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Not all startups need the bright lights of the big city

TechCrunch TechCrunch 31/05/2016 Ben Fischberg

In an office park overlooking a lake in Southern New Hampshire, Rajesh Mishra is working to change how cell networks are created. Rajesh and his company, Parallel Wireless, along with a dozen or so other nearby startups in Southern New Hampshire, are taking on a variety of challenges that face tech infrastructure that most people are not aware of, but impact our daily lives.

These startups are working on problems like how to load websites faster, how to improve security in storage systems and how to enable people to get more information across cell networks. In addition, these startups are also disproving one of the strongest-held beliefs in tech that emerged over the past decade: that startups need to be located in cities and must rely on millennials.

Over the past two decades, the center of gravity for tech has shifted from the suburbs to the city as millennials flock to cities, and startups and tech firms follow. San Francisco, New York City and Boston have experienced a tremendous upswing in tech as the firms that had been located in nearby suburbs have moved into the city.

Despite this trend, or more likely because of  it, Southern New Hampshire has benefited, as the remaining suburban startups have a clearer pitch to job seekers and certain heightened advantages over urban tech firms. While the suburbs are not the right place for all startups, it is the perfect place for some.

Dyn, an Internet performance management company that handles all of the infrastructure-related decisions websites have to make, was started in Manchester, NH because the founders liked the freedom that came from the suburb’s low costs. Instead of being dependent on outside funding to pay expensive rent, companies like Dyn have been able to develop on their own schedule as they don’t need to meet the metrics set by VCs in order to raise successive rounds of funding needed to remain open.

Being located in Manchester, which can be 75 percent less expensive than Boston, the nearest city, enabled the Dyn team to decide when they want to roll out new products, when they want to expand internationally and how they want to run their company — a level of control that a company cannot have if it must appeal to investors in order to survive, a necessity for many urban startups.

While the suburbs of Southern New Hampshire are an hour away from the nearest major city, tech firms and startups there have not struggled to attract the talent they need to innovate and grow. In fact, the suburban location is a boon to recruiting; even though millennials may prefer to live in cities, older workers prefer the suburbs, and suburban startups offer an easier, rush-hour-free commute compared to heading into the city.

For a certain group of startups, being in the suburbs is the best option.

DataGravity, a Nashua-based startup that introduced data-aware storage with the goal of turning storage from being thought of as a dumb container into a trusted advisor, has needed to attract a variety of people because of the range of challenges the company is working on. As DataGravity looks for engineers to work on storage and security issues and designers and data scientists to develop analytics and visualization tools, DataGravity, along with other nearby companies like Plexxi, have an easy time attracting suburban talent. While these companies may need to make an extra effort to convince people in Boston to join, these startups have been able to attract the needed people as they grow into companies worth hundreds of millions.

The suburban startups of Southern New Hampshire have capitalized on their location and wisely use it as a test ground for their products before trying to sell to large companies or attract large user bases. Being located outside of a buzzy tech scene not only enables these companies to focus on their products, it lets startups stand out in their communities, making it much easier to interact with users and run pilot programs.

Adored, a Manchester-based app that lets users know about daily specials, worked with a group of local merchants to test different approaches before deciding on the app’s current structure, which emphasizes daily photos of chalkboards. Adored was only able to iterate and receive significant feedback from its users since merchants in towns like Manchester and Nashua were excited to try a new marketing solution and were willing to stick with Adored as it developed. Adored has now launched in large cities, but the company’s success will be in large part due to all the feedback received in New Hampshire suburbs.

The recent revitalization of Southern New Hampshire towns like Nashua and Manchester shows that even though it is popular for startups to be located in a city, being based in the suburbs may be the best decision a tech firm can make. The chance to build and grow at your pace, without being beholden to VCs, can be incredibly freeing.

Similarly, being outside the tech echo chamber that ensnares many startups and causes them to lose touch with their customers can be highly beneficial. At a time when startups are desperately searching for space in cities, Nashua and Manchester, New Hampshire reveal an alternative.

Rather than just deciding to be located in a city because it is the hot thing to do, startups should think through that decision. For a certain group of startups, being in the suburbs is the best option.

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