Why Your Geography Does Not Control Your Destiny

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Editor’s note: Harley Finkelstein is the Chief Platform Officer at Shopify, the Canadian-based company behind the commerce platform that lets anyone sell online and in-store. Follow Harley on Twitter @harleyf

Now more than ever, geography no longer controls your destiny in the tech world. While fashion centers around cities like Paris and New York, oil and gas around Calgary and Houston, and cars in Detroit and Tokyo, good software and hardware companies are sprouting up everywhere. The trend is so rampant that “how I built my startup outside Silicon Valley” is no longer the most relevant story.

At Shopify, we made the news last year for raising $100M in Series C funding. We did it from Canada, yet our story would’ve been similar had we been located in the UK, Israel or Brazil. When I look at how we built our business, the three essential building blocks – funding, talent, and users – are all more geographically agnostic than ever before.

 

1. Funding

The Internet has changed the venture funding landscape. Ten years ago, it was much harder to capture an investor’s attention outside of Silicon Valley. If you were looking for backers, you needed to make the rounds on Sand Hill Road and had to know the right people. Today, a startup can list themselves on AngelList and receive 25 introduction requests the next day.

Now we talk less and less about “cross-border investment.” They are all just investments. Silicon Valley’s top VCs travel all over the world for the next big ideas. Just look at China’s Alibaba, the largest tech IPO ever. At Shopify, our investors have never questioned why we want to be based in Ottawa.

What does this mean for a startup looking for funding? Stop agonizing over whether you need to move to Silicon Valley.

You will still need to connect with the right people and make regular visits to California, but money will flow to the best ideas with the best execution. Never underestimate the power of a good product and happy users; investors care far more about those two things than where you’re based.

 

2. Talent and culture

Startups around San Francisco pioneered an unprecedented fun and creative office ethos. Perks like office yoga classes, bringing your dog to work, beer on tap, and foosball tables have become de facto standards at Silicon Valley startups – but this same culture can be recreated anywhere.

We installed a two-story slide in Shopify’s head office in Ottawa. While a permit for an indoor slide may be a relatively common request in Palo Alto, it was the first time our local city council had heard of such a thing.

The globalization of the tech world demands that you get creative and look beyond your local borders to set the benchmark for the kind of company you want to be. Startups today compete on a global stage not just for customers, but for top talent as well.

You might not count Uber, Facebook or Google as your physical neighbors, but you’re still competing with them to attract the brightest developers, designers, and marketers that the world has to offer. At Shopify, 20% of our employees come from outside Ottawa and many of those are recruited internationally.

 

3. Users 

The rapid consumerization of tech has democratized the selling process. The old adage, “No one ever got fired for buying IBM” does not hold true today. Whether it’s a B2B or B2C tool, users are now evaluating solutions based on simplicity, performance, cost and elegance. Software sales are done much less face-to-face and much more online. A vendor’s location and people on the ground has become largely irrelevant.

In a sense, startups located outside of a major tech hub have an advantage when selling to a global market. There is little risk that a company or founder will become too insular or fail to engage with a diverse customer base. When you’re located in a small market, you naturally look beyond your local borders from day one.

Don’t get me wrong – we spend a lot of time connecting with our customers in person whenever we can, but we go where they are. From LA to Australia to Spain to India, we’re getting creative with conferences, competitions, retail tours and pop-up events to allow us to deeply understand what they need. While it’s easier to sell from afar, startups should never let technology replace face-to-face time altogether.

 

Geographic melting pot

As every startup is unique, I would never claim to have the right answer for every entrepreneur struggling with the decision of where to set up his or her business. However, it has never been easier to launch a product, build a customer base, and grow a business from anywhere. The tech landscape has become a geographic melting pot where the best ideas and startups survive.

Every city has its own set of advantages and disadvantages, and the key is understanding the nuances of your own location. There is no direct flight between Ottawa and San Francisco, so we have become regulars at O’Hare Airport in Chicago. While inconvenient, this is hardly an insurmountable problem. On the plus side, Ottawa temperatures drop to arctic freezing levels between November and March, making work a welcome (and warm) distraction.

While geography is no longer destiny, there is one important lesson to learn from Silicon Valley, and that is ambition. Spend less time worrying about being in the right place, and instead focus on building the right company.

Featured Image: Ed Schipul/Flickr UNDER A cc by 2.0 LICENSE