Tom Nies: Location is everything Featured

7:00pm EDT November 30, 2012
Tom Nies: Location is everything

Do you have to start your company in that “trendy” city, or is your hometown just fine?

When Cincom was founded in 1968 in Cincinnati, there was no Silicon Valley. No one questioned why we founded the company in an area that might not be considered “trendy” for the software industry because it was just beginning.

As I was deciding to leave IBM, Tom Richley and Claude Bogardus and I looked around at the landscape of the city and found that there wasn’t a software presence in Cincinnati. I’m a Cincinnati boy. I grew up here. I have an undergraduate and graduate degree from the University of Cincinnati. This is a great city — so we decided to focus our efforts on serving clients here.

Great benefits

Looking back from a logistics and marketing opportunity standpoint, we probably could not have picked a better city to be in than Cincinnati.

Since there weren’t many alternative software employers nearby, Cincom was able to get the best and brightest employees who wanted to work in the industry and remain local. It was easier to recruit top graduates from local universities, and we were able to invest heavily in our people because we knew we were all dedicated and committed to our company.

And the cost of living is tremendously favorable compared with places such as New York or Silicon Valley.

It also made sense in terms of geographical location. We could be in Detroit, St. Louis, Pittsburgh and Cleveland within an hour and Atlanta in an hour and a half by flight. We could easily drive to Lexington, Louisville, Columbus and Indianapolis.

This so-called “rust belt” had a heavy concentration of early clients. We were no more than an hour and a half away from maybe 70 to 80 percent of the manufacturing industry.

Even when we expanded to Europe, the Concorde allowed us the opportunity of express travel to our offices and clients abroad.

Limited disadvantages

Of course, there were some disadvantages to being located in Cincinnati, too. Early on, a lot of marketing and promotion of the software industry began to centralize around Boston with some magazines and consulting and industry adviser groups located there — a lot of them still have a presence in the city. It seemed, to us, that these groups heavily promoted the Northeastern-based software firms.

The same thing happened when software companies sprang up in Silicon Valley as the media, consultancy groups and attention concentrated on covering the firms in that area.

Cincinnati has never received that same kind of attention for software, which has been a liability for us in the past. However, this became less of an issue as more work began to happen online.

With today’s technologies, it is not as important to be located in the trendy city for your industry. Companies can compete from anywhere because they can connect with customers from anywhere.

Location, location, location

If you’re thinking of founding a company or expanding a business, it’s important to think of three things. Where will you be happy? What are the unseen advantages of this location? And are the perceived disadvantages surmountable?

As I said before, I’m a Cincinnati boy, and I know that this is a great city to raise a family so I knew we would be happy here. Even today, the advantages of being headquartered in the Midwest are great for our customers and prospects for reasons that a lot of people might not think about.

We’ve found that we can counteract the disadvantages of not being as exposed to traditional media and analysts by having a dedicated team of professionals focused on self-publishing and getting our name out there even though we aren’t located in the trendy area.

So is Cincinnati perfect for Cincom? Not quite, but it’s close and I know that in my opinion, and the opinion of many who work for Cincom, it is the right city to be in. <<

Thomas M. Nies is the founder and CEO of Cincom Systems, Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. Visit tomnies.cincom.com/about/.