As part of my new series titled the “Exodus of Silicon Valley”, i’ll explore startup cities outside of Silicon Valley, the companies and founders proving life outside of SV is possible, and the challenges and benefits of setting up shop outside of the infamous startup capital of the world.
In this post, I dive into Research Triangle Park, the area named for the three hub cities of Durham, Raleigh, and Chapel Hill.
Exodus of Silicon Valley: Research Triangle Park
The past few years have brought much hype about the hottest startup communities outside of Silicon Valley. There’s San Diego, St. Louis, Los Angeles and dozens of other hotbeds looking to stake their claim as the darling of startup locations.
It is common to say that innovation drives economic growth and enables a modern standard of living, but why is it so hard for any region outside of Silicon Valley to truly recreate the ingenuity that drives the future of innovation?
While there’s no simple answer, what we do know is that there are a few key components to a thriving and sustainable startup ecosystem: cross-sector collaboration, universities for talent and research and government support. And when they all build upon each other, that’s when the magic begins.
I was recently in touch with Todd Olson whose company, Pendo.io, is making strides thousands of miles from Silicon Valley in a burgeoning region called Research Triangle Park, or RTP. RTP was established in the 1960s when IBM built a 600,000 square foot research facility. The region has now become the largest research park in the country, home to GlaxoSmithKline, Cisco, the EPA, Lenovo Fidelity Investments and many more household names.
And the startups in the region keep the innovative spirit flowing. Olson’s company was recently named one of LinkedIn’s Top Companies | Startups, among the likes of Uber, Airbnb, Dropbox and Slack. But even while RTP has brought Pendo great success, like many entrepreneurs, this was less intentional and more “happy accident” as Olson puts it.
“I wish I had a more scientific reason for this because it has really proven to be the right place for me to start and grow a company. But the truth is that I was recruited to Raleigh in 2001 by another great technology company that simply happened to be based here. Today, my family is firmly embedded in the community and have no interest in leaving. That’s why I’m here, and ultimately why Pendo is here. Call it a happy accident.”
However, many entrepreneurs still feel hesitant, insecure even, that their startup will not become a ‘real company’ unless it has a prestigious Silicon Valley address. Olson shared the same perspective but ultimately found RTP to be a perfect startup ecosystem and quickly turned inauthenticity into an opportunity for growth.
“It used to be that when I told people where Pendo was based, I was admittedly a little self-conscious about our location. Oddly, we had a San Francisco address on our website in 2014 — an address I had never seen or visited. It was for optics, and candidly it was inauthentic. It felt bad to me. So in our rebranding, we removed this and embraced our hometown in our branding. Our customers had shared that our Southern hospitality made us unique amongst their partners and was seen as a strength — not a weakness.”
When asked further about the booming startup ecosystem of RTP, here’s what Olson had to say:
“Let’s face it, you need to be a multi-millionaire to own a small home in the Bay Area. This creates extra pressure and stress that frankly impacts an individual’s ability to perform. The affordability creates shorter commutes which also decreases stress and improves quality of life. If you have a family, this is huge. Large commutes equal less time with family.
“We’ve also found it to be a location that has something for everyone. The number one reaction I get when people first visit the region is how “green” it is, referring to the density of trees. The weather is generally good year-round, which supports an outdoor lifestyle. We’re two hours from the beach and four hours from the mountains. As an urban community, we may not have 40 Poke bowl restaurants or speakeasies, but we have a handful. We also have a world-class performing arts center (DPAC), an amazing art museum (NCMA), a great craft beer scene and we boast several award-winning chefs with restaurants. We also have Google Fiber, which encourages a collaborative ‘work from anywhere’ spirit.”
For the entrepreneurs nervous to leave or start their companies outside of Silicon Valley, Olson has this advice: The initial instinct may be to say that Silicon Valley is where the action is, which is, of course, very true. But as much as that may be an advantage for fundraising and access to an ecosystem, it also means tremendous competition for talent and much, much higher operating costs. Every choice demands a trade. I'd suggest carefully evaluating the cost of these trades, not just on conventional wisdom, but from the perspective of the practical day-to-day realities of business and life.