Nowhere is the growth of the economy more apparent than in the world of startups. Particularly out in Silicon Valley the jaw dropping expenditures of startup companies are making some people nervous. Many are seeing a parallel with the dot com bubble of the 90s, where money gushed into tech companies until the bubble burst, and all the money evaporated seemingly overnight.
There are several concerning aspects to these ostentatious expenditures. Obviously, cost is one of them. Today in San Francisco’s chic South of Market area, average rents are approaching $56 per square foot for commercial space. More than cost however, the length of lease terms is concerning. Startups with just a few employees are securing 10 and 15 year leases for significantly more space than they need, with the intent of growing into the space. Those reminiscent of the dot com boom and subsequent bust shake their heads at these decisions.
Pragmatic startups would be wise to conserve their newly won seed financing and locate themselves in more reasonable markets. Gainesville, for instance, boasts several advantages. Most importantly would be the proximity to a robust research university firmly planted on the global stage. The University of Florida is very startup friendly with projects such as Innovation Square, the Florida Innovation Hub at UF and Progress Park. What’s particularly exciting about Gainesville is the price of this proximity. With average rents less than half of San Francisco’s, and a very attractive cost of living, Alachua County provides some very compelling reasons for startups and tech based firms to reside.