hubballi iitkanpur alumnus divyesh shah spent a decade at texas instruments in bengaluru designing computer parts before the entrepreneurship bug bit him but after two years of setting up his automation solutions startup linkez technologies in the city he chose to move to hubballi about 400km from bengalurubengaluru was getting crowded and my mentor put me in touch with deshpande foundation an incubator in hubballi says shah after spending the first two years struggling to find customers in in bengaluru shah moved to the industrial town of hubbali last year a perfect fit for his industrial automation startupshah isnt the only one making the shift out of indias silicon valley to the small towns of karnataka entrepreneurs are finding it cheaper to operate out of tier2 cities such as hubbali dharwad udupi and mangaluru where both operation costs and the cost of talent is loweras competition in bengaluru increases these startups are finding customers in smaller towns while hubballi is home to a number of startups that provide services to industries the udupimangaluru belt is known for android developers and companies providing it servicesnaveen jha ceo of deshpande foundation says the need to move out of cities arises mainly if the business is concentrated on smaller townsfounders need to be near the problems they are trying to solve it might get difficult for them sitting in bigger cities says jha the deshpande foun dation runs sandbox startups an incubator in hubballi karnatakas second largest city founders of agritech startup nanopix sasi dekar krish and b suchitra moved to hubballi from bengaluru seven years ago the company produces a grading machine for the cashew industry krish an iitmadras alumnus and former wipro employee moved to hubballi to join sankalp semiconductors and chanced upon deshpande foundation which gave him the initial investment the biggest clients of nanopix which has revenues of more than 4 million are cashew manufacturers in mangaluru and karkalarohan kulkarni founder of freshboxx an online platform that delivers farmfresh produce to individulas and restaurants moved from bengaluru to hubbali in november 2015the bengaluru market was saturated and filled with players that were burning cashhubballi is called the capital of north karnataka so it made sense to move kulkarni saysinternet connectivity talent are all you need for a startupworking out of smaller cities comes with its own challenges the main ones being lack of resources and expertise the city doesnt have an international airport so it becomes difficult when we have to send materials somewhere says kulkarnilinkez had trouble getting customers in the first two years and making them aware of automations benefitsus mahendar and ml gowda founders of hatti kappi a bengalurubased franchise that sells filter coffee started in has san but moved to bengaluru in 2004 we had to make the move to find our market but its different now entrepreneurs from small town dont need to come to bengaluru they have enough resources in their own city and they should set up in their hometowns