With the coming of the New Year, there is a ton of excitement around technology and the innovations we will see over the course of 2016. Things like virtual reality, new platforms, and more people getting into the tech field have caused much attention from the public. With that said, one of the focuses that should be on every tech founder's mind coming into 2016 is real estate.
You might be a little confused about why this is the case. In actuality, my prediction is that many new entrepreneurs starting tech companies will have to make huge decision early on in terms of buying office space, what city to headquarter in, and where to recruit talent. Lets dive into why this is:
It's become obvious that San Francisco is where almost every tech entrepreneur wants to be. While the benefits like funding, talent, and the startup ecosystem are great, when we look at the increasing real estate prices things start to look grim.
According to the team at Program Realty, "you'll have to pay as much as 7 times the rent in Silicon Valley that you would in other places in the U.S.". Even if you have a small startup and want to work from home, living expenses will start racking up quickly. If you didn't know, California is in a major drought. What this means is that water bills are higher, along with the rest of utilities. As an early stage company, you'll need to ask yourself if cutting your runway significantly is worth coming to the tech hub of the world.
The good news is if you can't afford real estate in San Francisco, there are plenty of other places where people are building great startup ecosystems. One that sticks out the most to me as a rising ecosystem in 2016 is Las Vegas. Tony Hsieh, Zappos Founder, has personally put in $350 million to build up the start up ecosystem in Vegas and the improvements so far have been impressive."He has created the most incredible marketing I have ever seen," says mayor of Las Vegas Carolyn Goodman.
Look for Vegas to be the top of entrepreneur's lists to headquarter in 2016.
International business has made great strides in 2015. Countries like India have made massive progress in entrepreneurship and working with American companies. While outsourcing has been a major headache for years and years, many companies have worked to make the process much easier.
With that said, a more common thread that we're starting to see are companies setting up offices internationally to help manage their outsourced developers. For companies that outsource to India and Peru, this may be a great option.
The other benefit that comes with this is access to another customer base. We saw huge growth in Indian startups in 2015, and this will grow faster in 2016. If you're looking for international real estate this next year, I'd put India on your radar.