It's popular to believe location is irrelevant because you can start your company anywhere and reach employees and customers at any time of day via email, text, voice and video. But location matters tremendously because it determines whether your startup has access to resources needed to grow.
Here are six considerations when it comes to choosing a location for your startup office that will help boost your bottom line:
1. Be near pillar companies.
A pillar company is publicly traded, provides capital and talent to startups and even buys their products. You can boost your startup's profitability by locating your office near a pillar company.
For example, when Jed Yueh launched his first startup in Irvine, Calif., he found the city's human capital pool too shallow for the kind of tech-based company he was trying to run. He moved to Menlo Park, Calif. where he started a new startup called, Delphix, which helps developers build apps. By locating near pillar companies like Oracle, Yueh could hire king-pin engineers with experience having lead the design of similar successful products in the past.
2. Tap local universities for ideas and talent.
If you want your startup to grab market share, you needs to get the best ideas and talent. Locating your company near universities with such top talent will give you a leg up.
For example, if you were developing a video game and looking to hire top talent on a budget, you might consider locating near Becker College in Worcester, Mass., which hosts a vigorous video game development school, the Digital Games Institute, that produces talent at a lower price than Silicon Valley would charge.
If there is a big gap between the kinds of employees your startup needs and what's available locally -- particularly for work that can't be outsourced -- consider going to a place where such people are educated.
3. Work where others share your values.
An entrepreneur's choice of where to locate often flows directly from where she wants to live. And that choice can depend on whether she shares the values of the local startup community.
For example, Shimon Hason, CEO of software company Intigua, decided to locate in Newton, Mass. rather than Palo Alto, Calif. because he found Boston to be a more inspiring, more diverse location.
4. Move to where people want to live.
Your startup will be able to attract the best of the full range of talent that it needs if your headquarters is an easy commute. That's why so many networking startups in Silicon Valley open their doors near Cisco Systems' headquarters in San Jose.
To attract top talent, make your startup’s headquarters as close to where the talent works now as you can. That decision will make it easier for you to persuade potential hires to join you in an exciting new venture without changing their commuting patterns.
5. Stay close to investment capital.
Investors often like to be close to the businesses they invest in. That's why it can be helpful to locate near the offices of venture capitalists that specialize in your industry. Most of the companies I've invested in are located within a 30 minute drive of my office. I like to be able to share a meal with the top executives in the company or drop in to give a pep talk to the startup's people without the hassle of a long journey.
If you want capital from an investor who understands your business and can help it grow, it helps if your office is a quick drive away.
6. Be near your mentor.
If you need advice on how best to run your business, it's wise to be near a deep pool of mentors who can help you remove the impediments to growth.
Many of the companies I've invested in have consulted me for advice. It is much easier for me to give that advice if I can meet with the startup's executives to understand their vision and what the market perceives as their competitive strengths and weaknesses.
Mentors can help your startup with many different kinds of problems, but they are busy and some of them only have time for you during their 6 a.m. run. You can't join them for that unless you live nearby.
The author is an Entrepreneur contributor. The opinions expressed are those of the writer.
Peter Cohan is president of Peter S. Cohan & Associates a management consulting and venture capital firm. He is the author of Hungry Start-up Strategy: Creating New Ventures with Limited Resources and Unlimited Vision (Berrett-Koehler, 2012).