On Zapier - “Looks useful. They are in Missouri though, so this will die a quick death.” - Moderately Successful, New York, Angel Investor.
If I ever meet this investor in real life I’m going to have some fun with him.
It’s pretty common from tech industry, the press and venture capital to bask in the glow of the Bay Area. And to be honest the Bay Area has a lot going for it. But unfortunately, this enthusiasm sometimes leads to strange commentary about the impossibilities of building a business outside of major tech hubs like the valley or New York.
Quite frankly, that’s just simply not true.
I have a different thesis: the best place to start a company is where you are.
The Best Place to Start a Company is Where you are.
Starting a business is hard enough.
You have to build a product, find early customers, go through a handful of legal hurdles, and scrape together enough business to ensure that you can dedicate enough effort to the business to make sure it survives.
So what makes home so great?
1. Home is Where You Are Comfortable
On Day 1 of your company you have nothing. Everything has to be built from scratch. The only thing you have is your friends, your family and your surrounding.
At home you have a place to live. You have resteraunts you like to go to. Your support system is built up around you.
Why would you pick it all up on day one and have to rebuild your personal life as well?
2. Your Network Wants to Help
People in your hometown really want you to succeed and they’ll do things to help you that you won’t get elsewhere.
For the first eight months of Zapier’s existance, Brant Buksowsky let us work out of the Veterans United marketing offices at no cost. It’s unlikely you’ll get that sort of treatment when you aren’t the home team.
3. Leaving Is a Huge Distraction
You just started a company. Should the first thing you work on be building your company or moving your company? Moving is a huge expense that can take weeks to months of time. It makes little sense to take that risk so early on.
If a move makes sense, then there will be a time for that and it likely isn’t on Day 1.
4. It’s More Profitable
A study from the Yale School of Management shows that Startups Located in a Founders’ Home Regions Survive Longer and Earn Higher Profits.
According to the study “an entrepreneur with an average tenure of 6.4 years in a region had a 9% lower failure rate and earned roughly $8,172 more in annual profit. Each year a founder lived in the region reduced the failure rate by nearly 2%, and each additional year of tenure translated into $1,362 more in profits in each year of operation.”
One Dozen Examples
This isn’t just fluff stuff either. Zapier works with 180 tech partners. A quick back of the evenlope estimate shows that over 50% of our partners are located outside of the bay area and most are thriving.
Here are some great examples. Some of these companies are bootstrapped. Some are venture funded. Some are early stage. Some are later stage. Some stayed at home. Some moved elsewhere. But the commonality is they all started at home and got a significant start there.
In 1998 Tom Kulzer found AWeber, an email marketing application, in Chalfont, PA. They’ve since grown to 75 employees are privately owned and profitable.
Batchbook was founded in 2006. It’s now at 25 employees and serves thousands of small businesses across the world.
In October 2011, Joel Gascoigne and Leo Widrich founded Buffer across the pond in the UK. The were in the UK for 9 months and then SF, Hong Kong, Tel Aviv, and then back to SF proving that location doesn’t have to get in the way of growing a company.
Dwolla was founded in 2009 in Des Moine, Iowa by Ben Milne. Dwolla has attracted top notch investors from the from both coasts including Union Square Ventures, all while being located in Iowa.
Formstack launched in 2006 in Indianapolis, Indiana as one guy trying to make forms a little bit better. They now have customers in 110 countries and a team of 21.
Founded by Jeff Epstein in Detroit, Michigan. GetAmbassador, formerly Zferral, has a team of seven and backing from TechStars and other solid investors.
MailChimp was founded in 2001 in Atlanta, Georgia. The Chimp has grown over the years and now sports 130 employees and hundreds of thousands of customers.
Shopify was founded in 2006 in Ottawa. Since then they’ve raised $22MM in funding, grown to 174 employees and sold over 30 million products, all from north of the border.
The darling of bootstrapping and remote working, 37Signals was founded in 1999 in Chicago, Illinois. They’ve launched a half-dozen products, grown to 36 employees and are profitable.
Unbounce was founded in August of 2009. They have grown to 18 employees and raised $850k to help marketers attract more customers all from north of the border.
Wufoo launched in 2006 after being funded by Y Combinator. At the end of their YC batch, they moved the company back home to Tampa Bay. In 2011 Wufoo was acquired by SurveyMonkey for $36 million.
Zapier was founded in October 2011 at the first Columbia, Missouri Startup Weekend. For 9 months we bootstrapped the company and grew to almost 1,000 paid customers.
In 2012 Zapier was funded by Y Combinator and moved to Mountain View, CA. Today, Zapier has 6 employees, half of which work in Columbia.
Ultimately the best place to grow your company might be elsewhere, but there is no place better than home and no time like the present to start your company.
So rather than finding reasons for why your company won’t work, just buckle down and start your company. You’ll be surprised at what you can accomplish in just a few months of focused work.
Image credit to fotobydave
Posted on March 10th, 2013