September 22nd, 2021 | By: Wil Schroter | Tags: Recruiting
Living in an overpriced is now a choice, not a requirement.
That wasn't always the case, as startup Founders like us would flock to cities like San Francisco, Los Angeles, and New York to find the capital and people we needed to build something incredible (I lived in all of them). We'd convince ourselves that our 800 square foot apartment (with roommates!) made sense because if we weren't here, we would never have a shot a startup glory!
And we were mostly right — for a time.
But the requirements of being in a big, overpriced city have changed dramatically. For the first time in startup history, we can do nearly all of the things we once did in a big city from the comfort of our own (much cheaper) home. In a new era of Slack, Social, and Zoom, the high frequency of connections no longer happens in conference rooms and networking events — they happen online. We can raise capital, recruit talent, and work remotely without ever having to leave our house.
So how do we take advantage of this brave new world?
Yes, fellow Founders, we can afford a house. Every single Founder and their staff has spent countless hours on Zillow comparing what they could get in their hometown versus what they are paying in rent in an expensive city. It's insane.
We'll hear people say "I can't believe how cheap things are in these other cities!" which is the wrong way to think about it. Things aren't cheaper in other cities, they are overpriced in a handful of cities we chose to live in. What we see in other cities is what houses are supposed to cost, and yes, we can already afford them.
But more importantly, so can our staff, which should be our bigger concern. Moving to an expensive city may be a stretch for us, but imagine the toll it takes on our entire staff who makes less than we do, and how frustrated they are as they look forward to starting a family or even still, breaking up with their 3 roommates.
The fastest way to make more money is to pay less for things. We can easily relate to this on a personal level when we're thinking about housing and personal expenses, but let's zoom out a bit and think about this as it relates to our startup expenses.
We're likely paying 2x or more on nearly every expense for our startups, from salaries and office space to even dumb stuff like food and Uber rides. We have to ask ourselves — is this the most efficient use of our valuable startup capital? No, it's probably not. There was a time when the only way to raise money or recruit people was to absorb these ludicrous costs, except it's just not anymore. Now a startup Founder that's sitting on 200%+ increases in their costs is just simply irresponsible.
Shredding our costs has a huge impact on business, from extending our runway to allowing us to afford twice as many resources at the same cost. Twice as many! What startup Founders could possibly say "I want half the resources because I have to be in Santa Monica?" (Lived there, loved it, too expensive).
If we're so hung up on living in an overpriced city we also have the option of staying in said city, and letting the teamwork from somewhere else. At Startups.com we have 200 people in the U.S. and every single person works remotely, and we've been doing it for 10 years. It works, it's awesome, and we're certainly not alone in doing it.
This allows our teams to go find what works for them. Maybe they want to live in a big city, and by all means, they can. But maybe they want to live in the mountains, or next to a beach, or in the middle of frigging nowhere — it doesn't matter. Let's give our teams the freedom to build the lives that they want, where they want, without dragging them with us.
Let's look at this new generation of building startups as a fantastic opportunity to increase our optionality, decrease our costs (personal and professional), and let's just get nutty here, create the lives that we've always wanted, not those that we were shoehorned into.
Forget Compensation, Let’s Talk Quality of Life - Founders, let's start with what improves our quality of life and then figure out where money comes in.
Can Doing Non-Startup Stuff Help My Startup? - Sometimes the best way to grow our startups is to spend some time doing stuff that has nothing to do with our startups!
Work/Life Balance (podcast) - Stay longer. Work harder. Sleep less. As startup Founders we've all gone through periods where this felt necessary. Learn how balancing life and your startup is actually beneficial for you and your company.
Wil Schroter is the Founder + CEO @ Startups.com, a startup platform that includes Bizplan, Clarity, Fundable, Launchrock, and Zirtual. He started his first company at age 19 which grew to over $700 million in billings within 5 years (despite his involvement). After that he launched 8 more companies, the last 3 venture backed, to refine his learning of what not to do. He's a seasoned expert at starting companies and a total amateur at everything else.