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I've been asked many times why we built cleverbridge in Chicago and not on the West coast, where the majority of our future clients were. Since first answering this in 2005, my reasons haven't changed, but the list has certainly grown as our company, and this city, have changed.
I started cleverbridge with some friends/former co-workers in 2005. There was one big issue: I was the only American and the rest, 6 to be exact, were German living in Cologne, Germany.
From the beginning, it was clear that we would be a Germany headquartered company, but we wanted to be perceived as a global organization from the beginning rather than have to change people's perceptions later on. Perception is a difficult thing to change when people think of you in a certain way, which was a valuable lesson learned at a previous company and that I'll write about in the future.
Although I was a native Chicagoan, by way of Bensenville, there was an opportunity to pick up and move to California at the beginning without it being a major disruption to the business. However, we chose to build in Chicago for a number of reasons:
1. Lower costs - Our first office was a 300 square foot space that cost about $600 a month. Today, 1871 offers something even more attractive than what we had, but to start out, that was a very reasonable cost.
2. Great talent, reasonable cost - Once we started hiring, we were finding really motivated and sharp people that wanted to work for an e-commerce company, not only for the job, but also for the career path that we would set them on. In California, companies are competing with Facebook, Twitter, and Google for the best talent and that free market thinking results in more outrageous costs all the time.
3. Existing support structure - Obviously being a Chicagoan, I had a support structure that I could call on in a pinch to help out, whether that was one friend answering phones for a week while I was in Germany or another friend shipping boxes from my house while I was at a tradeshow for 3 days.
4. Central positioning - While there's a 7 hour time difference to Germany, there's a big difference to having 2 hours of workday overlap each day and having none, which is what would have happened had we been based in California. For us, working with our other office each day was critical to workplace success since those California clients would take 4 years to materialize, but personal bonds were built across an ocean well before it was critical.
5. Employee attitude - I've seen what goes on in California and Midwestern attitudes towards hard work, loyalty and trust are intangibly important for an entrepreneur to build a successful business. Does your key salesperson come to you and talk about the recruiters hunting him down or does he stay silent, always listening for the best offer and then jumping after 1.5 years?
There is certainly a case to be made for starting in California, or any other place for that matter, but looking back I wouldn't change our decision at all. In fact, we hired our first California employee after 7 years so now we have the best of both worlds!
