The Tyranny of Distance, Or Is It?

This post is quite an appropriate one for CloudAve. While our editor-in-chief
resides in the US, we have an editor on a big lump of rock in the South Pacific,
writers in Seattle, Israel, the Antipodes and India and some research help
spread around the globe. We're living proof (we hope) that a dispersed team
isn't a barrier to success, and that being "in the Valley" is no longer a
prerequisite to being connected in tech.

A recent post by the CEO of Xero
got me thinking about where in fact one needs to be located. In his post Rod
contended that;

I don’t think web 2.0 companies need to be [in The Valley] anymore. If you
can get funded outside of the Valley and if your market is really global then
Web 2.0 is not as dependent on the Valley as early technology models
were

Looking like you're in The Valley – Important or not?

A more important discussion however is the one around perception. I have a
friend who founded and still runs a New Zealand based SaaS business – it would
however be virtually impossible for an outsider to know that he is based in New
Zealand – apart from the usual .com URL, his phone numbers are US local and his
website makes no mention of New Zealand. He is adamant that to succeed selling
software into the US, you need to appear to US potential customers to be a US
company.

While other contend that being from "down under" is a quirky little point of
difference that, all things being equal, help a business clinch the deal – he
believes that especially when doing business with US customers, the perception
of proximity is crucial, never more so than in initial stages.

As a startup there is no way we could have gained traction had we obviously
pushed our New Zealand origins. For an existing player with scale or credibility
this may be less of an issue – but for a start-up it's critical

This conflicts quite a bit with Atlassian, a company gaining significant attention both in
their home-country Australia, but also in the US. Taking a look at Atlassian's
website, there is no doubt that they're an Australian business. They sell
software via an Australian business, their primary inquiry phone contact details
are Australian and their business is run out of their Sydney base. I wondered if
his was an anomaly of whether, in this 2.0 world, it's ii fact ones product that
is most important, rather than one Silicon Valley credentials. I sent an email
to Atlassian founder Mike Cannon-Brookes and in what can only be described as a
completely typical Australian response he started by addressing me;

Mate!

(!) Of course there's more but this in itself indicates a different sort of
culture from the hyper-exuberant Californian norm. Mike went on to say;

it really is mostly dependent on your business itself. Any gross
generalisation like that is usually false. You can certainly succeed within the
US from outside if you have the right business. Can you be purely outside? Do
you need any presence? How large should that presence be? Those are different
questions

Mike's answer raises more questions than it answers. So clearly there is a
conflict here – on the one hand people claim that a Valley feel is critical
while others see it as being less important. What do others out there think?

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Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. His business interests include a diverse range of industries from manufacturing to property to technology. As a technology commentator he has a broad presence both in the traditional media and extensively online. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

More about Ben here.

2 responses to “The Tyranny of Distance, Or Is It?”

  1. Devan

    As long as your software/service can meet a real need, then I don’t think it really matters where you are based. I think the opposite is starting to be true, whereby international users are getting irritated at totally ‘US centric’ websites.

    I personally am tired of sites where I go to pay, only to stymied by ‘invalid zip code’ or ‘invalid phone number’ errors when they do not recognise non US specific information.

    Yes, there are other countries our there, as there are other centres of development outside of The Valley that can produce stuff.

    As long as you can show respect for international cultural and locality requirements in your software, then you will be welcomed by one and all.

    I think the playing field is levelling out, and so it comes down to the provision of excellent services as opposed to locality…mate…

    Devan (Australia)

  2. Lee

    I think that proximity for some implies a correlation to degree of service. If you are located in the US, and the company is in the US, you are more comfortable should a problem arise. This way of thinking can be seen by companies outsourcing their service centers overseas, like to India. US companies that do that don’t put on their website or advertising, “Hey, our service center is India.” Just my opinion, :)