I can’t claim that I remember everything from my Economics 101 class – it was more than 20 years ago, Yikes!- but there was an analogy about lemonade stands that has stuck with me.
As I recall the lesson goes like this: There is busy beach that stretches for more than a mile and in the middle of the beach is a single lemonade stand. It is hot, the beach is crowded and the lemonade entrepreneur, Joe, is very successful. Lucky Joe.
Then along comes Julie, another entrepreneur. Julie also makes great lemonade. When she sees the number of customers on the beach, she thinks “I’m going to open a lemonade stand here too!”.
So here’s the question … “Where on the beach should Julie open her lemonade stand?”
As I recall, my Economics 101 classmates discussed the relative merits of either end of the beach, wondering about details like bathroom locations and sand quality. The logic was that customers would probably select the closest stand, so she should just pick the end that she liked best, and find the underserviced customers that didn’t want to walk to the middle of the beach.
If you also took this course, you might recall that the right answer is this: Julie should open up her business directly beside Joe. She’d then have the same access to ALL of the customers on the beach. She has to compete head to head with Joe on quality, price, and service, but Joe seems to have become too comfortable with his monopoly and she is confident she can do better. The lemonade quality improves for everyone and the best business wins.
I’m sure there are some other important economic lessons in this story, but for me this is a story of accessing talent.
Joe and Julie are now tech entrepreneurs who are each building a company. Their customers are all over the world, and they are reached virtually, so office location isn’t a factor for sales. But both Joe and Julie know that they need the best people to fuel their success, and they plan to grow a lot.
So where should they build their office?
Like selling lemonade on a hot beach, our tech start-ups are wise to set-up in the heart of a community that is densely populated with the talent they need. In most cases this means engineers, but it could also mean top executives, sales and marketing pros. And if you want talent with experience in your specific technology or domain, opening up right next to your competitor is both gutsy and wise. When someone is already in the middle of the beach ready to buy lemonade, there you are, with a more appealing front counter, a more delicious offering and a big smile. The best team, mission, culture and environment will win.
We see this happening in Waterloo. Not the biggest city, but you can’t swing a stick without whacking a few software developers and fearless tech leaders. And as competition for this talent has increased, we see our entrepreneurs getting more creative in how they vie to become the top employers. We also see international tech companies taking notice and popping up new offices in our midst. We welcome this growth and this increasing competition for talent. With it comes better work environments, more focus on culture, balance and engagement, and much better lemonade.