Where Should You Setup Your New Startup?
Well, choosing a place to setup your new startup can be as important as your startup itself. India being a huge country provides different options for setting up a startup. Above all the other cities, I’d say Bangalore, being a technology hub has an upper hand and is the closest match to the Silicon Valley in the US. Around 6 months ago I left the small yet promising city of Bhubaneswar and moved to the more happening “tech-hub”, Bangalore. I must say being in the tech-hub has loads of advantages but at the same time, it is not a necessity is what I feel.
When it comes to choosing a location for a startup, many entrepreneurs head for Bangalore, the Silicon Valley of India or other tech hubs across the country. Oftentimes this happens because of the perception that a high-tech startup must be located in a traditional urban “high tech hub” in order to be considered legitimate. However, remaining in your original hometown may actually be a better practice for business success, according to a recent study from the Yale School of Management. The study, from Olav Sorenson and Michael Dahl, suggests that startups that remain within their founders’ home region are more likely to earn higher profits and survive longer than companies that relocate.
Running a business is not entirely dependent on your location, after all the Internet is making the world a global village. So, even though we stay local, we need to think global and act accordingly. Of course, challenges will exist but that won’t undermine the benefits of being local.
One can immediately notice the following advantages of doing a startup in your home city:
1. Incredible reduction in expenses.
If you are starting out at your home city, you most definitely have a house. Compared to Bangalore or any other tech-hub, this benefit itself will save you at least 10K a month. Moreover, if you can stay with your family in the initial startup days, you’ll have less to worry about the three essential things – ROTI, KAPDA & MAKAAN.
2. Loads of Jugaad!
Whether you like it or not, most Indian startups, in fact, most of India runs on “Jugaad”. If you are in your home city, this comes as a huge bonus.
Lots of Jugaad = Increased Potential in Setting Up a Successful Business.
3. Emotional Support
Starting a business is not an easy task. It takes a lot of courage, passion, determination and a lot more. Not everyone dares to leave their cushy jobs or job offers and do a startup. The difficult days can be very depressing and staying home can help you cope up with that, subject to conditions that your family supports you in your venture. Else, it will just add to the pain. If you have friends around, it’s a major plus-point.
Along with these benefits of staying local, there will also be many challenges like lack of sufficient technology, quality of local talent, pressure to perform considering most people know you, etc. But these hurdles can be jumped over.
Some of these tips might help:
1. First of all, Feel at Home
Building a successful startup is a process that includes more than just one innovative idea. There are numerous occasions in an entrepreneur’s life which demand creativity. Find your space for such occasions. It is your home city, you have spent years there. You might be having a favorite coffee shop or a favorite park or any such place that tickles the creative nerves in your brain. Find it and use it!
2. Utilize Jugaad to full potential
One of the best ways to raise the initial capital necessary for early growth is to access networks that you already know: family, friends, and colleagues. If they can’t provide the support themselves, they would still be the most likely to provide the connections to someone who can. Additionally, because you’re looking to build a local business and employ local people, see if your state government has any programs, tax breaks, or other support to assist growing startups.
And remember, the key is to develop a strong product. Once you’ve accomplished this, there aren’t many things that will keep investors away, certainly not distance.
3. Stay Connected
Just because you’re physically separated from major tech centers doesn’t mean that your communication with them has to be affected. It is crucial to develop necessary tech infrastructure to ensure effective communication. Facility for conference calls, VOIP, backup Internet connection, etc. are all very important.
4. Make the best use of the local talent
One of the biggest challenges for small startups in major hubs is finding talented employees willing to shun the money and prestige of the major tech firms for the unstable, risk/reward offer of a startup. By remaining in a smaller market initially, you can be a big fish in the small pond rather than being a small fish in a big pond.
Visit your univeristy and other colleges and tap their potential.
5. Be Global
Even though your business is based in your hometown doesn’t mean you should be there all the time. Instead, it is important that you take advantage of the joys of modern transportation. Whether it’s to meet with investors, participate in a trade-show, or embark on a media tour, you need to be prepared to take the necessary business trip. To save money, take advantage of conferences as excellent opportunities to meet with a range of prospective clients, investors, and other industry players. Attending even one or two key conferences a year can provide the business leads and connections that will help you build your business.
Stay local, but act global!