Depending on who is reading this — you may be a local economic development officer in search of startups that exhibit the healthy signs of “staying power”. Or you may be a tech startup founder comparing various incentives offered by cities and regions as you try to decide where to locate your business.
Itinerant vs location-focused startups
A location-agnostic — or itinerant — startup cares more about the product or service itself and less about where they set up shop. A location-focused startup team prioritizes long-term, well-paying employment in a specific community, neighborhood, city or region. Their staying power is higher, for certain.
Think of software-as-a-service startups. They could be based in a big city or a small town, it doesn’t really matter as long as they’ve got the right team.
On the other hand, location-focused startups really want to make a difference in their community of choice. Think of a tech company focused on training local people for well-paying, technology-disruption-proof jobs.
The case of Opportunity Zones in the United States
Among the 8,700+ opportunity zones across the United States — e.g. South Carolina has 135 such census tracts with lower average-income levels — many are situated in sparsely populated, remote locations, by default, of little interest to location-agnostic entrepreneurs.
Alright, so let’s talk about the staying power of these location-focused tech startups. There are a few things that make them really strong. First, they know or seek to know their community of focus inside and out.
Because they’re part of the community, local customers and economic development agencies are more likely to support them. There’s a sense of loyalty that’s hard to build when you’re just another faceless corporation.
People want to work for companies that care about their community, and location-focused startups have that advantage. With more paychecks spent locally, a location-focused startup would ideally have most of their products or services outside their region.
Berkshire Hathaway, a global conglomerate with high level of staying power in Omaha, Nebraska
Even though they’re a huge company, Berkshire Hathaway have definitely got strong ties to Omaha, Nebraska.
For starters, having their headquarters in Omaha creates jobs and boosts the local economy. But it goes beyond that – Berkshire Hathaway’s reputation for success rubs off on the whole city. It makes Omaha seem like a place where smart businesses can thrive. That attracts other companies and talent to the area.
Lower costs, a good quality of life, and a solid Midwestern work ethic made it attractive. As for the startup scene, having Berkshire Hathaway in Omaha put the city on the map for business. It shows that big-time success was possible outside of traditional tech hubs like Silicon Valley or Research Triangle Park. Giving startup founders some serious local role models inspired more people to start their own companies in Nebraska.
Whether you are building a location-agnostic or a non-itinerant startup, it takes a village at the beginning. Contact us today for a bunch of personalized solutions to make your entrepreneurial journey smoother and, frankly, more fun with, for instance, 5,000 Cities masterminds.
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