What kind of company can you build outside of the Valley?

by Boris Wertz

I often get asked by investors and entrepreneurs alike how building a startup outside of Silicon Valley is possible and I always answer that it depends on what kind of company you are trying to build.

So if you are trying to create the next Facebook, Google, YouTube, Twitter, or Foursquare and your company requires a large amount of funding and needs to be close to where the buzz is (because dozens of other startups are competing with you with exactly the same idea and the winner will take it all), then a “secondary market” like Denver / Boulder, San Diego, Seattle, Boston, Montreal or Vancouver is not the best place to be.

But if you have carved out a niche for your company that is a bit off the beaten track, are comfortable to do more with less money, bootstrap longer and grow your company a bit more organically, then any of those secondary locations could be the perfect place to start and build your company. You might not have the same access to money and senior talent but you usually have much lower costs of operating your company, access to great engineering talent without competing with the Google’s and Facebook’s of the world (and the salaries that they are paying) and an environment that sometimes makes it easier to focus on the real value of a product for customers compared to chasing the latest hype.

Not sure if you can create big companies in places like Edmonton, Kelowna or Victoria? Yes, you can! Take Bioware, the Edmonton-based gaming company that the two founders Greg and Ray built over a decade in a city that did not have not a single gaming company before they started their company – sold to EA for close to a billion dollars. Or Kelowna’s Club Penguin, a company that was the first to create a virtual world for kids and sold to Disney for over $750 million. Or my own company AbeBooks that got built in Victoria, BC, over more than a decade before being sold to Amazon.

Great companies are being started in these markets every day – they will perhaps not be as glamorous as the Valley startups but will still create enormous value for customers and subsequently exit opportunities for entrepreneurs and investors alike.

BioWare Corp.
Edmonton, Alberta, Canada

BioWare Corp. is an electronic entertainment company that develops computer and console games. Our published projects include: Shattered Steel, the genre-defining Baldur’s Gate role playing game series, MDK2 for Dreamcast and PC, and MDK2: Armageddon for Playstation2. Recently, BioWare released Baldur’s Gate: Throne of Bhaal, the massive expansion pack to Baldur’s Gate II Shadows of Amn.... more

Club Penguin

In March of 2005, New Horizon Interactive set out to create an online world for kids where they could safely play games, have fun and interact. As parents and Internet specialists, New Horizon''s owners wanted to develop a place they’d be comfortable letting their own kids visit. The Club Penguin team got to work, consulting with educators, law enforcement representatives and other parents,... more

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Boris Wertz

Boris Wertz

Boris Wertz is one of the top tech early-stage investors in North America and the founding partner of Version One.  He is also a board partner with Andreessen Horowitz. Before becoming an investor, Boris was the Chief Operating Officer of AbeBooks.com which sold to Amazon in 2008. He was responsible for marketing, business development, product, customer service and international operations –... more

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