Regions such as Silicon Valley are well-known for all they can offer tech startups, but it may not be necessary for entrepreneurs to relocate in order to start a successful business. Business owners located in the middle of the country don't need to move to a coast for their companies to have a chance to grow.
Staying put to start a company doesn't just help noncoastal entrepreneurs stay close to home -- it also makes financial sense. Silicon Valley is known for its outrageous rent and real estate prices. In 2015, the median cost of a single-family home was measured at $1.05 million. While developers are paid an average of $112,000 annually, housing is still too expensive for most of the employees tech startups seek to hire.
New York City is equally pricey. That same year, the median price of a home was $410,400, and the estimated necessary income for a single individual living in the city was $43,519 -- and that's just the amount required to cover a person's basic needs.
Midcontinent states, on the other hand, have plenty of affordable real estate, and the region is experiencing a major wave of investment. In fact, this part of the U.S. hosts numerous Fortune 500 companies, including Walmart, Berkshire Hathaway, UnitedHealth, General Motors, and Ford Motor Company.
These large companies aren't putting their faith in the region for no reason. Startups have plenty to learn. Here are four ways startups can gain the same benefits in Middle America:
1. Focus your scope.
As capital and resources become increasingly limited, it's more important than ever for entrepreneurs to center on a single core value proposition. Henrik Werdelin, creator of BarkBox, suggests building a minimum viable product within 100 days to stay focused.
He also notes that maintaining a strict development schedule is crucial to the process. "Innovation doesn't come from good ideas and a refusal to let bad products fail. It requires a structured approach with strict timetables and budgets," Werdelin says. "Wasting 18 months trying to force the issue will only put your business at risk."
2. Source capital locally.
Don't look to the coasts for funding. Instead, search for investors with experience working in the region -- investors who know and understand it. Adrian Fortino, venture capitalist and partner at the Midcontinent firm Mercury Fund, says that "for the Midwest to build nationally credible and sustainable startup communities, we need the patience and interest from founders and investors to build the larger exits that spin off hundreds of angel investors and entrepreneurs."
He adds, "Given the added Midwestern benefit of a much lower cost of living...versus the coasts, a $500,000 payout becomes a truly meaningful amount of money. You can make a substantial change to your life in Detroit or St. Louis with half a million in the bank. That's not nearly the same case in San Francisco or NYC."
3. Recruit employees from different locations.
The internet's growth has made the idea of a home office with in-house employees almost obsolete. It's become increasingly common for companies to hire employees across the country who work from their homes.
Freelancing companies can be major assets for entrepreneurs seeking to hire top-tier full-time and freelance creative talent without having to rely on the smaller talent pools that may be present in some Midcontinent cities.
4. Take no chances with the website.
Regardless of a company's location, its online presence is the key touchpoint for customers to connect. Ensuring a positive and intuitive user experience with the company's digital face is vital for an entrepreneur.
Squarespace is one affordable option for business owners looking to get a site up and running independently. Entrepreneurs must take extra steps, however, to ensure the full brand story is woven into both the design and the copy on the site so visitors understand the core mission of the company.
While Silicon Valley may be the most well-known home to tech startups, it may not hold the entrepreneurial crown for much longer. The Midwest and other regions have plenty to offer, starting with their financial benefits. Follow these steps to found a SaaS startup that plants its roots where its founder's are.