There was a wonderful conversation two weeks ago on the NY Times’ Room for Debate around “Can New York Rival Silicon Valley.” As someone who spent two years in 2003 and 2004 in NYC selling technology to Wall St trading firms and having my friends and clients wonder what this whole startup thing was about and why I was “wasting” my career doing this after doing a fellowship at Carnegie Mellon University it is great to see how vibrant the NY Startup community has become. That certainly wouldn’t have been a credible way to frame the question in 2003 and today while I hope it doesn’t try to become Silicon Valley the entrepreneurial community in NYC is second to none.
After moving back to Pittsburgh, I’ve had a chance to again watch and do my part to help technology scene develop. Pittsburgh is certainly different then NYC and Silicon Valley but I’m confident we will ultimately build a different but great startup tech community. Many attributes of Pittsburgh’s entrepreneurial community remind me of NYC in 2003. Pittsburgh and NYC are not unique — at ReadWriteWeb we’ve regularly covered places across the world in our ‘Nevermind the Valley‘ series.
And beyond our coverage, people talk about this all the time as it seems to be on every regions’ set of goals. First off, if you’re trying to build an entrepreneurial community, I strongly recommend you send everyone the following video by luminary venture capitalist Brad Feld:
It has been great to see so many places focus on this and at least start down the ’20 year commitment’ that Brad talks about. However, one thing I’d add that I think a lot of people overlook is the importance of creating a culture among the bigger companies in the region to “buy local.” In Pittsburgh I’ve been working to address this with a team of entrepreneurs, local corporate leaders and professors from Carnegie Mellon to help coordinate a group called Innovation Happens.
This cultural change is especially important for B2B technology startups – ie startups targeting other businesses as their customer, and not consumers. For these companies the increase in value and probability of success between zero and one customers and then again from two to five customers is massive. The value from these customers is even more dramatic if the customer is local and so a larger group of the team members can interact.
Obviously the startups need to earn the business, but in many regions it’s actually unintentionally a disadvantage to be local. This is often because you can learn much more about the local startup and sometimes give the benefit of the doubt to competitors. For example, I talked to a CIO a few years ago who explained he had chosen a startup from across the country instead of one locally because “they were much larger.” It turned out they were exactly the same size and the local startup had actually raised more money. To some extent this is just an example of not doing your diligence, but it remains a fact that it’s easier to do more & more in-depth diligence of local vendors. (By the way this easier access to diligence is actually a benefit if you’re strategic about this.)
Yet more to the point, the irony is that its actually much better for the customer to buy local – as you can get more personal and face-to-face support when necessary. Also, when large companies choose to work with startups they often get an injection of innovative thinking that can really improve the business in unexpected ways.
While certainly sometimes you need to work with a startup from across the country or even the world, the injection happens even more freely when they are down the street. Therefore, support your local entrepreneurs – buy local technology! And who knows your business may end up more healthy as well.