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This article was published on September 16, 2017

Don’t start your business in a tech hub city

Don’t start your business in a tech hub city
Boris Bogaert
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Boris Bogaert

Boris Bogaert is the CEO and founder of Xpenditure Boris Bogaert is the CEO and founder of Xpenditure

We often make assumptions about a tech company’s culture based on where it’s from. Valley startups are perceived differently from those in London, which are seen as different again from those founded in Amsterdam, Berlin or Paris.

It’s not hard to find information about the competing merits of starting a business in different locations, and we assume that the surrounding culture of the tech hub becomes absorbed into the business itself.

To be fair, it probably does. This isn’t always a bad thing. Tech hubs bring with them a feeling of momentum and an ecosystem — huge talent pools, meetups, events, chance encounters. They also attract investors eager to part with their capital (but for the right pitch deck).

So with all these advantages why would you attempt to build a fast scaling business far, far away from a tech hub? Surely it’s insanity?

It’s not. In fact, building a company away from the established tech hubs brings benefits that I think far outweighs any negatives. Founders basing their businesses away from tech clusters can create a culture and a team that can be just as strong, or even stronger, than competitors in London or Silicon Valley.

Where to start

As a native of Mechelen, a small town about an hour’s train journey north of Brussels, I had to think long and hard about where to base my startup. Do I go for London, with its concentration of investors and established community, but sky high rents and cost of living? Or Berlin, with its low cost of living but, at that time, comparatively few financial or business technology companies?

I settled on neither, and got to work building the company in Mechelen, a town within easy reach of Brussels, Leuven and Antwerp, and cheaper rents than all three. I wouldn’t change it for the world, and it goes far beyond the availability of a few home comforts or cheaper office rent.

Blank slate culture

Establishing a business far from a tech hub means you’re faced with something of a blank slate. You have no surrounding tech culture or community to work with and you need to create something truly different in order to attract people to move their lives to work at your company.

How would we convince people to move to a small town in Belgium? Surely they would just choose London, or Berlin, or Paris? The list of European hubs is long. Mechelen isn’t (yet) on it.

We focused first and foremost on the culture and we looked to attract people looking to move somewhere truly different and perhaps a little unusual. Someone willing to meet new people and embark on something of an adventure (alongside a healthy appreciation of Belgian beer). As luck had it our hiring process became self-selecting.

It turns out these were the exact attributes that work to create a really vibrant and exciting culture. The kind of person that is willing to take a risk and move to Belgium is the exact type of person that thrives in our company. Our company culture may have started as a blank slate but we allowed our employees to get to work creating it — from the bottom up.  

We set out to make a real melting pot. We actively tried to recruit as diverse a workforce as possible, and we now have over 70 employees from over 14 nationalities, including amazing people from as far away as New Zealand, the USA, Turkey and Morocco. We looked not just for skills but for people’s values. Skills you can teach, but values tend to be fixed.

It’s meant that we’ve brought a huge array of different experiences and points of view to our Belgium home, but everyone is bound by a common outlook on what’s important in life.

Hiring solely from one tech hub (if you’re based in London, you’re probably getting people who have worked in South East England for some time) means that you’re hiring people who may have a certain pre-conceived idea of what company culture should look like. But by hiring people from all over the world, we’ve been able to cherry pick the best aspects of company culture from across the globe.

Retention is key

It also means that new recruits come to us dedicated and motivated from day one — potentially much more so than new hires in tech hub-based businesses, where employees know they can jump ship at any point. Retention of top employees is one of Silicon Valley’s toughest problems. Google is one of the worst offenders, with an average employee tenure of just 1.9 years.

By bringing people to Mechelen we’ve already asked them to sacrifice a lot. They arrive recognising that the commitment they’ve made to us is significant, and they are hungry to succeed and justify the move.

It means we hire people who have no intention to just leave after six months or a year. Those that join us really believe in our mission, and work seriously hard.

But it’s a two-way street. Companies looking to make it work away from tech hubs need to avoid a cliquey campus feel, and create a real sense of inclusivity and togetherness. Office socializing becomes more important, and team building is crucial. In essence you have to create a family environment — supportive, but allowing disagreement and debate so people feel their voices are being heard.

It’s also easy to get wrong. Hiring has to become a much longer and more involved process, and a bad hire can have a disastrous effect. It’s essential to allow the culture to develop organically, but the management teams have to have a real ear to the ground, making sure that the team is happy and working well together.


So what are the downsides of the non-tech hub startup? As much as we’ve managed to hire some amazing people, we’re growing quickly and attracting talent remains a challenge. Unsurprisingly, Mechelen doesn’t have a particularly strong pool of talent. A company based away from a tech hub needs to be even more creative with its HR strategy.  

Related to this, there’s not much in the way of networking with peers, although other companies have started to spring up in the area and we send our people to lots of events and meetups (some in even more glamorous locations that Mechelen).

We also probably have a more limited selection of bars and pubs to hang out in than, say, a startup in Silicon Roundabout in London — though Belgian beer more than makes up for it, and it’s cheaper.

Aside from that, we really haven’t seen a meaningful downside. Investors are willing to travel if your company is seeing success, and the European tech scene has a near-constant calendar of events that means you never feel cut off from the wider community (we would, of course, recommend the fabulous TNW event in Amsterdam).

So is it really essential to be based in a famous tech hub? We don’t think so. ‘If you build it, they will come’ says the famously misquoted line from Field of Dreams. Well that’s only true to an extent. If you build it, make it inclusive, focus on hiring the best people, and allow your employees to create a culture from the bottom up, they will indeed come. Not as snappy, but, we think, true.

So I would encourage entrepreneurs to not worry too much about where you start your company. A good idea is a good idea wherever you are.

If you’re ever in Mechelen, come and see for yourself. We’ll buy you a Belgian beer.

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