Either by choice or need, COVID-19 has pushed many to begin their own entrepreneurial journeys. At first glance, this seems like a miscellany of ventures, but these new businesses have a unifying element: they all started from home.
At Times of E, this observation pushed us, in turn, to think about this radical shift in entrepreneurship. On one hand, the relationship between individuals and geographies is stronger. On the other, the relationship between companies – employees, investors and customers – and their geographies is weaker.
We think this boils down to more choice for individual entrepreneurs. If you’re looking to start a business, many places will be a good choice. Entrepreneurs and entrepreneurial investors – individuals, in other words — are the key to companies and a thriving business environment. Make your city attractive to entrepreneurial people, and you will have thriving economy.
See Fastest-Rising Entrepreneurial Ecosystems In A Remote World, here.
We spent three months putting together this look at fast-growing entrepreneurial ecosystems. A couple of observations emerged about the new environment:
Second-tier cities stand to benefit, especially those that already had a strong emerging ecosystem before the pandemic. Thus, you see Miami and Austin high on the list of places with an even-bigger buzz.
States matter a surprising amount. A few years ago, think tanks were spouting the idea that cities mattered much more than states: The pandemic has shown us that in the United States, states, including their tax rates, matter a lot. This is likely to be even more the case in a tax-forward Biden Administration.
The entrepreneurship landscape in the middle of the United State is surprisingly well-developed. Every place we looked at had a multitude of organizations and gathering that aim to support new businesses. If you’re looking to land somewhere new, you’ll find a nice peer network.
One of Times of Entrepreneurship’s guiding principles is the fact that entrepreneurship can happen truly anywhere, and that it is valuable wherever it happens. The pandemic has indeed proved that “buzz cities” such as San Francisco and New York City might after all be only that – a buzz of networks, VCs, and endless competitors, in return for an overpriced rent and stressful lifestyle. The pandemic has also proved that a network is not just built by proximity to these centers, and the advantages of being simply somewhere else can pay off. Either with less competition, a better work-life balance, favorable business-tax rates, the list goes on – and in fact it does. We have decided to create this collection of thriving innovative spaces as this shift will only deepen, and we are confident that both entrepreneurs and different cities will come out as winners.
We attempted to keep the list as clean as possible by choosing five elements that mattered to us – we are also a new, remote-first business – and expanding it into the elements which make a city good not just for business, but also for living. We found plenty of data directing us to the usual suspects in terms of innovative cities, a fact which contributes to the cycle of these cities gaining more entrepreneurs and funding. We also dived into the resources and benefits cities offer to new businesses – a great push for some entrepreneurs.
For the full methodology, see here. We used the Kauffman Foundation’s ranking for Growth in Entrepreneurship, as it points to an upwards trajectory for entrepreneurial activity using the regional rate of startup growth, alongside the Milken Institute’s report on the fastest-growing metro areas, which incorporated the effect of the pandemic on regional growth. Using data from PriceWaterhouse Coopers MoneyTree survey, which ranked level of venture capital investment in Q4 2020, we noted which states ranked best in venture opportunities. Heartland Forward’s Most Dynamic Metropolitan Index notably takes into account the proportion of total jobs at young firms and the educational attainment of employees at young firms, providing entrepreneurs an idea of the workforce available in a specific ecosystem. Lastly, we used the Tax Foundation’s 2019 ranking of states’ business tax environments, as freedom of movement can also mean more favorable taxation. We took the ranking from each of these and collected it into overall scores which led to a definite ranking of which ecosystems top these criteria.
But data usually lags narrative. Why is one place more attractive to businesses than another? Word-of-mouth is still among the top reasons for companies to move to a specific entrepreneurial ecosystem. We thus added a “buzz score”, counting for 10 points deducted from the final count, for cities we simply heard great things about from numerous sources. The ecosystems where this bonus is reflected are: Denver – Aurora- Fort Collins – Boulder, Indianapolis, Houston-Sugar Land-Baytown, Washington D. C., Miami – Punta Gorda, Salt Lake City – Provo – Orem.
We hope with this list to provide a comprehensive overview of what one should expect from an entrepreneurial ecosystem, along with a thriving cultural scene, natural resources, and overall quality of life. The stories attached to each ecosystem on the list provide just that additional information you might need to make the leap.
The Top 10 Fastest-Growing Entrepreneurial Ecosystems In A Remote World
For the full list and descriptions of each ecosystems, go here.
- Austin – San Antonio, Texas
- Salt Lake City – Provo – Orem, Utah
- Dallas-Forth Worth, Texas
- Miami, Florida
- Seattle – Bellevue, Washington
- Denver – Aurora- Fort Collins – Boulder, Colorado
- Nashville, Tennessee
- Tampa-St. Petersburg-Clearwater, Florida
- Raleigh, North Carolina
- San Francisco – Oakland – Fremon – San Jose-Sunnyvale-Santa Clara, California
Shirly Piperno is Times of Entrepreneurship’s Head of Partnerships.