Most aspiring entrepreneurs believe that you need to build a startup in a major city, or least near one. However, Scott Wayman, the founder and CEO of Kangarootime (as well as a Graduate of the Founder Institute), decided to move his company from Los Angeles, a hotbed of entrepreneurial activity, to Buffalo, New York, a city not exactly renowned for tech innovation.
It was a daring move, but one that ultimately proved to work out for Scott and his company.
If you think that you need to relocate to a big city for your startup to survive, think again. In this blog post, Scott outlines his experience of moving his company to a small city and the numerous ways Kangarootime benefitted.
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Back in 2015, I graduated from the Los Angeles Founder Institute with my company, Kangarootime, a cloud-based mobile application that helps childcare professionals by collecting payments, automating check-in and check-out, and streamlining communication with parents.
While Los Angeles is home to some of the most promising companies in the global startup scene, a multitude of support for early-stage businesses we had a chance to relocate, and moved our company to Buffalo, New York.
That’s right. We took our company, which received considerable traction in just the two years that it had existed, and moved to a city in the Rust Belt. For those who don’t know, the Rust Belt is a region once known for steel production and heavy industry that declined heavily in the 50s and 60s. Not exactly the type of place you’d think a growing tech startup could thrive, right?
Moving across the country ended up being the best decision we ever made, and I strongly encourage other startups to consider pulling up stakes from the big tech hubs, and moving to places like Buffalo, or similar regions. And if you don’t believe me yet, below are some of the benefits we experienced since we moved last fall.
We Moved to Where the Business Incentives Were
Most major cities throughout the United States are great environments to build a startup. With access to amazing tech talent, plenty of resources and close proximity to both potential customers and investors, it’s easy to see why places like San Francisco, Los Angeles, and New York City are hotbeds of entrepreneurship.
However, due to overcrowding and competition, larger metros have very few incentives for new business to launch there, which is especially challenging for first time entrepreneurs.
This is exactly what we encountered when we first started out in Los Angeles.
We were able to combat this by moving to Buffalo. In Buffalo, we were able to secure an office space within the 43North Incubator at the Innovation Center of the Buffalo Niagara Medical Campus, known for its clinical care, research, and education - a perfect asset for our childcare platform, and one that is hard to find on the west coast.
Another benefit our move to Buffalo afforded us was the city’s START-UP NY program, which helps new businesses through tax-based incentives and innovative academic partnerships. This unique opportunity allows us to operate tax-free for 10 years on or near eligible university or college campuses in New York State.
We Moved to Where Our Customers Were
Since launching in 2015, we’ve seen our customer base expand rapidly. However, one of the interesting trends that we noticed about our customers was that nearly 90% percent of them resided in the eastern or central time zone. Being all the way in Los Angeles meant that we were a good distance away from our core customer base. And when you're offering peace of mind to your customers (especially if those customers are parents of small children), being closer to them can help create a little more comfort and trust for them.
This move was especially useful for the customer support aspect of our company, as we were able to align our customer support hours to the same hours as a majority of our centers. Having a closer proximity to our core customer base means more flexibility for the employees, which means better overall service for our customers.
But the most important benefit for both us and our customers that moving to Buffalo gave us, was that we now interact with our users face to face more often. They can now drop into our office at any time for anything, which has helped establish a more personable and meaningful relationship between us and our customers. It feels less like a typical customer-business interaction and more like a community.
We Moved to Where the Talent Was
I knew that technically we had done some really enduring things, and built a revolutionary product. We knew uprooting the company would not send us into a debilitating technical spiral, and that our engineers had a fantastic culture.
However, finding the types of employees Kangarootime needed in Buffalo was certainly a consideration for us, as it should’ve been. As mentioned earlier, one of the biggest perks of starting a company in a big city is having easy access to plenty of qualified tech talent, and Los Angeles was no different, having no shortage of young, talented people practically begging for work.
So you can imagine our surprise when we saw just how hardworking and capable people in Buffalo were. We always knew that the rust belt was renowned for people with a strong, tireless work ethic, one that you don’t often see in major tech hubs, and we were excited to dive into the local workforce and bring on some amazing folks who have been invaluable to our company.
Currently, our focus is on building a team to tightly manage our SaaS metrics and scaling to grow Kangarootime into a revolutionary organization. And with a large population of competent people to choose from, our company is better equipped to achieve those goals than ever before.
We Moved to Where Our Employees Could Thrive
Tech companies are often known for offering employees a bevy of perks, from flexible schedules to free lunches to gym memberships and much more. However, while these benefits are all fine and great, they don’t really address one of the most important aspects of an employee’s life: where they live.
Rising living costs is quite possibly the biggest downside of running a company in a major city. And while some employees are often willing to commute a long distance to work at a great company, this is often a major factor in constant job switching amongst millennials, the largest demographic of startup employees.
For us, however, by moving to Buffalo, where the cost of living is considerably cheaper than Los Angeles or Silicon Valley, our employees now have a better chance of settling down and buying a home. And with the talented group of people we have working for us now, anything that encourages them to stay local for the long-term is good for the company, all while still affording them the chance to pursue the American dream.
Final Thoughts
I’m not saying that every startup should move from a major coastal city to the Rust Belt, but it’s definitely worth consideration. Most of you out there probably know that living in the big city has its share of challenges, which only makes the stress of starting a company all the more difficult.
But in smaller ecosystems, there’s more support from those around you.
My growing, agile startup looks nothing like a slow growing urban megacity with infrastructure that was built two generations ago. We emerged from nothing. We moved faster than the sleepy incumbents. We are succeeding because we align in so many ways to this beautiful recovering city. Our irrational optimism is identical to these parts of the country that were crushed by deindustrialization. Buffalo and Kangarootime are moving forward in tandem. The city, our team, advisors and stakeholders here are vested. We are inspired everyday to contribute to the success here.
And when you succeed, the local economy benefits, as well, because you’re creating more jobs, attracting more talented people to the area, and inspiring customers to support regional businesses.
So what do you say? Do you have what it takes to survive in the small city?
