Best places for bootstrappers to live

Let’s face it, for most of us on this board, we can run our companies from just about anywhere, as long as there’s a good Internet connection nearby.

But the cost of living differs dramatically, depending on where you live in the world.

When we were moving a few years ago, we were debating whether it still made sense to remain in New York, one of the most expensive cities in the world, and, financially speaking, probably one of the worst places to bootstrap a software company. We chose to stay because of family, but it was probably not the best choice financially.

The realistic amount of annual revenue needed to raise a family in New York City (lower-to-mid middle-class), is about $100k. An average 1/4 acre, single family house, in the suburbs, runs about $300k-$600k. You also have the mandatory health insurance, car payment, etc.

But if one can make X in New York City, running an Internet company, one can make the same X anywhere else, where (assuming personal safety and political stability remains the same), the cost of living is much lower. For example, from my own rather naive source (HGTV), you can buy a similar house in Texas for less than a quarter the cost of the same size house in New York - and they don’t have personal income tax, from what I understand. In the 90’s, this was one of the reasons Carmack moved id software there; and there is, in fact, a fair collection of software companies in Texas. Peldi from Balsamiq moved his family to Italy when he decided to start the company.

We have folks all over the world on this board. What’s the typical annual cost of living where you are, for a family of 4, let’s say (lower-mid middle class)? What is it like to bootstrap a company while living there? Have you heard anyone recommend other great places around the USA, or around the world, where bootstrapping a software company would make good sense financially?


Are you taking into consideration places like Vietnam (advocated by folks of Tropical MBA fame)?

P.S. I’m in Toronto, Canada. I spend about $7-8K/mo (2 cars, 2 kids).

I opened the topic more for the community than myself. I think we’re settled here for a while. I’m not restricting responses to any place in particular; just would be nice to hear some first-hand experience from people in other places.

Texas dominated this list of best places for small business, but the Raleigh, NC area was also on the list. Raleigh was also voted the best place to live in 2012 by Businessweek. This business friendliness survey rated NC a B+.

The Research Triangle Park area of North Carolina (“the Triangle”) includes the cities of Raleigh, Durham, and Chapel Hill. The Triangle is home to many colleges and universities, and many technology-based employers have offices here. To bootstrappers looking to start or grow a business, my pitch would be that the area is a nice place to live and awash in technical talent and work. If you need someone with a specific set of technical skills, or you need to do some contract work to tide you over, probably you can find what you need locally. There are meetup/user groups for many technologies and some for startups. Due to the universities and technical jobs, the area also has people from around the world, so if you need something translated, again, probably you can find someone locally.

North Carolina does have income tax, but it was recently reduced to be more in line with surrounding states. According to some online calculators, cost of living in Raleigh could be about half as much as in the NYC area. The median house price in Raleigh is $200,000. There is limited public transportation, but realistically you will need a car to get around.

Business Link North Carolina can tell you what paperwork you need to fill out to start a business in the state. There is also a chapter of SCORE which can help as well.

We’re in the UK. I keep plotting our escape, it’s not a great place to run a small business. Dublin is becoming popular as a tech hub, lower taxes and they are in the Eurozone (this is relevant to us as currently we have to manage accounts in GBP, EUR and USD). Berlin also seems quite a nice place with a lot of tech companies relocating there.

I wouldn’t recommend Belgium. It’s very high taxing (personal income tax gets up to 45%+ very quickly) and there’s lots of red tape. Heard someone recently say that Luxembourg is a better option for incorporating. If you’re travelling very far, though, there are probably better options.

Australia is better. Still high taxing compared to the US (or Vietnam), but there are some decent government rebates that seem to be quite easy to get (45c back on the dollar for all your R&D expenses).

For me, I need a “Dummies guide to international corporate structuring and tax minimisation”. I’m already incorporated in Australia, and I’m thinking about incorporating in the US just because it’s easier & faster to incorporate in the US and sign up with Stripe than it is accept payments in Australia. Then, at some point I really should figure out whether or not I need to incorporate here in Belgium or not… (please, god, no.)

I’ve been wondering how possible it is to setup a company somewhere other than where you live. So I’d be interested in understanding how that works. Not for tax dodging purposes but in the UK they keep twitching about pulling out of Europe and if that were to happen it would be a very good idea to have the company based somewhere in the Eurozone.

I haven’t managed to persuade @drewm yet that jumping ship to Dublin or Berlin is a good idea!

Through an agent. E.g. a local legal firm that prepares your papers and also acts as an agent. Appropriate annual fees apply.

Example: Cayman Island

@rachelandrew are you thinking of moving everything (corporate-structure wise) to Ireland? I’ve read that this type of arrangement isn’t worth it for earnings below a certain number (which has never been very well defined). I might want to look into this if I launch something successful.

I have also heard about incorporating in Delaware, have any of you considered this? Supposedly US companies tend to prefer dealing with other US companies and this eases things sometimes, is there any truth in that?

We just moved to Berlin and it’s a great city. That said, even though it’s still cheaper than most comparable cities, rents etc. are increasing fast so I would be sceptical of any cost of living comparisons not using very recent data.

To be honest it’s not so much cost of living/tax purposes that are making me consider moving. More the possibility of the UK pulling out of the EU that concerns me. If that starts to look serious I would imagine a lot of businesses would consider shipping out, at least in terms of where they are registered.

I would have thought you need to have a pretty high turnover for the potential savings in tax etc. to be worth the extra hassle, would be interesting to see worked figures however.

Rachel, why is that a concern?

I’m based in The Netherlands but still need to provide the option to pay for my product in various currencies. It is a bit of extra work, and of course there’s the slight uncertainty of the exchange rates, but it’s not that annoying.

