A few weeks back Penelope Trunk wrote a really interesting article about deciding where to locate your start-up, entitled Starting a company in Silicon Valley is stupid. Clearly from the title of the post, she isn’t one of those people that preaches that you have to be in the Valley or in NYC to run a successful start-up. She herself moved from NYC to Madison, Wisconsin to start her new company, simply because the cost of living was low and the quality of life was high (according to studies on that sort of thing).

A couple of my favorite quotes from the article:

“The beginning of a company is slow and meandering. You have pretty much no idea what the company is or what you are doing with it, or if you even picked the right partner to do it with. During this time, it does not matter where you live. You are not hiring. You are not pitching your business because you don’t have a pitch.”

“Most of you will not be going after venture capital. You simply will not have a business idea that warrants that kind of investment. And in that case, you will be bootstrapping for a long time. And it’s a lot easier to bootstrap in a place with a low cost of living. And if you are not going to take in venture capital, then you don’t need to be where the big VCs are: New York and California”

“You don’t need your network in your backyard (which you would have automatically if you lived in Northern California), [but] you do need to be able to fly to your network frequently. The network you can build by just showing up in California or New York is unprecedented.”

All of this got me to thinking - is Albany, NY the best spot for Pure Adapt, Inc?

The answer I came up with was yes, and surprisingly our home town is actually a pretty good spot to start a company like ours. Here’s why:

• Our networks are here - all of us grew up in the area. You take for granted all of the people you know in your home town. When we fired our accountant and needed a new one, we were able to get more referrals than we could handle because we knew so many people in the area that were small business owners, either through family or friends or former internships or former jobs. Albany also has a lot of great higher education, and between the four of us we attended the four largest schools in the area. George and I went to RPI, Mike went to SUNY Albany, and Greg went to Siena undergrad and Union for his MBA. The connections we made there have opened up a lot of doors for us.
• A steady economy supported mostly by government and education - being that Albany is the capital of New York State, and that New York State is a pretty big state, there are a ton of government jobs in the area. I don’t know one person who doesn’t have a very close friend or family member that works for New York State. Every one of my friends who lives in the area that isn’t a part of Pure Adapt has a state job. My father is a programmer for the NYS Health Department. That’s just how it is around here. In conjunction with eduction, this creates a very consistent economy that doesn’t boom or bust like the rest of the country, and that’s a good thing for a start-up like us. With steady government jobs come all of the resulting steady jobs at hospitals and resturants and the like. The recession has affected us here, but not nearly like it has in other parts of the country.
• Available talent - having such a large academic community is a huge advantage for us. You always hear people around here talk about how top students come to school here and then leave to go to the big companies in Boston and New York City and Connecticut. From my experiences at RPI, this was definitely true. When I was doing interviewing for internships and full-time jobs in our career center, I don’t ever remember seeing companies from Albany. I do remember companies from pretty much everywhere else. I can think of a handful of companies from Silicon Valley that came to RPI to recruit tech talent, but no local companies. While this might not be a good thing for the area as a whole, it can be a very good thing for us. There is plenty of talent at these schools that would probably prefer (or at least consider) living in Albany post-graduation if there were options available. We plan on being that option, and we don’t think there will be all that much competition.
• Albany is a “crossroads city” - roughly equidistant from NYC, Montreal, Boston, and Buffalo, you can get to a lot of different places in just a few hours drive. I can hop a train and be in Penn Station in NYC in about 2.5 hours, eliminating the need to fly to get to a major networking hub. If I needed to get down there a few times a week for networking or meeting with investors, I could.
• Albany is a pretty big city - according to Wikipedia, Albany is the 56th largest urban area in US. As you can see from the picture, the city isn’t exactly small. Although commonly dubbed “smallbany”, it has pretty much anything that any other US city has, short of Boston or LA or NYC.
• Everything costs less - according to Salary.com’s Cost of Living Wizard, someone making $35k in Albany would have to make $55k in San Fransisco to maintain their current standard of living because the cost of living is 55% higher, and businesses typically pay only 20.4% more for the same job to compensate for that increase in cost of living. Simply put, our money goes further. We can pay ourselves less, we can pay employees less, and things cost less (real estate in particular). All of this adds up to a lot of money saved for e-commerce company that, from the perspective of our customers, could really be located anywhere so long as they ship products quickly.
• It’s spacious here - when I lived in southern Connecticut, about 45 minutes from New York City, the population density was insane. People routinely commuted up to an hour and a half to work just to find affordable living that wasn’t in an urban area. In Albany, my apartment is less than a 15 minute drive from downtown Albany, but also less than 15 minutes from some amazing nature. If you want to live on a farm and commute downtown, you can do it and have less than a 30 minute drive. Or you can live somewhere like Lark Street that has a big city downtown feel. This spaciousness is the reason that we got our warehouse space so cheap. We’re not in a bad neighborhood or a long drive away, but we got space at about 1/5 of the cost of what it would be just 20 minutes away in downtown. Personally, my commute is about 12 minutes on back roads, which doesn’t really feel like a “commute” at all.

Now, from a personal standpoint, I do want to experience and live in other places. The few years I spent in CT were awesome. In a few years I hope that our business gives us the freedom to do so, but in the meantime this isn’t a bad place to live. You really can do everything except hit the beach or watch professional sporting events, but those are only a few hours away. Aside from Albany, other cities like Schenectady, Troy, Saratoga & Lake George are just short drives away. And yea, winter sucks here, but I try not to be one of those people who always thinks that the grass is always greener somewhere else. There are a lot of great places to live, but we certainly lack nothing important here. So until the company is sold or I’m removed from the day-to-day operations, I’ll be happy here.

Ultimately, Albany works great for us. In most cases you don’t need to change your location to start a successful business, and certainly don’t have to move to New York City or Silicon Valley.