Perhaps one of the most interesting aspects of the interviews we have conducted with founders is their approach to the simple question of where to set up in the US.
Many of our founders for whom confidence, determination, grit and gut-feel are key skills (e.g. Christian Laang of Tradeshift, Jonathan Gale of NewVoiceMedia) said that despite all the complexity of Silicon Valley – insane talent costs, eye-watering living expenses, intense competition etc – there really was zero choice; and they stand by their decisions to this day.
Other contributors who are led more by metrics and careful assessment (e.g. Matthew Bruun of Brightpearl) are more measured – indeed Matthew architected Brightpearl’s move away from San Francisco to Austin, Texas.
If there is a trade-off between access to customers and access to talent, choose talent
Everyone in the US flies, it’s just expensive (and unpleasant) so get used to it
You can’t beat the Valley as a location, but you also can’t win the talent war there
Don’t underestimate the power of being close to your network
Time zones are important in the early days of having two offices
Find a well-connected space to land – you’ll extend your network and have like-minded folks to talk to
Don’t open a complex network of branches – fragmentation is your enemy
The location of customers is clearly important; but many of our founders pointed out that everyone in the US is prepared to fly to meetings, so that mitigates the location challenge to a degree.
More important – although nobody admits it – is the fact that American cities are like universities. San Francisco and New York have the credibility of Harvard and Yale.
Seattle and Austin are like MIT and Princeton, and so the list continues – perception is the important factor. Setting up in the Valley automatically confers credibility – at a price.
The other key considerations are:
• Talent: can you get good people at the right price, and if not, are people prepared to move?
• Network: the best argument for the Valley is that ‘even your next door neighbour is pretty much bound to be working in tech’
• Time zones: the US is five to eight hours behind the UK, and particularly during the transition period when you’re juggling two offices, the difference in those three hours (both operationally and for the wellbeing of stressed founders) can be huge.
You can, of course, begin with short-term offices: they’re cheap today, and (especially folks like WeWork and RocketSpace) also mean access to a ready-made network of similarly ambitious businesses and entrepreneurs.
Don’t expand beyond two offices.
Many of our founders mentioned the importance of bringing the US and home teams together at least every six months for a social/business/alignment meet-up, even though it’s extremely expensive; because fragmentation is a costly enemy.
To attract great people, they need to feel that they are going to work in a strategic part of the business, where decisions matter and influence resides; and any dilution by opening branch offices spoils that intensity.
You may save a few pennies on office rent, but the cost in motivation, coherence, critical mass and collaboration is incalculable.
To finish with, a few pearls of wisdom from Notion experts:
Don’t create islands of people. You simply create unnecessary complexity. Minimise the number of locations, and create just two hubs if possible. Nikos Moraitakis, Chief Executive Officer, Workable
Base yourself on access to leadership, talent, access to partnerships, and early-stage customers not long-term customers. Overpriced as it is, the Bay area is still the place to be. Christian Lanng, Chief Executive Officer, Tradeshift
Austin is like Seattle: it’s a very tech and entrepreneur-friendly place without being New York or San Francisco. By moving there, we weren’t doing anything radical, but we also weren’t just being a follower. I’d say we were an ‘early stage follower’. Matthew Bruun, Chief Revenue Officer, Brightpearl
Crossing the Atlantic