Note: The full article on this topic first appeared on Inc.com. You can read it here.
Entrepreneurship is a difficult yet rewarding journey. Entrepreneurs and investors alike are driven to a place where we can be surrounded by those who also value what we devote our time and energy to. However, assuming there is only one place where innovation truly happens is in fact harmful to the startup ecosystem.
Avalon Ventures is a bi-coastal VC firm and we love Silicon Valley and the role it plays in the ecosystem of innovation. There’s no denying that there are benefits of being in the Valley, not least of which is the propensity for large companies to “buy local” in terms of acquisitions. But assuming there is only one physical place where entrepreneurship abounds is as dangerous as believing there’s only one place and one time that’s best for starting a business. It’s just not the case today.
The four reasons to build your company right where you are:
1. You already have access to a vibrant startup community
Today, there are more places than ever to find support, encouragement, ideas and advice virtually. Although this is not a replacement by any means to relationships in the real world, founders and investors alike are open to virtually sharing insights into how to navigate the highs and lows of creating and running a successful business.
Just read a few of the conversations I’ve come across recently that do one or more of these things:
- What should you value more: your users or growth? Dark Side Of The Curve
- How do you hire the right people? Weird Hiring Tactics From Three Killer Startups
- Why didn’t it work? The Post-Mortem on 76 Startups
- How to deal with depression: Entrepreneurial Life Shouldn’t Be This Way – Should It?
- Should I keep going? Life In The Trough of Sorrow
- How do I get more users? Theres Only A Few Ways To Scale User Growth: Here’s The List
- How do I find out what my customers really want? What Not To Ask
There is a vibrant community unlimited by a physical place right at your fingertips. Embrace that.
2. You’ll be too late if you wait until you get to “Silicon Valley”
Being at the “right place at the right time” is the wrong approach no matter which way you look at it. That is like saying that the only business worth starting is a unicorn business. While some VC firms obsess over finding these one-in-a-million opportunities, most firms know that there’s significant value in investing in an idea and team and helping them become as successful as they can be.
We have a long history at Avalon investing in early stage companies with tremendous success. Recent research by Correlation Ventures and others shows that West Coast and East Coast companies had nearly equal VC returns, despite varied entry and exit valuations. The bottomline? Both can be pursued with great success.
The lesson here is to not concern yourself with being in the right place at the right time or starting the next billion dollar business. Instead, focus on solving a real problem right where you are in an unorthodox way, and exciting things will follow. Then, if later on a move to the West Coast or elsewhere is the best way to continue to grow your business, that will become obvious to you.
3. Building a company where you are encourages experienced talent to come to you
Too many VCs, advisors and even founders bullrush their way into a company’s procedures, ripping a page out of another business’ playbook. There’s nothing more harmful than this. What is most important to know is that what works for one company doesn’t work for another, and too many inexperienced voices can cause chaos and confusion.
That’s why I am so passionate about helping founders build an effective board. At the end of the day, the founder needs to own the decisions and the decisions of the board — and not let the inmates run the prison.
I encourage founders to be very choosy about the voices and opinions that influence them.
4. Diversity in innovation
Confirmation bias, leading questions, cultural assumptions are all drawbacks of a community that is too homogeneous. It is of additional importance to know what’s going on outside of the startup bubble.
TechCrunch recently discussed the VP of Devil’s Advocacy, an office that requires dissention when too many people agree. This problem typically occurs when founders become too heads down into the product and even more so when we remove ourselves from the real world and fall prey to group think.
The question I pose here is this: Can we truly create meaningful, game-changing products and services if we don’t understand the real issues and problems?
As a bi-costal firm, we have seen the benefit of growing a business right where it is. Silicon Valley is a place we get excited about, invest in, and that has done great things for the startup ecosystem, but if you start something right now and build it where you are, you will have taken the most important step on the road to success.