4 Reasons Why Chattanooga, Tennessee is Home to this Y-Combinator Company

I recently had the chance to catch up over the phone with some of the Co-Founders of Ambition, a startup that created and markets a sales competition, analytics, and reporting platform.  Ambition graduated from the Winter 2014 class of Y-Combinator where their peers voted them one of the best startups in the entire class.  Yet, I didn’t call the Ambition team at some office in Palo Alto or San Francisco.  In fact, after graduating from Y-Combinator, the Ambition team flew all the way back to the Southeast and planted their roots back to a city they were already quite familiar with — Chattanooga, Tennessee.

It’s true that they’ve felt the pressure that many other startups feel to stay within Silicon Valley — especially from potential investors.  But it was no matter for the Ambition team.  They knew that the best place for them to run their business was back in Chattanooga — away from the typical Silicon Valley “startup noise” and in a place where they could roll up their sleeves and actually do work.  It’s not to say the decision was easy.  They felt the undeniable energy that Silicon Valley has when they lived there during their time at Y-Combinator.  But they don’t regret their decision — and they’re quick to point out that not one customer (and yes, they have quite a few) has pulled back simply because their headquarters isn’t in northern California.

So, why Chattanooga?  For Ambition, the reasons were plenty:

1.  It’s home to the Lamp Post Group.  While the Lamp Post group might not have the same name recognition as Kleiner Perkins or Sequoia, its people were what stood out to the team at Ambition.  In many ways, they took Ambition’s co-founders under their wing and were supportive of them years before Ambition ever even came to fruition.  Ambition isn’t alone in appreciating the support of the Lamp Post group, either.  Its portfolio now boasts a number of innovative companies, including popular tech news source, Pando.

2.  Ambition is now a top-option for great talent.  Competition for talent is brutal — especially in Silicon Valley where you’re not only competing with other startups, but also the likes of Google, Facebook, and other tech giants.  But with Georgia Tech, Emory, University of Tennessee, and dozens of other universities within just 150 miles of Chattanooga, the team at Ambition doesn’t see a lack of talent in their neck of the woods.  And because they’re now one of the most publicly visible technology startups in the area, they’re a choice employer — not a fallback plan.

3.  The living is easy.  San Francisco and the surrounding areas can be a nice place to live… if you can afford it.  These days, not many people can.  San Francisco has quickly become the least affordable place to live in America.  The median sale price of a home in San Francisco is close to $1 Million — which is a huge barrier to those looking to stick around for a while.  Chattanooga hasn’t quite felt this real estate crunch in the same way.  The median sale price of a home is more than 7x less — at just $134,000.  So while a new developer may need to split an apartment three ways out west — they can buy their own house in the south… and still have plenty of pocket change to go out on the weekend.

4.  They can get to work.  It’s true that the serendipity that exists in San Francisco and Silicon Valley can be helpful.  A morning coffee meeting can lead to a connection that — by the end of the day — results in a hard-to-get meeting with a potential investor.  But sometimes, those coffee meetings can be a bad thing.  After all, investors didn’t invest in a series of coffee meetings.  They invested in a company.  While it’s good to get out and network, the team at Ambition found that they can actually concentrate on their business better in a place like Chattanooga than back in Silicon Valley.  After all, they are running a business.

Y-Combinator allowed the Ambition team to experience Silicon Valley and build up a great network.  And yes, the team believes that it was a positive experience to spend time there — and plan on visiting quite frequently.  But when it comes down to it, they know that their business’s success isn’t dependent on location.

So for now, they’ll hum along to “Rocky Top” and get back to work.

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  • JT Tan

    Great post! But I’d say they actually did choose location as a part of their success strategy for precisely the reasons you laid out. Not every place has these things, but these things were important to them. They also felt sufficiently exposed given their experiences, and in TN they can access the best of both worlds.