Marketing Your Startup Hub
By Evan Miller
November 18, 2013
There seems to be an increasing interest in turning old-fashioned cities into startup hubs and technology Meccas. American, Canadian, and European urban centers are looking to California’s Silicon Valley and thinking: How can we be more like them?
Probably the worst way to become a startup hub is to imitate Silicon Valley. Anyone who has read at least one book on marketing should know that as soon as you try to be more like the market leader, you’re going to start losing the market, for the simple reason that you no longer stand out in people’s minds. Why would a startup or engineer move to Your Fake Silicon Valley (or any of dozens Fake Silicon Valleys) when they can go to California?
Your Fake Silicon Valley needs a short, memorable answer to that question. Your Startup Hub needs to be the best at something and constantly talk about the thing that it’s best at. When I read something like this, I am left thinking: Ann Arbor is sort of like Silicon Valley, except that it is worse in every way.
Too many cities think that they’re “competing with Silicon Valley.” The trouble is that they’re competing not just with Silicon Valley, but with every other city that is competing with Silicon Valley. Cities that lack a unique market message and differentiated market position are going to be lost in the noise.
It’s instructive to look at a few American cities that have managed to stand out from the competition so far.
Boston has done an excellent job positioning itself. It’s the best place to start a biotech company. I don’t even know whether that’s true, but I’ve heard it several times, and people seem to believe it. Despite Route 128’s epic loss to El Camino Real for being home to America’s computer hardware industry in the 1970s, they now have a decent market strategy for competing with Silicon Valley for talent and companies. Biotech? Come to Boston.
New York has also done a good job just by virtue of being New York. It’s the best place to start a company and live in New York City. Hard to argue with that one. People from all over the world want to live in New York City, so they have a marketing edge compared to, say, San Bruno. Also, anything related to finance or fashion will have a hard time surviving outside the Big Apple.
Austin, Texas has a burgeoning technology scene. Being next to a large research university doesn’t hurt. But it’s probably Austin’s reputation for live music that solidified Austin’s reputation as a cool place to start a company. Their marketing has been so successful that Silicon Valley elites fly to Austin every year to throw a party and launch companies. Austin might not be the best at anything, but it’s definitely the best place to be cool.
Seattle, with its wealth of Microsoft-, Amazon-, and Boeing-bred engineering talent, must be a great place to start a technology company. However, it has done a terrible job of positioning itself to the outside world. When I think of Seattle, I think of rainy weather and neurotic coffee drinkers. If it’s a better place to start a technology company than Silicon Valley in some particular way, it has yet to inform anyone of the advantage.
To compete against Silicon Valley, a place needs to stand out in people’s minds. How is your city better? More importantly, how is your city different?
I see essentially two strategies available for competing with Silicon Valley for talent and investment.
Be the best place to start a particular kind of company
Be the best place for a particular kind of person to start a company
The first strategy is old hat. In practice it’s difficult to pull off because it requires expertise in something, and expertise is hard to import when you don’t have any yourself. It’s a venerable strategy for cities that already have a lot of home-grown expertise in a particular science or technology field.
But the second strategy has been almost entirely overlooked. For cities that don’t already possess a trove of technical talent, recruiting a particular kind of person is really the only viable way to build a startup hub that lasts.
Only one city to my knowledge has adopted this strategy. Entrepreneurs in Chattanooga, Tennessee are declaring their intention to make Chattanooga the best place for women to start companies. This message plays to one of Silicon Valley’s weaknesses, which is the fact that it’s run almost entirely by men. There are countless variations of this strategy up for grabs, because anyone who has lived in the Valley knows that — to put it dryly — it’s not the best place for everyone.
Both kinds of specialization require courage. It’s easy to throw dollar bills and square footage at a general-purpose “technology incubator,” because you get to tell everyone yes, come to our city’s brand-new technology incubator. It is designed for all things technology. Politicians love technology incubators for that reason. But an incubator is not going to work very well unless it’s willing to say no, you might have a good company, but it’s not helping our city become the best place for _______.
It’s sad to consider the amount of money spent on “technology centers,” “regional incubators,” and the like. Cities could be carving out real market niches for themselves, but instead they’re trying to compete against Silicon Valley on the Valley’s terms. In the short run, everyone is patting themselves on the back for “encouraging technology in our great city,” but in the long run, they’re just instilling local technologists with more desire to move to California. They’re creating a farm team when they should be starting their own league, or else learning a different sport.
Choosing a market position requires courage in more ways than one. Stakeholders in a city have to sit down and agree on what the market position will be. If the chosen position is too broad, the city won’t be taken seriously; if it’s too narrow, the city will consign itself to obscurity. It can be difficult to take a stand because most people won’t like the idea of limiting their city to just a niche, and everyone will have their own ideas about what the niche should be. It requires courage to pick a niche, and leadership to build a consensus around it.
It also requires courage because by staking out a position, you’re likely to be laughed at. It’s easy to say we want to encourage innovation in our city. It’s hard to say (for example) we want our city to be the best place for people over the age of 50 to start a company. People who have lived in the city for a long time will have a smirk on their face as they inquire as to whose bright idea that was. (Being laughable is actually a good characteristic, because it means people are more likely to repeat the message until it starts to be taken seriously.)
American cities have traditionally acquired their unique reputations, directly or indirectly, from the accidents of history and geography. In the competition for talent and investment in (say) agriculture or manufacturing, geographic position determined market position. Steel? Pittsburgh. Wheat? Chicago. The computer technology industry is different because American cities are, perhaps for the first time since their inception, remarkably alike. With a few important exceptions, they are totally unspecialized. And if they continue to make general investments in “technology,” without stating investments for whom and technology for what, they will soon be forgotten.
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