Back in 2017, startup communities began cropping up around the country. While Silicon Valley had long dominated the scene, newer hubs were infused with the pep and innovation needed to at least partially steal the crown.
This change is a good thing. Why should those in the Bay Area get all the benefits of a hub? Startup communities have become a critical element for success, superseding traditional assets like accelerators and incubators. According to the Economist Intelligence Unit, networking in a community was essential to success for 78% of startups.
“These startup community organizations have developed from a desire to exchange ideas, get assistance, and tap into a support system to help get through the barriers and challenges on the horizon,” says an Entrepreneur.com article.
One of the best non-Silicon Valley cities to tap into these powerful benefits is Boston, currently the nation’s second-largest startup funding hub. With billions of venture investment dollars flowing to Beantown businesses this year, it transcended New York City, its longtime regional rival.
This thriving Boston scene is fueled by a large number of entrepreneurs and the area’s dominance in the biotech field. Being home to MIT, with its penchant for producing award-winning technology, has also helped Boston become synonymous with companies creating consumer apps, enterprise software, AI, and all manner of technological gizmos.
With Silicon Valley, Boston, and New York City receiving the lion’s share of the country’s venture capital money in 2017, it could be tempting to think they’re the best areas for launching your startup. But that’s not necessarily the case. Sky-high costs of living and doing business in those cities can rapidly eat into whatever funding you might be able to secure.
For example, if you’re living in an emerging startup hub like St. Louis or Atlanta, you can expect your home price to be much lower than in the Bay Area (or other venture capital meccas like Los Angeles, Seattle, Chicago, or Washington, D.C.). That’s okay, you might be thinking. I can just share a studio apartment with a dozen or so other entrepreneurs in those hot cities. Perhaps that’s true, but you can also expect your business expenses to be about 54% higher than they would in St. Louis and Atlanta.
One of the hottest (and most affordable) startup hubs right now is Columbus, Ohio. Like Boston, it has a strong college presence. Ultra-low costs of living and doing business, combined with hundreds of millions in venture capital deals, make it a city that hangs with the best of them.
Likewise, entrepreneurs in St. Louis love the energy and access to key resources. Investments are up 90% when compared to a few years ago, representing the Gateway City’s rapid ascension. Perhaps best of all, the cost of doing business in St. Louis is 8% below the national average.
Other eastern and midwest cities attracting lucrative levels of venture capital deals include Baltimore, Cincinnati, Philadelphia, and Minneapolis-St. Paul. Charlotte may be the brightest new star on the East Coast. From 2015 to 2017, the area attracted $881 million in investments, which was nearly 600% higher than it had been the prior 3 years. And the cost of doing business in Charlotte is 12% below the national average, among the best in the nation.
Moving further west, Denver is staking its claim as a bustling hub for entrepreneurs. There have been nearly 500 venture capital deals in the city over the past few years, and the cost of doing business is favorable. From a staffing standpoint, the area has a high number of college graduates, plus plenty of talented current students to work for startups.
“For years, people have been calling the Denver and Boulder tech scene the next Silicon Valley,” explains Sameer Dholakia, who now works in Denver after a decade of developing Bay Area technology companies. “But Colorado has developed its own distinct culture and personality to become a competitive market for innovation by putting relationships, mentorship, and education first.”
Here’s the bottom line: No matter where you live, there are startup hubs nearby. Places where new sparks and bright ideas are bringing life to businesses. And each of these cities boasts elements that ensure they’re better than Silicon Valley in distinct ways.
It’s also worth noting that technology is increasingly bringing resources to your fingers. For example, networks like Startup Grind and StrtupBoost allow you to connect with millions of entrepreneurs and access resources from the comfort of your living room.
Regardless of where you live and what type of industry you’re focusing on, this is truly the era of balance and opportunity for small business owners.