Location, location, location is a key success factor with consumer retail businesses. I argue it is a critical success factor with technology startups in Europe as well. Recently I've seen this first hand how location has impacted multiple startups. Location hits hard on multiple areas (priority depends on each situation):
- Ability to recruit. Millennials needs to be either near public transportation or short trip drives with Car2Go or other ride share options. They also require access to urban on-demand services like food delivery. Of course this means being located in larger, 'hipper; cities across Europe. So while there might be cheaper rent in the suburbs, these startups find recruiting younger talent almost impossible.
- Access to capital. Often used with Silicon Valley which has the highest concentration of venture capital on the planet. In fact, it is the same for Europe. Investors are extremely local. They much prefer 'backyard' deals whenever possible. The firms that have been successful across Europe all have deep local presence in those areas. Thus capital is highly concentrated. So where a startup is located matters. An entrepreneur is always fundraising even when they don't need money. Thus being located where the capital is means you are a quick metro ride away from updating a VC over a cup of coffee. (it works). All those entrepreneurs I've bumped into boarding planes from Frankfurt to Berlin know exactly what I mean.
- Concentration of knowledge and talent. Cities like to label themselves as 'centers' of something in order to attract businesses and talent. But the reality is, large businesses concentrate their research centers and labs around startups and capital. By default, these locations then become the 'innovation centers' for industries that explore, build, and adopt the next generation technologies and products. The best talent, the best ideas, and the willingness to fail to get it right.
Experiences shape our personal thinking. My experiences recently have confirmed that location for startups matters a lot in Europe. What has been your experience with location?