Do businesses have an obligation to shop from local startups?

I hear complaints that established businesses need to support the local startup community. Startups say the best way to help is to buy from them -- even when they're not the best choice.

It may sound strange coming from an investor, but I think if a business buys from a local startup solely because they are in the same town, it is doing a disservice.

It's counter-intuitive to think this way. Surely having a customer is a great thing for an innovative business?

Not always.

Not all customers are created equal. As a startup, you're an organization learning rapidly about your market. If someone buys from you for the wrong reason, what does that teach you? You just learned the wrong things.

It's hurtful to the growth of the startups and community.

So, yes, businesses should consider local first. But, startups should stop expecting hometown businesses to be their customers. Focus on being the best at what you do for the global market.

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