The Geography of Innovation: Why Location Still Matters
Understanding why geographic clustering still provides advantages for building companies despite the rise of remote work.
The most important advantage that certain locations provide is network effects. The value of being in a particular place increases with the number of relevant people who are also there.
When you are in a place with high density, serendipitous encounters happen, information flows faster, and feedback quality improves.
While remote work has enabled companies to hire globally, talent is not evenly distributed. Certain cities have much higher concentrations of people with specific skills and ambitions.
While venture capital has become more distributed, it remains highly concentrated in a small number of cities. This matters because fundraising is still largely relationship-driven.
Remote work has made location simultaneously less important and more important. Less important because you can hire globally. More important because the advantages of being in the right place have become more concentrated among those who choose to be there.
