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Building outside of the Bay

Teja Yenamandra

Jan 30, 2017 1:00:00 PM

If you've taken a look at our philosophy page, you're probably aware that we're strongly biased in favor of remote arrangements. We also think that as the cost of building companies goes down, more locations around the world open up to become awesome start-up hubs.

That's why we spoke to David Ledgerwood, COO of SouthernAlpha and Jumpstart Foundry, and got his take on Nashville, TN and its attractiveness as a destination for start-ups. Here's a distillation of our conversation: What's your take on going out West vs. building in Nashville?

David: From the standpoint of Jumpstart Foundry, we’ve taken the attitude that we should provide the best of both worlds - so we’re based in Nashville and we’ve opened up an office in Silicon Valley and partnered with nestGSV to provide an on-ramp for our start-ups. We do a rotating tour of duty when companies are ready to take advantage of it.

I don’t think there’s any reason you can’t do a start-up successfully pretty much anywhere. If the fundamentals are good and you are reasonably good at networking you can draw the attention you need and generate cash flow that supports either investment or bootstrapped growth. What does the Southeast offer start-ups that can't be found there?

David: I was just talking to a veteran SV entrepreneur with several exits under her belt, going all the way back to being an early employee at Netscape. Her opinion was that the start-ups in the Southeast have to answer real business needs for real industries. You don’t find too many entrepreneurs here trying to find a better way to share pictures or chat via mobile. I love those things too, but I think in many ways the bar is higher in the Southeast. No one’s getting a check for $50M to start the next no-revenue Facebook acquisition target. We’re creating really strong companies in traditional industries like logistics, healthcare, education, employment and more. What factors should a start-up consider when selecting a home-base?

David: If you’re serious about scaling and staying put while you do so, you do have to make sure you can put together the resources, naming talent and money, to grow. I think there are legit concerns around those two points that need to be addressed in communities off the coasts, but I also think the dearth of talent and capital is a cute narrative that doesn’t hold water 80% of the time. We’ve got broadband, amazing weather, and our money goes twice as far as on the coasts. What’s not to love about that? What makes Jumpstart Foundry, and Nashville, different from other incubators?

David: Jumpstart benefits from more than 100 mentors who aren’t just window dressing. They get down in the trenches and roll up their sleeves while also opening their contact databases to our startups. Whatever a team needs we can make a call out for it and some member of our mentor core will reply nearly immediately. Plus I think there’s just an attitude of discipline here. It’s about working a ton of hours and spending as many of those hours as possible on really smart work. All entrepreneurs work hard but I’ve never seen so many together working so hard in friendly competition as I have at Jumpstart. Our founders created a healthy competitive but supportive environment that makes the most of the time. We’re also not afraid to get boot-camp serious. Are investors from SV looking at the Southeast for better investment opportunities? If so, why?

David: I’ve been told there are economic reasons for SE investment from the coasts. First of all, the capital goes a lot farther. The cost of living and doing business is so much better. That makes capital go farther so multiples don’t have to be as high to get a great ROI on the investment. Furthermore, entrepreneurs in the SE don’t take capital for granted so we’re natural boostrappers. We don’t expect someone to drop a check on us unless we’ve got the team, talent and plan to return an investment on that money. What are the cons of launching a start-up in the Southeast?

David: The same as the strengths. You have to work harder for money, talent, and longevity. There’s no easy ride. You might go a long time without paying yourself. It’s trial by fire. The good thing is there’s generally a robust economy around you to pick up a job once in awhile if your ramen fund runs low.


This is admittedly an investor-centric perspective, but these are important points to consider if you're trying to get shit done and ship awesome products in an enduring way. What's clear to us is it's much, much easier to bootstrap and get a handle of your business in any place other than SF/SV. Had we been based there, we probably would've been forced into fund-raising way too early since our personal burn rates would've been much higher. That would've created an immense pressure on probably inefficient systems, which would have been very, very bad.

Team's probably not the best positioned to dispense start-up advice, but there's real meat in what David's saying -- live somewhere you can live cheaply so you can be disciplined in figuring out what the fuck it is you really want your company to do.

David Ledgerwood's can be reached on Twitter here. Check out SouthernAlpha, where he's COO. They write cool shit. And Jumpstart Foundry, where he's also COO! They build great, lasting companies.

Written By:

Teja Yenamandra

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