There are a lot of ways to build a company – some by accident, some products of history, and some by poorly conceived thinking (see Charlotte, North Carolina – who would think Charlotte would become a world banking headquarters?). An obvious goal is to base your business where it’s got good access to customers, talent, transportation or perhaps capital: do none well and you suck up time in travel, recruiting, and moving people that could be otherwise spent toward serving customers and making great products. Do them all effectively and you start with a built-in competitive advantage.
In work as a SVP of HR with a 160 year-old company with 3,600 employees at 50 national locations, as well as someone who helped build and sustain a South Park start-up of 85 people, including 12 people in remote locations, I’ve seen more than a few things that lead to success or failure. The good news is that there are some predictable patterns that occur and can be anticipated. The other good news is that a little forethought goes a long ways. The bad news? Early missteps easily become albatrosses that linger for a long time. It’s all part of the process of starting up and making a company from scratch.
And the making of companies – even as the Great Recession lingers – is what’s going on today. If you follow the chatter you can see signs everywhere, including the showcasing of start-ups via things like the recent San Francisco “Startup Crawl” or the blurbing of startups in the area where I grew up, around, Portland, Oregon, by Silicon Florist.
As I look around there are companies that from a distance appear to be getting it right – Jive Software comes to mind – as well as some that could easily be doing better.
Here are five things talent / location factors you should consider when building your company:
1. What’s your competitive advantage? There are companies where location (think high end grape growers) makes or breaks them. For others – biotech for example – it’s the IP they hold and can defend, For most anyone else even with good IP, it’s talent and their performance that will be the difference between make and break. So the first step out of the gate is to figure out what’s likely to differentiate your company and take steps 2-5 from there. BTW, better reality test and ask hard and around on this point – defaults to “great customer service” and “unique customer approach” are frequently faulty and delusional. (See Caanan Partner’s How to Ask for Money for a great template.)
2. Where’s the talent you need to succeed – both today and likely for tomorrow? Richard Florida’s work (see Creative Class: the source of how we live, work and play) is a great place to start to anticipate where the different types of talent pools might exist in North America. Looking for engineers? Bend, Oregon is a great place to live but you’re better be recruiting and basing people in places like Bothell, Washingon or Belmont, California if you want access to get a critical mass of talent. Going virtual? Better think about the stuff (more on this below) that makes it easy for people to work together – time zones, access to airports, and access to fast broadband: dial-up won’t cut it anymore for most team communication.
3. Who is going to run the show? Many founders wants to shepherd their idea to fruition: most don’t have the complete set of skills (people management, financial acumen, negotiating chops and biz dev abilities) to take things all the way. Better figure out what abilities your early employees – including company leadership folks – need to have so you can grow your foundation. A company’s performance is a mix of talent, strategy, and execution and more than a dash of luck – which means that you’ve got to figure out how to get the right folks moving in the right direction effectively and efficiently for optimal results. That’s the area where good leadership makes a big difference.
4. It‘s a simple thing but having the right geography and the right physical space is important. If folks need to work together having physical space that thoughtfully encourages collaboration, and the serendipity of bumping into people to have “did you know” moments can’t be exaggerated. If you’ve adopted a two location strategy – one that Jive Software, New Relic, and Aravo Solutions have embraced with a Portland – Bay Area axis, then it’s a matter of having locations that are easy to get travel to from one to the other via air or rail travel so that things are kept simple and easy.
5. How easy do you make it for the right people to find and work with you? One lesson learned from helping grow South Park start-up company Fluid is that start-ups are best when money is tight: it forces habits that serve you well later. It doesn’t mean you don’t think about company brand, and how you’re going to attract and retain folks. It means lots of thought and application about what makes your product, environment, culture and future unique and then communicating those elements to the community (investors, would be employees, would be customers, etc.) in which you operate.
Things like good information (location, product, history, culture, employee life, etc.) are all important things to help screen in the people that might work, and help screen out the folks that won’t work out so hot. Some decent branding and positioning can alway help [See David Kippen of Evviva Brands piece here.]
And for companies with lots of cash? Just because you have money doesn’t mean people will stick: they just may move on to the next rich start-up that’s touting the new “new”.
I mentioned above that I thought Jive Software was doing some interesting things in the company founding business that worked. Here are four things that come quickly to mind:
- They’ve adopted a two-city location strategy (Portland and Palo Alto) that makes a lot of sense. SFO – PDX flights are typically predictable and short: I know people who commute from both cities to the other and it’s easier than a drive from the deep East Bay to downtown San Francisco. Portland provides a high quality of life, perhaps better schools, and a similar though less diverse cultural environment than the San Francisco area. Moving folks to the “home office” which is in Portland likely involves less resistance than if it were the other way around (as New Relic, which is SF based, has done by having their HQ in San Francisco).
- Their Portland and Palo Alto locations are transit friendly: the Portland office can be reached via the mass transit rail (MAX) as can their Palo Alto location (via Cal Train and shuttle). This is hard to tell about New Relic, since no address is given for their Portland openings. And Aravo in Portland? No so transit friendly unless you drive.
- Many of Jive’s jobs are Portland OR Palo Alto: it gives them great flexibility, as well as giving employees flexibility in where they might want to locate. This either or means that good work must be done on the teaming part – but it also means that people with families who start in Palo Alto may have better options to move to family friendly Portland.
- By giving good information to would be new-hires, Jive’s approach has made it easy for people to think about working with them. Their job listings note not only current openings, but unlike many others (Facebook comes to mind) they have a “Future Interest” listing so people can park their resume in advance of an opening. Their Palo Alto office is surrounded by companies like Ning and Facebook, which means that although they may compete with that talent it means they’re also in the thick of that talent. Ning and Facebook may also be customers – which may mean that they’re in the thick of the richness of customer feedback and can bump into people who are (potential) customers all the time.
A company like Jive Software with dual sites still has the challenge of integrating these multiple sites into one “whole” company. While it likely helps that Jive develops social collaboration software, the research on virtual teams and larger organizations – as well as experience from my consulting practice with virtual teams – is that nothing replaces thoughtful face-to-face engagement.
Starting a business is both great fun and terrifying. You can increase the former and reduce the latter by a few, thoughtful steps up front that will make the early foundational steps ones that can last you the company’s lifetime.
Life Back West is an occasional set of writings focused on ways people, teams and organizations can be both more effective (doing the right thing) and more efficient (doing the right thing well). More about executive and team coaching services can be found at the “About J. Mike Smith and Back West, Inc.” sidebar or the “Hire Me” tab above.