What’s the best U.S. city for entrepreneurs?
This may seem like a trick question, because depending on context, there are two obvious answers:
- San Francisco (if you’re in tech and/or developing an app or scalable social media channel); or
- Wherever is cheapest (if you’re a digital marketer or solopreneur whose product is virtual).
In reality, of course, the answer is far more nuanced and complex.
The answer could encompass a number of variables, including:
- Cost of living
- Warehouse space
- Your suppliers
- Access to talent
- Your customer base
- Where you’re licensed
Entrepreneur Magazine has an answer. It recently partnered with Livability to publish a list of the top 50 “Best Cities for Entrepreneurs.”
To compile the list, Entrepreneur considered more than a dozen factors, including:
- the number of businesses and employees between 2011 and 2015;
- unemployment rates;
- number of VC deals in the past 10 years;
- business tax rate;
- value of SBA and 7(a) loans;
- percentage of college-educated locals;
- cost of living;
- commute time;
- accessibility of high-speed broadband;
- projected household income and population increase from now to 2020;
- “leakage and surplus,” which charts whether people spend their money outside a city on goods and services rather than in it;
- the growth of good jobs and high-income positions: and
- publication of Livability‘s own rating of overall quality of life.
In all, the study crunched the numbers on more than 2,1000 U.S. cities with populations greater than 20,000.
Boulder, Colorado ranked first.
This doesn’t surprise me, as the media was heralding Boulder as an entrepreneurial mecca even three years ago, due in part to a small but mighty concentration of venture capital funds that called the town home.
Austin, Texas ranked second.
Nor does this pick surprise me. Austin has long had an experimental, entrepreneurial edge to it, along with a highly educated Millennial population. The study notes that 3M, Apple and Google have offices there, and it is also home to such recognizable startups as LegalZoom and Indeed.com.
You can check the links above for the full list, but two overall themes stuck out for me:
1) All of the the cities in the top 10 are college towns.
The academic resources of large state universities foster entrepreneurship and guarantee access to students and recent graduates – also known as young, hungry (and affordable) talent.
2) Washington, DC looms large on the list.
Three of the top 25 cities for entrepreneurs are in greater Washington, DC.
- Alexandria, Virginia ranks # 11.
- Silver Spring, Maryland ranks # 16.
- Washington, DC itself ranks # 24.
(For those unfamiliar, both Alexandria and Silver Spring are within 10 miles of DC and easily accessible by the commuter train system).
This discovery about DC is what inspired this blog post, because it reflects what I’ve seen as a proud resident.
First, the city boasts one of (if not the) most educated populations in the country (i.e., percentage of adults with undergraduate and graduate degrees).
Next, the presence of the federal government brings with it huge amounts of capital from special interest groups, as well as the U.S. military and defense contractors.
NASA, the NSA, and the CIA are all headquartered locally.
There’s a heavy concentration of research universities, including Georgetown and the University of Maryland.
There’s also a popular “startup culture” that began here maybe five years ago when online coupon marketplace LivingSocial moved its headquarters to DC.
Since then, the city has supported a large network of local tech co-working spaces (including 1776, Cove, and WeWork) as well as regular evening “Meetups” where entrepreneurs can work on their side gig among other likeminded individuals.
In fact, this Millennial startup / side gig culture is so popular and pervasive that I think it’s a bubble. For instance, both Cove and WeWork have closed locations within the past year.
Put another way, as my friend Ann Novakowski said, “My favorite co-working space is the public library.”
In the months and years to come there will be countless more articles that aim to pinpoint the “best cities for entrepreneurs” or identify the “Silicon Valley of the East.”
Anecdotally, the places I’ve heard mentioned most often over the past few years have been Boulder, Boston, and DC.
Regardless, I’m proud of the recognition DC is receiving for its strong entrepreneurial ecosystem and mindset.
More importantly, I’m proud to call it home.