The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “How important is it for startups to be in Silicon Valley?” Is written by Stephen Lake, cofounder and CEO of Thalmic Labs.
Location matters. Globalization has clearly increased the ability for people to discover companies and job opportunities around the world, so setting roots in a location that is attractive to employees is important. My company found its home in Waterloo, Canada, a community built on strong, entrepreneurial ideals that has allowed us to accelerate our success globally.
In the early days, we were often asked if we would be moving our company to Silicon Valley at some point in the future. Since my cofounders and I are graduates of the University of Waterloo, it felt natural to stay in the Waterloo region and acquire the talent coming out of the world-leading engineering school. Doing so has allowed us to raise more than $15 million from both Canadian and American investors (angel investors and venture capitalists), and we now attract talent from New Zealand, Italy, France, and all across North America. Key members of the senior leadership team were previously at BlackBerry (BBRY), which was born out of the Waterloo Region.
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I admire the culture and energy of Silicon Valley, but I don’t believe that only one such location can exist. I think that there’s room for tech companies to push technology forward from all corners of the world. The vibe in Silicon Valley is admirable—it has this incredible culture and energy, attracting brilliant minds and venture capitalists to bring first-class technology to life. It’s an important part of tech culture and innovation, and while I’m excited to see the history that continues to be made in that amazing region, I’m also excited to see what we can learn from Silicon Valley and take to other parts of the world.
Alternative locations to Silicon Valley can be advantageous in some respects. The density of technology companies in such a small region has led to fierce competition for talented employees, driving up wages and increasing turnover. The density has also contributed to an increasing cost of living, with San Francisco recently surpassing New York as the most expensive city in America in which to rent a one-bedroom apartment. In short, while setting up shop in Silicon Valley offers many advantages, it has a challenging labor market and is one of the most expensive locations to operate a company.
The key to choosing where to set up shop for your startup is evaluating what you need for success, and finding a place that has an appropriate balance of tradeoffs that make sense for your company. For us, with a dependence on recruiting a team of highly skilled people from many different backgrounds (including hardware engineering, software, physics, and biology), the Waterloo region was a perfect fit. For you, that answer may be Silicon Valley, New York, Hong Kong, or perhaps even Florida.
Read all responses to the Entrepreneur Insider question: How important is it for startups to be in Silicon Valley?
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What Virgin Mobile’s Cofounder Wants You to Know About Silicon Valley by Amol Sarva, cofoundera of Virgin Mobile USA and developer of East of East.
The Silicon Valley Myth: Proof Your Startup Can Thrive Elsewhere by Fayez Mohamood, cofounder and CEO of Bluecore.
