Our Startup Would Probably Die If We Were In San Francisco
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Re: Our Startup Would Probably Die If We Were In San Francisco
#2Staying somewhere cheap gives you a tangible advantage but also puts you at several intangible disadvantages. At my first startup in the UK, we decided to base out of Birmingham instead of London, which reduced our living expenses by 70% and allowed us to really stretch our seed funding. But we ended up having to commute to London frequently for important meetings. Also, one could argue that we might have accomplished more in less time had we had continuous access to expertise and contacts at scale. Eager to hear other thoughts and experiences.
Re: Our Startup Would Probably Die If We Were In San Francisco
#3I've thought a lot about this and I feel like it makes sense pre-seed to do this. Save the cash, invest it in the business, and then when you raise money move to San Francisco/Bay Area. It's really tough to grow outside of SF, I feel like. But if you're bootstrapping yourself... Then I can't see many reasons to come to SF.
Re: Our Startup Would Probably Die If We Were In San Francisco
#4Staying somewhere cheap gives you a tangible advantage but also puts you at several intangible disadvantages. At my first startup in the UK, we decided to base out of Birmingham instead of London, which reduced our living expenses by 70% and allowed us to really stretch our seed funding. But we ended up having to commute to London frequently for important meetings. Also, one could argue that we might have accomplishe…
Well, that is naturally going to depend on the balance of work you need to do. If you have 12 months of nose-to-the-grindstone product development ahead of you, social connections are of less value. But if you are still spec'ing your product, or doing testing in focus groups, or other such things you'll benefit from those readily available connections...
Maybe I'm dreaming of having a large lab in the countryside, and a tiny office in the city.
Re: Our Startup Would Probably Die If We Were In San Francisco
#5It'd be interesting to see the OP's thoughts on how things would be different if he hadn't started in San Francisco? It may be expensive to live there, but it may be easier to network enough to get the contacts/experience/buzz you need to get seen, compared to starting in St. Louis.
Re: Our Startup Would Probably Die If We Were In San Francisco
#6I've thought a lot about this and I feel like it makes sense pre-seed to do this. Save the cash, invest it in the business, and then when you raise money move to San Francisco/Bay Area. It's really tough to grow outside of SF, I feel like. But if you're bootstrapping yourself... Then I can't see many reasons to come to SF.
Agreed, San Francisco is probably the worst place to be if you want to bootstrap.
Re: Our Startup Would Probably Die If We Were In San Francisco
#7I've known a few businesses who "HQ" out of a big city, but usually just with a small sales office. Then they hire almost all of the rest of their staff in very cheap, but talent filled areas.
One mistake I've seen over and over again, don't hire your customer facing staff in those cheaper areas. You really want sales staff/etc. To be in the same area as your customer base
Re: Our Startup Would Probably Die If We Were In San Francisco
#8Counterfactuals are very hard to know. At CircleCI, being in SF gave numerous advantages early on. We had multiple paying customers in the first two office buildings. We had multiple customers within walking distance, and many more within cycling distance. Being able to talk to real customers using the app was extremely valuable.
Customers aside, there are tons of people willing to help, either through advice or introductions. There's an entire ecosystem who understand startups, and have been there.
My failed started before that was in Austin, Tx, and the startup density just wasn't there at the time (2009).
Not every developer in SF is as mercenary as you make it sound. For your first employee hire, you might find a single person living in an apartment in SF vs. a family man in St. Louis who has to pay for day care and save for college. Their salary requirements might be comparable. [Edit: my point here is not to say that SF people are only single, and STL people only have kids, but that salaries are a distribution, and that there are places where the SF and STL distributions overlap, based on the individual's experience, desires and stage in their life.]
Re: Our Startup Would Probably Die If We Were In San Francisco
#9There's also the fact that California is regularly at the bottom of rankings of "business friendly" states. I'd rather locate my business in a state that wants me there.
Re: Our Startup Would Probably Die If We Were In San Francisco
#10The problem is that the massively funded SF/SV start-ups will create the "scorched earth" regime for the bootstrapped ones: try moving to St. Louis and compete with a AirBnB from there?
If you get traction, you will have to get VC money, which means moving back to SF or NY.