From HBO's Silicon Valley to The Social Network to Steve Jobs, popular culture has long suggested that there's only one way to build a successful tech company. It starts with one person in a garage with a hunk of hardware and a grand vision for how they're going to change the world. The entrepreneur then moves to Silicon Valley, becomes the darling of the venture capital community, raises money, goes public, becomes a global sensation and is then immortalized in a Hollywood biopic.
Except many startups fail to acknowledge how they could be better served by following a road less taken.
"It's not necessarily the wrong choice to start a business in Silicon Valley, but it's not for everybody," said Nextiva CEO Tomas Gorny. Microsoft, Amazon, and a number of other successful companies started and stay out of the limelight of Silicon Valley.
Gorny explains that entrepreneurs should take a number of factors into consideration before following the stereotypical tech entrepreneur's journey and moving to Silicon Valley, taking on a round of financing, or going public. The problem, he says, is that far too many entrepreneurs assume that they need to move to Silicon Valley in order to attract investors, have strong ambition, and be successful.
"You're fighting for talent, you're fighting for attention, you're falling into the celebrity status mindset, and in the end, you end up being very distracted," adds Gorny.
Gorny believes that being far from what he would describe as the "distractions" of the Valley has proven pivotal for Nextiva, which now earns over $100 million in annual revenue, per the CEO. "You really avoid a lot of the noise and can focus more on the business, and you can sometimes even attract much better talent because there's less competition," he said.
Nextiva is also an outlier in the tech industry for actively avoiding outside funding, which Gorny says is key to his long-term vision. Whether a company chooses to pursue outside financing or move to the Valley is its prerogative, but a growing chorus of successful entrepreneurs are warning startups to really consider whether they're making decisions based on what's best for the company or what popular culture has led them to believe a successful tech company must look like.
Another common myth within the industry is that a tech startup's ultimate purpose is to build products versus solutions that they can take to market. Rather than building a vision around a product; however, Gorny has long advocated for building products around a vision.
"We look for gaps in the market, and consequently markets in those gaps," said Gorny.
Gorny has one thing in common with Silicon Valley entrepreneurs; he shares the Valley's often-mocked ambition to change the world, but the Polish-born entrepreneur takes a somewhat different view of the industry's most common cliché: the focus on customer satisfaction.
"As a self-funded and purpose-driven company, we have avoided the pressure of exit strategies in exchange for the pressure of being fiscally responsible, which feels right." he said. "We want to make a difference in the world as well, but not in the way every Silicon Valley company says they want to change the world. We build products to enable our customers to be the best version of themselves and, through them, we ignite change."
At the end of the day, the industry's most successful companies have commonalities beyond a zip code or a public listing or venture capital funds.