Today, we signed a new lease that will significantly expand our office space in The Philadelphia Building at 13th and Walnut. This was not a decision that Jake or I took lightly. 2011 brought with it a number of strategic opportunities, including offers that would have involved moving our company to New York or Silicon Valley.
We turned down those offers and we’re doubling-down on Philadelphia. Not because it is the path of least resistance, but because it is the right path. We believe that Philadelphia is the best possible home for our start-up. Here are five reasons why.
1. Philadelphia is a Lean Startup’s Paradise
From day one, we were able to acquire actionable information faster in Philadelphia than we could have elsewhere. How is this possible? It’s simple math: time is money and it costs less to do business here. Rent is lower. Beer is cheaper. I live comfortably on a salary that would have me sleeping in a broom closet in New York. With a fixed budget, we’ve been able to conduct more tests, iterate more frequently, and get smarter faster — all without prematurely raising capital.
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This effect is amplified when you remember that we sell a hosted product in a world that gets flatter by the day. RJMetrics has customers on five continents, but our physical location has no bearing on what we charge them for our product and what it costs to deliver. This leads to higher margins and more money invested back into growth.
On a budget that would be razor-thin in many other cities, we can provide our employees with a world-class working environment, top-notch benefits, and some of the most compelling personal development opportunities in the region. This is helping us create Philly software jobs that tap into our city’s tremendous pool of local talent.
2. Philadelphia is Rich with Talent
Yes, there are a higher number of talented developers in New York and Silicon Valley than in Philadelphia. But it’s important to remember that competition for those developers is proportional—big companies will open their doors anywhere they can find clusters of talented people. For example, I wasn’t surprised to see Facebook’s recent decision to open a development office in New York (although I said a prayer for my friends who are running startups there and already competing with each other, the banks, and Google for new hires).
There are plenty of excellent developers in Philadelphia, but it is admittedly a smaller pond than other major tech cities. Developers do not gravitate here, but there are a lot of them here for personal or circumstantial reasons. We have found that population to be rich with ambitious, talented people.
Our proximity to leading universities like UPenn, Princeton, Drexel, and Villanova also allow local companies direct access to top-notch engineering grads. Many of these talented engineers are “in play” every year. As we’ve grown, we’ve seen an increasing level of success with university recruiting.
There are also a number of large technology companies in the area (from Comcast to Oracle to SAP) who have sizable technology teams. Professional recruiters are proactive about syphoning candidates out of these larger companies, and many startups like us have had success tapping into this pool of talent directly as well.
Overall, I would say that the caliber of talent in the Philadelphia area is strong and the landscape of candidates is proportionally lower-volume and lower-competition than in other cities. In other words, the inputs look a little different but the absolute yield is comparatively attractive. We are building a world-class technology team here and see plenty of runway ahead of us.
3. Philadelphia’s Startup and Technology Communities are Thriving
In my opinion, the diversity of the organizations in the Philly tech community is a great thing. They allow a widespread population of technologists to each find a voice that works for them. For the most part, these groups peacefully co-exist and share the common goal of making Philly a more awesome place for tech and business.
As these organizations continue to evolve and collectively impact the local economy, I think the pieces are moving into place for a coalition of tech players to exercise greater influence on local politics and work together on initiatives to raise outside awareness of the broader Philadelphia tech community. Today’s appointment of Bob Moul to the presidency of Philly Startup Leaders is evidence of this progress. Stay tuned.
4. Philadelphia Companies Have Capital and Strategic Options
And doing business from Philly is easy. We have a major US Airways hub that provides easy access to the west coast and Europe. We also have extremely close proximity to New York, Washington DC, and the rest of the the eastern seaboard.
Recently, Philly has seen big exits like Invite Media (to Google), Boomi (to Dell), and MyYearbook (to Quepasa). We have also seen major investments made into companies like Monetate (from First Round & Openview) and DuckDuckGo (from Union Square). Don’t be surprised to see more announcements like these soon.