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I've been at a startup that was about as far outside of the bay area as possible - North Idaho. We had a great product in a nice space and were fairly successf
by Zimahl 15y ago
I've been at a startup that was about as far outside of the bay area as possible - North Idaho. We had a great product in a nice space and were fairly successful at selling it and making modest profit.
But the start was rough. Unless it's a one-person gig (and there aren't many of those out there) you need two things - bodies and money. The further you are away from metro areas the harder it is to find both - the people with the skills either left or are already working somewhere and the investors aren't multi-millionaires, they are angels with $10-20k each, sometimes $100k+.
It's possible though. That startup eventually sold but long after a more inferior competitor sold for a lot more which had more to do with their location (Cali, I think in the valley) than how well they functioned. And the company I was with sold for less than we thought it would and long after the window in which acquisition would have been ideal.
There's just no visibility outside of major (tech hub) metro areas. You don't get any buzz even if you are in magazines and the like, and you don't have the contacts that can really help you out. It's a major negative.
Pure (somewhat educated) conjecture: if that startup would've been in Seattle or Portland it would've sold much earlier and for much more than it did, maybe in year 6 instead of year 10. If in the Bay area I think it would've sold by year 3 instead of year 10.
- mgkimsal 15y agoSounds like if the goals are acquisition and quick payouts, the place to be is SV. However, you indicated that the company in Idaho was better run or had a better product. Isn't that better for the end users in the long run? Wouldn't that indicate there's a better chance of a company staying around for the long haul and providing better service and what not? Wouldn't be surprising at all if your competitor that was acquired was absorbed or shut down within a year. For the founders - sure, that's success - they had an exit. But how is this necessarily good for the long term economics of those businesses? The original video story on this talked about all the jobs that 'high tech entrepreneurs' create. But how long do those jobs last? Sure, there's no such thing as a 30 year job for most people any more, but isn't this type of behaviour contributing or accelerating this trend?
- Zimahl 15y agoTrue, the main goal wasn't necessarily getting acquired, although typically that's what you expect to happen with a lot of tech startups. To get big we would've had to change direction (which wouldn't have been a bad idea). Whether or not we were to get acquired, it was just tough to find quality employees and the money to pay them until sales went into the black. It took about 3 years to become solvent and even then that did help luring good programmers to Idaho.