Nov 3, 2022
My #1 Advice for New Tech Entrepreneurs
Flee the suburbs
Reason 1: No one’s really solving the hard problems
Reason 2: You did the coworking thing, and still felt like a misfit
Reason 3: “Capital goes where it’s welcome, and stays where it’s well treated”
I was growing a high-tech consulting firm in the suburbs. Nothing like a quick train ride to the city, right?
But there was no train. I was 100 miles isolated from civilization. I had to fly or take a long-ass drive just to escape the everyday vista of Chuck E’ Cheeses, Sam’s Clubs, Walmarts, Targets, and McMansions.
Staging operations in a bigger city seemed obvious. But I stayed. Coworking was starting to take hold.
There was the hype of success, collaboration, and innovative thinking, so I just stuck it out in my hometown a little longer.
Finally, we would build our own tech hub full of disruptive thinkers and entrepreneurs.
It was going to be glorious.
Three coworking spaces and countless local networking events later, I burned out.
I could only describe the speed of my business growth as sluggish. It was tough relating to other entrepreneurs.
I liked most of them, and I’m still good lifelong friends with a few of them, but this “scene” felt like high school all over again:
Entrepreneurship got popular, but I just didn’t fit in with this crowd.
Some distant voice in my head nudged me to travel more, whether that’s to Washington D.C, Toronto, and as far away as Bangkok, Thailand, and it was one serendipitous thing after another.
Over time, I was able to move my office closer to Washington D.C. I will also be returning to Bangkok, Thailand to continue some exciting work there.
I wish I could say this was a perfect linear chain of events, that the TLDR version of this advice is to just go travel and network.
But for entrepreneurs solving hard problems in specific tech domains and industry verticals, scaling that sort of company from zero has unique challenges of its own.
Choosing which city to base your operations will be one of the most important decisions you can make.
Here are three reasons why you should flee the suburbs.
Reason #1. No one’s really solving the hard problems.
Are you building a breakthrough solution instead of incremental improvements? Is your offer really groundbreaking?
Going from 1 → n means doing more of what has already been done.
Going from 0 → 1 means doing something that has never been done before.
It’s something I’ve borrowed from Peter Thiel’s book “Zero to One.”
To be fair, lots of inventions and innovations are a combination of the old and the new.
And everyone wants to think they’re creating a breakthrough solution that no one’s ever thought of before.
If you were still audacious enough to answer yes, then you need to be surrounded by pioneers, early believers, enthusiasts, entrepreneurs, investors, and developers in similar or adjacent verticals.
You have to decide very quickly if the local community shares your values on innovation and invention. Tech founders need to be rooted in a true “collision economy” that contains those types of partners and collaborators.
What’s often overlooked in our own business model is the network. This is a strategic asset because you’re constantly learning, inventing, and solving problems, so you will need access to data, informational advantages, intellectual smarts, alliances, and specialized late-stage capital you can’t find in the suburbs.
In a true collision economy, creative technologists learn faster from one other by sharing their expertise. For example, robotics startups colliding with drone startups; material sciences companies and industrial design firms colliding with quantum computing enthusiasts and web3 technologists.
It seemed like only my friends and colleagues within the local university system understood that world. While my journey was a little less lonely, this still posed a problem because it was a very small tribe.
I still wrote, taught, gained experience, and built up my own philosophy and “operating system” around business, strategy, and entrepreneurship, a “body of work” that was born out of my observations and disappointments.
Luckily, this drew in the right quality connections into my orbit like C-suite officers, chair people, private equity players, and tech founders who were actively solving interesting problems around the world.
They also had money. But virtually all of them operated outside of my hometown.
These little successes opened my eyes to my circumstances and the plight that other tech founders when they quietly fled our hometown.
It either meant survival or death of the company, if they didn’t leave.
Reason #2. You did the local coworking thing but still felt like a misfit.
Here’s the theory: Coworking spaces were designed so that you could collide into new people. These acquaintances could bloom into mutually beneficial outcomes, collaborations, or just great friendships.
After my experience with three local coworking spaces, I realized many local entrepreneurs just weren’t playing in the same spaces I did.
Relationships with other tech founders will matter a lot. But when the local culture doesn’t care about similar challenges and problem sets that I did, it was going to be hard for any of us to relate beyond Macaroon Mondays and Taco Tuesdays.
