you're in a location where you only know people who work for big companies, you'll be surrounded by people who are constantly taking vacations. The founder doesn't get vacations like that.

And it's especially annoying when people who work for big companies are always saying they're so busy, and yet take a vacation every couple of weeks:

If you're in a startup hub, it's much easier to find other founders who can commiserate with you, and that's huge. It's so important to just have someone acknowledge, let alone understand, what you're doing and what you're going through.  

But a hub is also extremely helpful for finding mentors, early-stage funding—and other crucial resources like co-working spaces, identifiable sources of seed funding (angel networks or seed-focused VCs), and accelerator programs. Even if you don't plan on applying to an accelerator, the presence of it cultivates other positive effects in the ecosystem.

But location isn't just important for startup founders. If you're a screenwriter—especially a young one in your 20s—it would be a hell of a lot better for you to be in L.A., for similar reasons.

In the book Powers of Two, Joshua Wolf Shenk talks briefly about what sociologist Michael Farrell calls "magnet places" where creative people form partnerships and connections. You'll have more magnet places—schools, events, accelerators, and more—within hubs.

All of those serendipitous meetings that form connections are much more likely to happen in a hub. Shenk writes, "Even in the age of laptops and smartphones, the best work still seems to emerge from person-to-person contact."

3) Peace of mind

Living in a place where there's a kind of support system, and where you can meet people who are doing or have done similar things, is really helpful. Plus, the weather's probably better.

As a startup founder, you want to simplify things as much as you can. For some, that means living in a place where you don't need a car. In addition to mass transit, there are a lot of options for car-sharing and ride-sharing in Seattle and other tech hubs.

Of course, we don't always have the ability to move somewhere to pursue what matters to us. But when you're at a turning point and have a chance to pick your location, or at least choose among a few realistic options, it pays to look for the place that offers you the greatest opportunity to join an ecosystem of others who are reaching towards similar goals.

Like what you just read? Sign up for my newsletter for more tips and techniques for being creative and productive.