Does Startup Location Matter?

by todd vernon

Location with a capital L matters. Anyone who has started a tech company in Colorado will likely tell you that in some ways you will be handicapped a bit by your location. Of course there are advantages to starting something in Colorado, Boulder specifically, but I think anyone who would say it's no different is kidding themselves. Sometimes it's just better to be where the action is and the action is in the Valley.

I had a meeting a few weeks back that got me thinking about location with a small L however. I was visiting a startup whose office was in a neighboring community in a light industrial park. I have several friends who match that description so if you're reading this, you have a startup in a remote industrial park, and you know me - I'm probably NOT talking about you, so don't get bent out of shape.

When I walked into the startups office it was like a morgue. No energy, no light, no excitement, no phone calls, no screaming, no coffee shops, nothing, nothing outside, 90 degree pavement in every direction, someone welding in the "office" next door. I had a nice meeting and when I left I had that shiver you get when you drive through an intersection in your car – look in the rear view mirror and see the horrible twisted carnage of a 3 car collision that you "almost "participated in. The smell of death was in the air and I hated it. The company is dying, they are all alone, and they are on the virtual moon by themselves.

All this got me thinking. Where should your startup be located? I used to be a huge advocate of the cheap office space off in the middle of nowhere. I mean it made sense, you have to be scrappy, don't spend money on the location spend money on the people –right?

When Lijit moved to Boulder over a year ago, it was hard to rationalize (for me). The office space was more expensive, a lot more distractions in town, the parking is expensive. Why would you do that? Now after another year of Lijit under my belt and exposure to Boulder I get it and would never go back to remote model. What changed?

Moving to Boulder has been the best cultural thing we ever did. We are constantly surrounded by smart successful people, with smart successful business that we can and do leverage everyday. These relationships depend on our ability to "capture" these moments a little at a time. Meetings where interactions become scheduled events destroy the entire effect. Today alone I talked with a Lijit board member in the coffee shop, ate lunch with a successful entrepreneur from the Foundry Group offices, talked with one of my investors in the street by the office, and met with the founder of an interactive ad agency and never got in my car. In fact, none of those were planned meetings.

My conclusion is that the closer you can get to smart people, the more likely some of it will rub off on your company, your staff, and yourself.