It is vital to have non-capital resources like workspace, proximity and college, as well as networking opportunities.
Most startups fail, as you’ve likely heard it before. According to estimates, at least 70% of tech startups will fail.
Startups are investing a lot of capital. Why are these companies not seeing an increase in success rates when there is so much money? Perhaps money is not the problem.
When deciding where to locate their business, startups must take into account many other factors. The right location can make all the difference in whether you grow up.
These are five things you should keep in mind before starting your own business.
Startups may find that talent is the most valuable non-monetary resource, regardless of stage. The location of your startup will also determine whether you can find the talent needed to grow your business.
Even if you have the most brilliant idea in the world it doesn’t mean that you are the only one. A founder may have a unique product or a brilliant idea, but that doesn’t necessarily mean they are able to build a solid business model, create a winning proposal or grow a company.
Access to skilled talent is key to the ability of innovative companies to grow. They need entrepreneurs who can turn an idea into a company. They must find lots of talent. Where are you going to find engineers that understand your product and can support it? Startups can succeed if there is a talent pool and leadership that makes a commitment to growing that talent pool.
Each location is a good place to start a company. It has an ecosystem that encourages social capital and allows startups thrive.
Innovation is about relationships and the development of shared ideas. This can be achieved through networking events and meetings. Founding founders can meet like-minded people, share their stories, and connect with potential mentors. The best talent can bring their own networks and, as the ecosystem grows, they can use it as a mentor or as a board member to generate business flow.
Startups must look at cities and regions with a strong foundation to foster meaningful relationships in order to gain access to these ecosystems.
The interaction between businesses, higher education research institutes and the entrepreneurial community is one of the key characteristics that distinguishes cities/states with high levels business activity.
If you are looking for a place to work, then look for areas where universities in your area create, support and partner with companies within your industry.
Because it is nearly impossible to create it, startups must be created in a location where they can thrive.
It can be difficult to create an environment locally or attract specialists in your field. Instead, look for a place that is already successful.
You need to find the talent, engineers, and resources that are already in place if you want to be able to solve your problems.
What if startups didn’t need to spend large sums of money on offices?
Simply having a place where you can work is an essential resource. It either propels startups forward or makes them fall behind in their debt. According to The Economist the cost of Silicon Valley property ownership is driving many startups away.
Now, startups have more options for locations and can find affordable offices or even free of charge. Incubators and accelerators offer mentorship and space in exchange for equity. In order to attract entrepreneurs, policy makers from various states and cities are offering affordable space for offices, laboratories, and factories.
Startups looking to establish themselves in a city with lower costs of ownership can find it a huge advantage.
While money can solve many problems it shouldn’t be the only factor in deciding where to start your business. You risk losing non-monetary resources that are the backbone of many startups’ success.