Far too many “well-meaning” introductions and encounters weren’t really leading to anything no matter how much we nurtured them.
A true collision economy matters in the seamless cross-fertilization of ideas and information as we build and refine our solutions. But when there is a huge chasm in our disciplines, this is less likely to happen and tech founders end up burning lots of precious time and money.
You need to increase the odds of serendipitous, but relevant, encounters.
Serendipity means “a meaningful coincidence.” These events play a huge part in the creation of new products, services, and partnerships. These happy accidents are the prelude to those stories of luck and fortune finding us instead of the other way around.
Early in the game, I believed in all this. But I didn’t factor in the importance of the local business ecosystem.
This carefree attitude netted me people who worked in traditional, well-established industries like real estate, information technology, and marketing. Some were new companies, some were already veterans and successful in their own right.
But 99% fell hard of the engineering question. Almost zero were doing anything innovative, even in these traditional sectors.
Then somewhere in the middle, there were the freelancers, side hustlers, remote workers, business coaches, and those who ran e-commerce stores. Much respect, but this was still a miss in my book.
And then unsurprisingly, this netted me lots of “other people.” You know, people who gave off “predatory scam vibes.”
Reason #3: Because “Capital goes where it’s welcome, and stays where it’s well treated”
That was paraphrased from Walter Bigelow Wriston, former chairman and CEO of Citicorp (1967 to 1984).
Creative capital isn’t just about money, but also intellectual capital and the one infinite resource: human creativity. All which are necessary to push the limits of what’s possible in our industries and build companies of the future.
Cities will have three major advantages for you:
First, a wide pool of smarts, creativity, and unique skilled labor to tap into.
Second, because of the location of late-stage capital and how they like to work. The micro-localized way of investing is preferred because these relationships eventually become “hands-on” and “face-to-face.”
And three, because of the nature of a collision economy and how “engineered serendipity” and innovation happens. People need other people to interact and to create new ideas.
Densely clustered cities are self-forming innovation hubs for people and ideas to combine. There’s a chance for higher quality connections, resources, and chance encounters. Cutting-edge startups and multinationals will already have a presence there as it’s easier for the access and transfer of ideas, information, talent, products, services, and resources. The public infrastructure is well-developed, making it mobile for all those elements to quickly coalesce.
Nothing can replace face-to-face human camaraderie as we continually shape the future with our companies.
And besides, cash is oxygen. The bigger your moves become, then you need to find the right types of capital to accelerate your ambitions.
This is how brand-new collaborations are born. You could find your next customer, partner, or next hire. The catalyst to your 1000 true fans could begin there.
Where are all the big fish located at? Where’s a good concentration of that creative capital? Maybe that’s where you need to go because you’re not going to find that in the ’burbs.
Closing Thoughts
Should you stay or leave?
Remember:
Capital goes where it’s welcome, and stays where it’s well treated.
The world outside is bustling with life, action, and growth. When entrepreneurs can’t find the smarts, money, or even the camaraderie necessary for their creativity and ideas, the dreaded “brain drain” happens.
When you view your neural network as an important asset of your business model, you’ll see that this won’t take care of itself. Your team needs to start building a bridge out of the suburbs right away.
The local culture may claim to be supportive, but only a minority really understood that path.
Personally? I wasn’t going to be another martyr or startup failure statistic. I wasn’t going to wait for an ecosystem to evolve. Because if I fail, they won’t be there to pick up the pieces. Only me.
If my business was pronounced dead, only I will attend that funeral. No one else.
Don’t react immediately to the person selling you office space or commercial real estate. They know their business: Selling property and selling memberships.
But they don’t know your business: Invention. Solving hard problems no one else will solve, pushing past the boundaries of your field, and building a worthy neural net and tribe that cares enough to help you go farther to accomplish that.
Listen to your intuition instead. You can stay, if it’s right for you.
But if some distant voice in your mind is nudging you to shift environments, then listen carefully. Put down your macaroon (or taco) and act on it, because I think good things will happen to you.
You will get the acceleration you’ve been looking for.
I hope this helps! I would be grateful if you could at least pass this around, clap it up, or share your thoughts. 💖
