How Communities Can Attract Hyper-growth Startups
With so many young folks tossing their life into a backpack and moving to a “start-up” friendly location, local officials are asking the question — “How do we make our landscape more attractive to new companies?”
You don’t have to be a Zuckerburg or a Larry & Sergey to live in a startup community. Tech start-ups employ over 10M people in the United States. Many offer unlimited vacation time, benefits, pet benefits, monthly bonuses, relaxed dress code, beer at work and much more.
I grew up in a small town with a population of about 352.
I grew up in a small town with a population of about 352. That’s right…. 352 people… total. If you were to count the neighboring town, that would get us just over the 1k mark. As I grew older and began to search for career paths, I looked to the nearest “large” town for exploration. This town, had roughly a population of about 31k. One thing I noticed was folks who reached the ages of 20–25 would leave — cold turkey. This vicious cycle continued for the last 4 years I lived there.
Dominant companies remained dominant, small companies remained small. There was really no sense of hyper-growth amongst the business community. Due to the cost of living, it really didn’t take much to reach a state of comfort in this town. The average cost of rent floats around $1k a month.
I believe secondary cities have the perfect landscape to start a company.
Now, the town is looking to develop a strategy to grow the start-up community and reverse the norm. I believe secondary cities have the perfect landscape to start a company. However, there are a few obstacles that prevent this from happening.
There are a few things secondary towns/cities needs to attract new hyper-growth companies…here is my take on the necessary ingredients.
Capital is a key component to attracting start-ups. Regions like Silicon Valley, Brooklyn, Boston & Waterloo make it easy for start-ups to relocate and set up shop. They provide co-working space, eateries, venture capital, and advisory. For a community to attract new companies, the community must commit to deploying capital. I would recommend hiring tech and financial advisors to come in and focus their attention on monitoring investment opportunities. The relationship between start-ups and economic development committees should be a lot tighter.
Talent is a key factor due to the amount of technology involved in modern business practices. When start-ups pop up around town, this draws talent into the area. When tech talent is pouring into a city, every enterprise can improve upon their human capital. When companies hire great talent, naturally, company culture improves.
When I mention anchor opportunities, I don’t necessarily mean hand-outs. When I say anchor opportunities, I mean it in a relative sense. So, lets say a start-up is developing a software that tracks and manages logistics. The appropriate action of an anchor would be to deploy the technology on a small scale within it’s infrastructure to test it’s capabilities. This would be a huge advantage to the start-up allowing them to gather insights on how their product performs within the market. This will in turn help the anchor companies because it’ll increase the chances of deploying a unicorn within the community.
Once a community lands one unicorn, it will change the face of the town. An example would be how Under Armour has changed the outlook of Baltimore. Another example is how Snapchat has single handily changed the business community of Los Angeles, making it a prime location for capital resources and shared work space. Even San Francisco is becoming a staple within the tech community forcing senior level execs to move into the city and out of the valley.
Anchor — A large enterprise company within a community.
Unicorn — a unicorn refers to any tech startup company that reaches a $1 billion dollar market value as determined by private or public investment