The holodeck - make the location irrelevant
The most common piece of advice you will get as a startup founder is to make sure you choose the right location for your startup. Reid Hoffman explained his point of view on this topic in this class at Stanford. Most of the investors and successful startup founders will tell you the same thing. The choice of location is important because great founders should seek the networks that will be essential to their problems.
I know many founders who have this dilemma, where to locate my company. But is the location the only way to seek support from your network?
During the last 6 years, I did a lot of experiments, living in different cities for a couple of months to understand if the location can help me find my network. From all of these experiences, I realized that the importance of the location is increasingly less significant. Also during my experiences, I realized how important it is to shift from a geographical view of the world to a new tribal view.
Willing to test my hypothesis, I was searching for a new perspective and found this research, by Jeffrey Heer and Danah Boyd. They designed the map of the world, that counted not the geographical distance, but the distance between 2 people in a social network. What is important, in this case, is not the distance between two people, but the number of degrees of separation between two nodes in your social network. Let’s call this the tribal perspective.
I want to give you two examples from my previous businesses to explain how important these perspectives were for my business. In one case, I failed big time, in another one, I succeed contrary to all the feedback received.
15 years ago we built one of the first mobile platforms in the world. Imagine having email on your Nokia 8110, using WAP technologies. We had thousands of customers from all over the world, but we had few from Romania. At that time, my view was totally geographically based, and because I didn’t have customers from the main market, Romania, I decided to shut it down. It was one of the biggest mistakes I made in my life.
The second example was when we launched the first platform where you can learn tango online. Attending one of the largest tango events in the world, I realized how big the tango community is, it reaches all over the world. It was the first moment when I realized that markets are not countries but tribes. We decided to design a product for tangeros from all over the world. This time was different, we convinced customers from more than 60 countries to use the product. This was for me, the AHA moment, when I decided to approach markets as tribes.
A few days ago, I saw my son talking with some friends on Skype, and I asked him, “do you ever meet them in real life?” He said, “no.” “Do you know where they live?” He said “no.” And this struck me. I then realized that there are 2 kinds of people, those born before the internet era, and those born after. For the first category, location is still the way we see the world, for the second location is irrelevant.
Why is the location so important for the first category? Back 20-30 years ago, the only way to get customers was in your neighborhood. The only way to collaborate with someone was to be close to that person, in the same room. For all the people who lived at that time, it is super difficult to change this view. For this category, it’s difficult to understand that now it is possible to get customers without living in the same city or even in the same country. Also, it’s difficult to imagine collaboration without being in the same room.
But today, with the help of technology we can collaborate with people from all over the world. We can offer services and get services from companies located all over the world.
And Technology is still evolving exponentially. Microsoft is working to build this VR environment, and companies like this are trying to build the holodeck for us. One thing I can tell you is this type of work will be the main way we are going to work in the future.
Like markets, networks are not geographical anymore. People tend to meet online and collaborate like never before. You can find product people on Producthunt. You can find early customers, on Betalist. You can find investors or other startups on Angelist and mentors on Clarity. The only thing you have to do, is to start the conversation with them, and you’re connected.
Of course for us born before the internet, we still need to meet in person, and I recommend this from time to time. But don’t choose a location only for the network and not even for your team. You will be able to connect with them online without a problem and will be able to collaborate with them in ways we cannot even imagine today.
When you want to choose where to set up your business, you can use other criteria like job market, travel connectivity, business freedom, taxes, education, climate, pollution, or the cost of housing.
But your market, your network, or even your team can be addressed from anyplace with a good internet connection. Tech will make the location become more and more irrelevant.