We all know the startup failure rate, about 90% in five years. And we know that Silicon Valley could still be an influential position in the United States for start-up technology companies. This is probably due to the insistence of venture capitalists on the companies they fund or move to Silicon Valley. But when considering the type of company you want to start, you should really examine the importance of various factors outside of funding that can hedge the success of your startup. Where you identify your startup, even at a distant work age, can actually be more critical than you might think.
Several startup ecosystems outside of Silicon Valley have been growing silently for more than 20 years. And in addition to the actual city, you should study the regional entrepreneurial ecosystem for your valuable resources.
Entrepreneurs. There is nothing to support success. To improve an ecosystem, you want to get a high number of successful and aspiring entrepreneurs. They build support networks, agencies, meetups and provide advice and counseling to future entrepreneurs.
Talent. If you are building a biotech startup, you should be in San Diego, one of the richest biotech areas in the country. Why? Because your ability to recruit top talent has been greatly enhanced. So, as you consider your startup and what is needed at its core, does that talent exist in your chosen city or region?
Education. In the age of fast-paced companies based on competition, your potential top talent can come out of the local university. Choose an ecosystem that is graduating from a diverse talent base that is critical to your company’s success. Hire some of these talents as paid interns and hire them as your future employees.
Investors. Every entrepreneur needs ecosystem investors. Study a potential area and see numbers such as invested capital, investment diversification, and overall growth trends. Also, look at the type of investor who may be an expert in a field that is moving towards your startup.
Cost. Many founders do not see this metric but again it can be important for the ultimate success of your startup. If you are raising capital, you may need a burn rate or runway to achieve your overall goals. Although you may want to stay in Silicon Valley, all the resources of the right ecosystem can be found in Salt Lake City where the cost of living is low and the potential burn rate is much higher.
While there are many cities and territories in the United States that are growing rapidly, the following is a list of perennial leaders, Silicon Valley, and another region that has benefited from companies such as Microsoft and Amazon is Seattle. The rest of the list has spent the last 10-15 years silently expanding their entrepreneurial base and territory on a consistent basis. Today, below are some of the best places to start your company for three different reasons.
Silicon Valley: Godfather of startups as a region, it is still very relevant if you can withstand the pressure, cost and competition.
Seattle: It’s easy to spin companies from big successful startups like Microsoft, Amazon and Starbucks. Also, lots of talented potential employees who have experience from hosting other big successful companies in the region.
Austin: Growing silently for 15 years, it is now one of the top regions in the country outside of Silicon Valley that attracts startups, venture capital and potential tax benefits. Like Seattle, it has benefited from early and large startups like Dell and others that have built a strong entrepreneurial foundation.
Salt Lake City / Provo: Qualtrics, Domo, Omniture, all started with what is called ‘Silicon Shield.’ Not only that, but big technology brands like Google and Meta (Facebook) have increased their workforce in the region, leading to a huge talent pool. The cost of living is also significantly lower than in Silicon Valley.
San Diego: Another quietly growing entrepreneurial ecosystem. With the richness of various industries such as biotech, technology, hospitality / tourism, medical devices, active outdoor / lifestyle and military / defense industries, its strength can be in diversity. Evidence of its arrival is the current ইউ 1 billion worth of ‘Unicorn’ startups, including Click Up, Flock Freight, Drata, Shield AI, Seismic, Vauri, Tillium, Biosplice and Kiriba.