I think it will be pretty disastrous for the UK economy if we do pull out of the EU plus issues of travel. Being based elsewhere before that happens may be advantageous.

I really like Columbus, Ohio. We have a great crunchy art / creative scene. Excellent local food/food truck movement and craft beer & music scene. We have really big retail brands (Limited, Abercrombe) and a number of interactive agencies (Ie lots of freelance work)

Startup scene is strong. Two startup weekends a year and various tech and startup meetups every month. Also a number of bootstrappers on this forum are here (myself, @andyjohnson, @alexford, @ryanbattles).

If anybody is in cbus drop me a line anytime and let’s meetup!

I moved from Holland (Amsterdam) about a year ago and traded it for Brisbane, Australia. Cost of living in both places is pretty high, although not as much as London, where I’ve lived for about a year or so.

As a place to be though, both are also really good places to be as start ups. Especially with Brisbane I’ve been quite surprised how many meetups and conferences take place here, given that it’s pretty isolated. Both cities are also super laid back: there are heaps of ambitious people doing crazy stuff, but there is way less of a rat race feeling, something that I did experience living in London (and visiting NYC). People’s main priority is living a happy, mostly stress free life, instead of working 80 hour weeks.

So maybe not the places to save up tons of money, but definitely places to start something new without killing yourself.

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In my opinion where you live depends on what your bootstrapped business(es) focus on. For example the founders of Zapier lived near me (Missouri) but they moved to San Francisco. It makes sense for them to do that because they integrate with the APIs of all the popular companies who have offices in San Francisco.

However for me living in a cheaper place is an advantage. It doesn’t matter where I am while I work on PyroCMS and a second project that I’m working on (not publicly named yet) will focus on clients all over the US.

Look at your location as business overhead:

  • do you need to partner with other businesses that have offices in a certain location?
  • do you need to be in a city that has a particular knowledge base?
  • is it worth paying for a more expensive house and office just to be there?

For 10 years I lived and worked on the CA coast. It was very expensive. Homes in Ventura (where I lived) ranged from $300K to $600K (remember, this is in the late 90s and very early 00s) and homes in Santa Barbara (where I worked) ranged from…well, hell, $400K would barely get you a teardown. A proper 3-bedroom family home in a decent neighborhood wasn’t happening for less than $800K.

Can you imagine waking up one morning and realizing that despite not living in NYC or San Francisco, you owed three-quarters-of-a-million dollars on a 3-bedroom suburb starter home?

Yeah, me neither. So we started looking around for affordable places to live on a developer’s salary (about $80K at the time).

We ended up in the heart of Central California’s farming belt. I never even knew that CA had a farming belt, or that it supplied massive amounts of food for the rest of the country. The home prices were much better (about $150K for the same kind of home that was $350K - $800K on the coast), but there have been tradeoffs.

  1. Local talent. I’m close to Fresno, which has a decent talent pool, but it’s nothing like living in LA/San Jose/San Francisco/NYC/Austin/etc.
  2. The market for consulting work is soft, because a lot of businesses here are behind the times and simply don’t consume freelance type technical or creative work.
  3. Culture shock. Oh my God, the culture shock. I’ve been here for 10 years and I still don’t feel like I fit in.

Now, on to the good stuff.

  1. The local talent issue has been a boon for me in the end, because it opened me up to remote work to a greater degree. Once I had projects to do and I needed talent, going remote was kind of my only choice. Ultimately this helped to push me into the 21st century to a greater degree than otherwise. Bootstrapping is all about finding affordable remote talent.

  2. It’s cheap here! Having a hard time transitioning from consulting to product (ahem)? Having a slow start getting customers on your Saas app? Barely at ramen profitability levels? No problem. This is one of the most affordable areas to live in CA, a fact that saved my bacon numerous times when I lost my job and was struggling to make up the income with consulting work. Living cheap is good for bootstrapping stuff.

  3. It’s outside the bubble. You know what I’m talking about. If you live in San Jose and want to do a software product, there’s a 90% chance you’ll get caught up in the VC chase. How could you not? Out here, there is no VC chase. There’s just you, 500,000 people in the Fresno metro area, and a bunch of small business owners with real problems that need real solving. That’s not bad for a bootstrapper.

If I had to do it all over again, I’d probably bail on CA and move to Austin, TX. But I didn’t, and in all honesty I’m probably stuck here until my youngest goes off to college. But in retrospect, I could have had it much worse in terms of living in a place that isn’t conducive to bootstrapping a business, be it product or consulting.


@JaapRood I’m a EU national too and I have been fantasizing with moving to Australia for some time now. What kind of visa did you apply for and how long did the process take?

I started off with a Working Holiday visa, which is pretty easy to get for anyone from the EU who is under 30 (or 35…?) and lets you stay for a year and work as well. I moved for love, so I applied for a Partner Visa, which may or may not be an option for you. Especially for programming talent I haven’t seen it be too hard to get a residency visa though, there are some people here that have gone that way.

edit: to answer your original question: the working holiday visa got approved within a day or so: standard stuff. The partner visa is a whole other story, but luckily, because I was already in Australia while I applied for it, I got a bridging visa that allowed me to stay while waiting for a decision. Those generally take 6-9 months.

I’m currently in Paris. The city is beautiful, and the tech scene is vibrant. You can go to tech meetups every week if you are so inclined.

The big downside is that the cost of renting/buying is very high. Especially when compared with local salaries. I’m leaving in a couple of months, and haven’t yet decided where I’m going, so this thread is particularly relevant for me.