In recent years, there has been a surge of startups taking the leap and setting up shop outside the typical tech-heavy areas like Silicon Valley and New York. While these so-called “remote startups” face a variety of challenges, there are still many benefits to building your company way outside the box.

Challenges: Funding, Talent, And Meetings

Many startups are dependent on funding, particularly at the beginning of their lifespan.  A company situated outside typically accepted startup hubs faces a little scrutiny and possibly missed opportunities for funding. There are a handful of venture capital firms unwilling to invest in business outside the preferred hub for fear it will be difficult for the company to maintain relationships and networks.

A few investors have also voiced concerns about the ability of remote startups to attract industry talent.  In some parts of the country, graduates leave the city their new alma matter is located and move to the “usual” hubs for the best chance at the most desirable jobs. It can be challenging to attract decent talent to relocate to areas outside the norm.

Remote startups could spend more time and money traveling to meetings, lowering a company’s bottom line. Even though everyone can video chat from anywhere, and is perfectly acceptable, an in-person meeting is still the most personal way to communicate ideas, strategize for the future, and build lasting relationships.

Opportunities: Lower Costs, Higher Retention Rates, And Simplicity

Making the decision to break ground outside of the typical startup hubs like California and New York could significantly lower operational costs.  Depending on where an entrepreneur chooses to start a business, location could help their company survive the first years with the possibility of less overhead costs by saving on real estate, salaries, and taxes.

The practice of company hopping is prevalent in the official startup hubs like Boston, Manhattan, and the Bay Area. Hiring and training new talent reduces operational efficiency and overall productivity.

Because of the “lean and mean” mentally of many remote startups, a new hire could be brought in at a higher level than at other companies.  Added autonomy makes employees happier, and less likely to jump ship so soon. Longer retention rates ultimately raise productivity rates.

Keep It Simple

Outside of the big tech areas like California, New York, and Massachusetts and without the insular pressure that primary hubs foster, entrepreneurs can sidestep the pressure to be the prettiest young thing and instead focus on creating a less glamorous company.

Not all entrepreneurial companies are sleek, high-tech companies.  Many startups begin and end with providing a simple, useful product or service, and make millions of profit in the process. Junk removal, crutch rentals, and recycled ink cartridges are just several examples of unsexy entrepreneurial ideas that morphed into successful remote startups.

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