Loyalty vs. Location: Why Startup Founders Should Stay Put

Your
 city needs you more than you realize. Before buying into the myth that you need
 to “upgrade” to a hub city, take stock of 
what really counts.

Pat Riley CEO Global Accelerator Network
Pat Riley, CEO of the Global Accelerator Network; Source: Courtesy Photo

See 
that lush, emerald green grass blanketing your neighbor’s yard? It isn’t an accident.

Their lawn got that way from serious cultivation, watering and attention. If your yard looks like a dump by comparison, that doesn’t mean 
you should move. Instead, maybe it’s time to break out the fertilizer and 
gardening tools.

In the same way, too 
many startup founders are distracted by the lush promises 
of greener pastures. In the startup world, no destination is more alluring than
 the Bay Area. Combined, San Francisco and Silicon Valley attract nearly 40 percent of the nation’s venture
 capital activity.

As soon as a startup hits the
 magic number of 20 employees, entrepreneurs inevitably get wandering eyes for
 big cities such as San Francisco, New York, and Chicago. They consider ditching
 the modest communities that helped them get their start. In essence they desire to follow in the 
footsteps of Facebook.

Interestingly, Facebook CEO Mark Zuckerberg said in retrospect that he 
would have stayed in Boston, in lieu of the choice he made to move to the West Coast.

Guess what? The promise of metropolitan startup success is mostly a mirage. Instead 
of adding fuel to the mass exodus fire, make a difference in your own community
 by thinking locally.

 

Dance
 with the partner you brought

Remember 
when you first launched your business? You probably begged and borrowed to drum 
up the necessary cash, likely turning to investors and customers in your own 
backyard.

 

Considering business relocation
Photo: © prostooleh, YFS Magazine

What about all of the mentors and advisors who helped you get started? They
probably aren’t going to come with you. Meanwhile, moving across the country makes it difficult to grab a coffee and get their advice. You can 
certainly find new mentors, but that’s not a quick or easy process.

Want another reason to remain in your neighborhood? Look at your rent. A workspace in Kansas City rents for about $800 monthly, while a
comparable Bay Area lease will set you back nearly $3,000 a month. Why waste 
money when you can have a longer runway to get your business off the ground?

Considering 
how many startups fail, why not do everything you can to give your company a 
fighting chance? Staying in the city that nurtured your company from a
fledgling idea to a growing enterprise makes a lot of sense.

 

Put your money where your roots are

Want
 to genuinely transform your community? Provide jobs that fit people’s skills
and backgrounds. If we’re going to have thriving cities where people are
 employed, paying taxes, and raising families, real job growth won’t come from
large corporations that have been around forever. It will come from startups.

 

Business relocation
Photo: © bernardbodo, YFS Magazine

A
 colleague of mine recently visited a West Virginia community that was once a
top coal-mining town. It’s now a city where nearly a quarter of the workforce
 is unemployed. These people are desperate for jobs. As startup businesses
 account for nearly all net new job creation in the U.S., a startup
 could completely revitalize the area.

While 
this West Virginia town is simply one example, there are plenty of other areas 
that were left behind as industries and business practices evolved. By encouraging startups to invest in smaller towns throughout the country, these 
communities can climb out of the abyss and once again take care of their
 residents.

 

Bountiful benefits of staying put

Cities
 need startups that begin, grow, and stay at home to promote economic and social
 prosperity. You’re free to leave, but staying put brings significant
 advantages:

 

  1. Feed families

    Nothing is as humanizing as hiring someone who
 has been out of work. This simple act, literally, gives people a purpose and a way to feed their families. Their talents will help grow your company. The result is an incredible impact on the whole community. Happy people with
 purpose build great cities.

  2.  

  3. Create a sticky
 culture

    Employees stick around when they like their 
bosses, co-workers, and company culture. If 
you haven’t built a company where people enjoy working, you won’t retain 
employees for long. By staying where you started, you’ll avoid the
 uncomfortable situation of asking your employees to follow you across the
 country. Happy workers are loyal workers.

  4.  

  5. Avoid moving
 costs

    Think about the last time you moved. Not exactly
 a bundle of laughs, right? Quite a few entrepreneurs who moved to bigger cities
 would say it wasn’t worth it. You’ll often hear them say they could have
 been just as successful if they had stayed put. For example, Iowa-based FinTech startup Dwolla started in Des
Moines but moved most of its employees to San Francisco a few years ago. Fast forward a bit, and the company recently
 brought everyone back to Des Moines.

  6.  

  7. See (and
 revitalize) the forest

    Why focus on the trees when you could have a better view of the forest? If you want your startup to last and your city to thrive, you 
need to take a 30,000-foot view. Develop a vision for the next 20 years, which 
is about how long it takes to build a thriving ecosystem of startups, 
investors, mentors, and customers. You can transform your city by staying put 
and investing locally.

  8.  

  9. Stay relevant

    If you are building a startup in a 
smaller town, you’re probably kind of a big deal. Move to a big city and see how you
 compare to thousands of other startups competing for the 
same advisors, investors, resources, and 
talent. Suddenly, you’re not quite as special. Startup success partially relies on the ecosystem. When you change cities you have to tweak your support
 partners.

  10.  

 

Your
 city needs you more than you realize. Before buying into the myth that you need
 to “upgrade” to a hub city to build momentum and boost revenue, take stock of 
what really counts. Plant roots and help grow a thriving ecosystem capable of
making any big city startup green with envy.

 

This article has been edited.

Pat Riley is the CEO of the Global Accelerator Network, a group of respected startups and the organizations that support them from around the world. More than 5,500 startups are in GAN, and many grew through one of its startup accelerator programs. Startups in GAN get access to its partner network and venture fund, which provides capital for startups to create and grow their businesses. For more information, visit gan.co. Connect with @rileypat on Twitter.

 

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