You have decided you're going to start your business--but it's so small, it could start anywhere. After all, it only needs 3 square feet in your spare bedroom. Does the location of your startup really matter? For services businesses such as florists, home services companies, and the like, it may not matter so much. But for tech and product companies, the answer is a resounding "Yes!"
How do you decide? Start by imagining your business in 10 years. Think about the resources you'll need to thrive in order to select the best startup ecosystem for you.
1. Bandwidth Behemoth? Pick for Fiber.
Bandwidth is a defining issue for the U.S. in the next few years. Rural locations could become "second economies" if they don't enjoy the same access to tech infrastructure and information as cities do.
Is connectivity and bandwidth critical for your startup?
If your company will rely on big data or is video intensive, consider a "Gig Internet" city like Chattanooga, Tennessee, or pick among the Google Fiber cities like Provo, Utah or Austin--and soon, Atlanta; Charlotte or Raleigh, North Carolina; and Nashville.
2. Traditional Trade? Choose Port Cultures.
Serial tech entrepreneur Jared Heyman left his hometown of Atlanta, where he founded and scaled the online survey company Infosurv, to start his next company, CrowdMed, in Silicon Valley.
"We have a bold mission, so I knew I'd need funding, and felt the Bay Area would be the right environment," he says. Jared's move to the West Coast was the right decision. CrowdMed has received $2.4 million in angel and venture capital funding.
If your startup is like CrowdMed--seeking a large user base, wanting every opportunity to scale, and needing an investment environment that isn't risk adverse--you might consider a move to Silicon Valley, New York, or Boston.
These areas have a well-deserved reputation for startup investment.
But why? In 1869, the First Transcontinental Railroad opened between New York and San Francisco. This new East-West route reduced what used to take six months of travel down to six days. Railroad travel tripled until 1880, then doubled by 1920, creating fortunes around the endpoints of San Francisco and New York.
These fortunes resided in the starched pockets of industrial barons like the Rockefellers and Vanderbilts, who in turn endowed institutions of higher education.
The Railroad Age is the foundation of today's "first wave" startup ecosystem, and a willingness to take risks still exists in New York and Silicon Valley. Types of businesses that thrive in these systems are large-scale consumer product, trade, or finance oriented.
3. Next Generation B2B, Agriculture, or Sciences? Head South.
Finding a city with a specific industry focus, such as manufacturing or health care, can be a critical issue when picking the right ecosystem for your startup.
"We started in Silicon Valley and moved to Atlanta last year to grow NexDefense," says Derek Harp, a serial tech entrepreneur. "We really started to scale once we got into this ecosystem."
He credits both the deep pool of cyber-security talent in Atlanta--as evidenced by successes such as ISS and now companies including Airwatch, Damballah, Ionic Security, and Pindrop--as well as support from Georgia Tech for building the tech-security infrastructure that supports the scaling of companies like NexDefense.
The company closed a $2.6 million round of funding and is located in the Atlanta Tech Village.
4. Focusing on a Niche? Find Common Ground.
Launch Tennessee is an innovative public-private partnership partially backed by the State of Tennessee that manages the state's entrepreneurial endeavors, including its network of nine accelerators.
"We purposely have accelerators throughout Tennessee that focus on industry niches," says Courtney Corlew, communications director at Launch Tennessee. "Our network and accelerators help us connect early-stage companies to strategic capital and infrastructure not only in Tennessee but throughout the Southeast and across the country."
"The collective learning and access to other highly investable early-stage tech companies and investors that Launch Tennessee affords contribute directly to our growth," says Patrick Hunt, CEO of Fiveworx. His Knoxville, Tennessee, firm makes a business intelligence platform for utility energy efficiency programs and recently closed an investment deal with Angel Capital Group.
Not sure? Go visit.
One of the fun parts of provisioning your startup is deciding which city it should "go to school" in. If you're not sure where you should be located, one of the easiest ways to get clarity is to attend some of the regional entrepreneurship conferences created by the regions themselves.
Do your research--and locate your startup in a culture that's attracting success in your industry or focus. Critical mass matters. Being with other companies like yours in a purpose-built ecosystem with specific access to the right clients, employees, infrastructure, and higher education options will contribute substantially to your startup's success.