How much does proximity count?

One of the blogs I track that makes me think a bit is Web Worker Daily. In a post How to succeed for tech entrepreneurs – stroll down University Avenue? the question is raised of whether it’s useful for an entrepreneur to have a presence in a high-tech hub, like University Avenue in Palo Alto (or I suppose any other University Avenue). My answer is “yes, but only once a week.”

I’ve been having recent conversations with Howard Lieberman, who following successful runs at company-building, rented an office on Sand Hill Road (Palo Alto) for a year and then decided to dump it in favor of going virtual. He said that the expense of the office just wasn’t worth it – everything could be done from mobile platforms and you could always get/find a meeting room somewhere.

I agree with Howard’s action, if you are well-enough-known to be able to make connections in other ways. And if you already have some other connections to keep your business alive. And the other factor is that you have to be “in the area” once in a while, so you can visit F2F with backers and customers.

I repeatedly find that if I’m not “in the face” of a customer they can pretty rapidly forget about me. Especially if the product I’m selling is a bit on-the-edge and they don’t quite understand how much they really want it.

As a counter-example to the University-Avenue post, I founded a company in 1980 in San Francisco, and in 1982 we relocated to the China Basin Building south of Market (SOMA). In those days all the action was in Santa Clara and Cupertino, and my 1968 Volvo 142 got mileage put on it like crazy going from SF to the South Bay for meetings – things like a couple of times to pick up Steve Jobs, who in those days did not drive a car, to go see interesting things (like PLATO-IV) at other companies. My company did just fine, even though none of our customers were SOMA – they were all in Chicago and New York, and a couple in The Valley. As long as I saw customers once a month we grew and fluorished. And our VC investors were primarily in Palo Alto, and they loved coming up to The City to meet with us.

Then came MCI Mail (anybody remember it?), and AOL email, and finally AOL got connected to the Internet, and we moved into the current era of tight virtual connections. Now I do most business electronically, but only after I have set things up face-to-face. And I’m still in Palo Alto at least once a week, which gives me the ability to meet with people and stay in their sphere of awareness, which has more than once gotten me work that I would not have otherwise gotten. There’s no substitute for some F2F contact!