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Element 30. Appropriateness of Location > Practical Experience—This Deserves th...

Practical Experience—This Deserves the Medium Weight of 2

It seems that no place is ever perfect. I have worked in North Dakota with plenty of seed capital waiting for opportunities, plenty of ideas, a fine university, and extremely close relationships with both US senators and the local congressman. However, it is a tough location because the talent pool is thin and the markets are all far, far away. I have also worked in the Washington DC area where we had plenty of talented people, universities, and ideas, but little seed capital. My recommendation is that you find a location where the resources you most require to succeed are in plentiful supply and then build around it. Note that if you are contemplating a business that relies heavily upon distributing information on the Internet and via the telephone, and if you have long hoped to live in a particular setting, such as in the South near the water and a golf course, now might be the time to initiate your conversations with people there who might support your venture

Don’t use cost savings as an excuse for a location that handicaps or even dooms the enterprise. Low costs of living and low costs of labor in a remote location might be tempting, especially if you already live there. After all, the Internet and Federal Express solve remoteness and allow companies to flourish wherever the entrepreneurial spirit blooms. But be careful. My favorite example here was a manager’s insistence that video production of a cable channel devoted to the military should be situated in a river town in the Midwest. Never mind that Washington, DC, about 550 miles to the east, was a 24/7 marketing opportunity for all aspects of the enterprise. In that case the costs of not being in Washington were staggering and insurmountable. The network failed in that town—twice, once before chapter 11 and once afterward. The point? Location as a cost reduction bonus is often trumped by location as a strategic marketing, talent pool, and business-accumulating bonus.


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