Does It Really Matter Where You Build Your Startup?

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Does It Really Matter Where You Build Your Startup?

You hear it all the time “It doesn’t matter where you build your startup”, or “If you don’t build your startup in Silicon Valley, you don’t want to win bad enough”.

Arguably, if you know what you want to build, you can base your startup anywhere. You could just take your laptop, sit down in your bedroom, shut the door, and build your product. Done. Seems straightforward. But there are good reasons to go somewhere else.


The most celebrated startup homeland is San Francisco, of course. Three reasons: better access to investments/funds, early adopter community, startup flow. However, if you get there without your beta ready, you will not benefit from the investors and early adopters since you have nothing to offer them. So the flow… Again, even if you go to a lot of events and meet the best people – you still won’t be able to show them your beta. So why come to San Francisco? Perhaps, a different perspective? Inspiration? Fair enough. But it will cost a lot. San Francisco’s 1-bedroom apartments are around $2,000 per month. Monthly cost of living is at least $3,000. And while you’re paying those $3,000 you’re still sitting in your apartment and, hopefully, building the beta. And if you’re not, you really should be. So, to stretch your budget for 3 months you need roughly $10,000. Now maybe you want to look for other places to build your product?

Before you start looking, however, here are 5 things to consider:

 Funding (including investments, loans and government grants)

Startups can work for years before they earn profits. That’s why so many rely on funding. Without funding startups can hardly develop products and services that will eventually bring them profit.

 Educated workforce

Tech startups rely on educated workforce that understands how to develop new ideas and follow complex directions.

 Low cost of living

Low cost of living often means that startup pays less for an office, tech lab or any other commercial property. In many cases, it also means that companies can pay employees less without affecting their quality of life.

 Economic health

Startups need the stability of a healthy economy. Without economic stability, there are too many uncertainties that can force startups to take fewer risks and make slower progress.

 Low corporate taxes

Low corporate taxes let successful startups invest more money into researching and developing new ideas instead of paying the government.

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