Should you start your next company in SoCal? Take this quiz
Southern California has joined Silicon Valley and New York City as a hot place for tech startups. Last year 220 startups, raising $870 million, were born in Los Angeles, and there have been some big time successes such as Snapchat, which came out of Technologywood. Sure, SoCal has great weather, but now a startup ecosystem has sprung up to support all this entrepreneurialism.
The question is, should you start your business in SoCal or NoCal? I put together a short quiz to help you figure out which location is right for you.
1. You need to recruit a technical team. What's your approach?
a) You have the ability to train and mentor high potential younger technical talent and are operating on a more modest staffing budget. You like the idea of hiring directly from universities.
b) You don’t care; in fact, you prefer to have your technical team offshore.
c) You have the ability to pay above market rates to attract top technical talent. You are also willing to continue increasing pay over time to protect from churn as there are countless other startups vying for your technical talent.
2. You will need to raise money throughout the lifecycle of your company. What type of investor ecosystem makes you most comfortable?
a) You want to start with seed funding locally, but you are OK pursuing A and B funding rounds outside of your region if necessary.
b) You don't care where your investors are located as you don't need much help from them. After all, aren’t VCs only about the checkbook?
c) You don’t want to take a chance that your seed, A, and B round investors are in different cities. You want to see all of your investors more often than just the board meetings.
3. You expect to be successful building your company for the next 5+ years. What type of place do you want to live in?
a) You prefer warm weather all year long, beaches, and diverse industries, and you don't care about having a local football team. You want to be part of a fast growing emerging startup ecosystem.
b) You don’t really care where you live, as you expect to be heads down building your business.
c) You are okay with cooler weather in the evenings and summers. You prefer public transportation, and you don’t want to hear about the latest movie star sightings.
Time to score your results!
Give yourself five points for all “A” answers, three points for “B” answers, and one point for “C” answers.
11-15 points: SoCal is where you should locate your startup. Sounds like you enjoy the beaches more than bridges, and you prefer to run into Katy Perry instead of Mark Zuckerberg. In addition, you are comfortable hiring and training engineers right out of top schools such as Caltech, UCSD, UCLA, Pepperdine, and USC. And who wants to see your venture investors between board meetings anyway.
6-10 points: Either SoCal or NorCal could work for you. You are flexible and are comfortable going wherever your co-founders want to be. You realize your venture investors will probably ask you to move to Silicon Valley anyway. Plus, you have never been on a surfboard or played beach volleyball, and weather isn’t a deciding factor.
0-5 points: NorCal is where you should base your startup. You have always dreamed of having a Silicon Valley company. You know that the ecosystem is unparalleled and it would be great to run into venture capitalists at Philz coffee each morning. It will be easier to leverage the local network of resources such as lawyers and recruiters, and you can develop relationships with serial entrepreneurs who are deeply embedded in the Nor Cal start up ecosystem.
If you do want to move ahead and start your company in SoCal, here are some thoughts about how to go about it:
- Spend time at the SoCal universities. First, local universities graduate more engineers than anywhere else in America.
- Develop relationships with the 20+ SoCal incubators including MuckerLab, LaunchPad LA, Amplify, Start Engine, Science, Idealab, K5, Upstart LA, LA Business Technology Center, Originate, and Founders Institute.
- Go out for drinks with the countless value-added seed funds (Rincon Venture Partners, Baroda Ventures, Karlin Ventures, Anthem Venture Partners, Double M Capital, and Velos Partners), as well as angel groups (TechCoast Angels, Maverick Angels, Keiretsu Forum, Pasadena Angels, and HBS Alumni Angels).
- Consider co-working spaces such as Cross Campus, Real Office Centers, Co-Loft, Blank Spaces, Next Space, and lo/LA.
- Network with local law firms who are bringing together the startup ecosystem such as Cooley, Manatt, Bryan Cave, and Stubbs & Alderton.
- Keep tabs on local tech news with PandoDaily, Startup Digest, and SocalTECH.
- Don’t miss networking events such as the Silicon Beach Fest, Thursday Nights, Startups Uncensored, LA Venture Association, Twiistup, Caltech Enterprise Forum, Los Angeles Startup Weekend, and General Assembly talks.