In the past year, largely due to the pandemic, it’s been easier than ever to create a business from anywhere in the world. Zoom for calls and meetings. Slack for asynchronous communication. Upwork for gigs. Stripe Atlas for starting a business. Notion for knowledge hubs. As long as you have a stable connection to the internet, geography no longer matters.
Additionally, major US startup hubs (i.e. SF Bay Area, NYC, Seattle, etc.) exhibit a lot of noise, and it becomes harder to discern the the signal among the noise. In the past few years, there’s been an influx of talent from across the world into these hubs. Despite the diversity of backgrounds into this 7 million strong hub, most tech entrepreneurs are stuck in the same modality of thinking. When you’re surrounded by similar personalities who gravitate towards the models that have succeeded already, you’re only going to get more of the same. It’s part of the reason why even seasoned founders with exits under their belt, still go back to startup accelerators, incubators and fellowships. They’re looking for fresh ideas not just on product, but also on business models and culture and more, that fresh blood into the industry brings.
These hubs are bubbles for a reason. I only feel qualified enough to speak on the Bay Area, where I call home now. One of Silicon Valley’s claims to fame is that we’re in a bubble, and we know we’re in a bubble. Because of that, many of the best startup founders know that their initial beachhead – their beta audience – is not here, unless your customers are tech companies, tech meetups, or coffee connoisseurs.
In venture, there have traditionally been three considerations when deciding your geographical playing field:
- Move to where your customers are
- Move to where your talent is
- And, move to where your capital is
And in that priority. Customers > talent > capital. I work in an ecosystem that has long perpetuated talent = capital > customers. One of the best lessons from the pandemic is that the “talent = capital > customers” function isn’t necessarily true, and that it was a product of the noise – the FOMO – that exists in the Bay. Equally so, talent in the Bay, as well as other major tech hubs, are incredibly expensive. While there’s a theme of “talent is on a discount” during COVID, it is still wildly more expensive than other parts of the world. Not only talent, but also real estate, social and professional networks, capital (yes getting money is more expensive), and the market for attention (more on that, here and here). And arguably, the same quality in many other lesser known geographic regions.
While I’m not saying every entrepreneur that has moved their HQ has gone to where their customers are, the remote work lifestyle has set precedent for many companies to rethink what they thought they knew and what they now know. With robust remote tools, like Zoom and Slack, I believe we’ll continue to challenge our understanding of what normal is. And when most companies resume a hybrid model post-COVID, I’m curious as to the emergence of new talent hubs (or maybe the lack thereof) across the world.
*Elaborated off of an answer I wrote on Quora.
Cover photo by Rezaul Karim on Unsplash
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