Small Business Marketing Blog from Duct Tape Marketing

Interesting that SF keeps being left off list. The community has lost something since .com financial bonanzas put rentals & real estate over the top. Any thoughts on what that magic is that remains in Boston, Austin etc, but not SF?

Goodness, no op for edit? Just looked the post over and noticed it needs it. Twitter 140 may be causing literacy deficit :)

@Meryl - personally I love SF, in fact, my oldest daughter just started a job there. I can't answer your question but it feels hard to do business there to me.

Amsterdam is a great city for Entrepreneurial minds. It is creative, free flowing, and inspirational. I live in NY which is also an Entrepreneur friendly city, but with the rise of the virtual world Entrepreneurs can be anywhere and still be connected.

The E.Factor http://www.efactor.com - it a global community of entrepreneurs and investors that meet online and offline.

Austin is a town full of creative people. It's a very nurturing environment for entrepreneurs who think outside the box.

and Austin is very affordable compared to SF... which is nice for an Entreprenuer starting off

I'm in Austina and surrounded by a ton of entrepreneurs and a friendly environment that helps me to succeed. Anyone needing more direct input about Austin can feel free to get in touch with me. Been an entrepreneur here for a decade.

I'm biased toward Austin (I've even written about Austin being hot for startups.) The reason there is a shift of new businesses from SF to Austin (and having boots on the ground, I can tell you it's true) is the almighty dollar. Austin's cost of living is ridiculously low compared to anywhere in California- the median home price is up 6% this year but still only at $194k (and we're not talking a 2 bedroom shack here). Office rentals can be found for less than a FOURTH of what is paid in California. So between cost of living and cost of operating being low, Austin usually wins and we're seeing tons of people relocating, especially those starting off on their own.

That said, Austin has always fostered a culture of independence- we've had a massive "Buy Local" campaign since the early 80s and Austin is a creative environment. The University of Texas stimulates this environment of learning, growth, experimenting (all necessary in entrepreneurialship). Those added up make it ideal for entrepreneurs.

What I will say for SF (who I see as the only competitor for startup hotspots) is that the big money is in SF meaning VC and Angel dollars live in Cali- you might bump into a checkbook at a coffee joint in SF.

With all this Austin love I'm gonna have to dig out my Keep Austin Weird t-shirt acquired from my last visit to Chuy's up near Barton Springs.

You are right on point with Boston. There needs to be that sense of History. When you walk the streets of Boston of Philly or NYC you know that you are walking in the footsteps of greatness and that rubs off. It is a mentality that you have to be better than the best. Moreover, you you didn't go to Harvard or MIT then you have a bigger chip on your shoulder.

I have lived in Atlanta and Boston and the difference is that people are nice to you in ATL and Boston is all about Making MONEY.

I work in downtown Denver, and although everyone complains about how expensive it is, we are surrounded by start-ups everywhere. I think the laid back lifestyle might counter inflated costs. CNN ranked it the 7th best places to "live and launch" so there have to be some factors other than just personal preference.

For start-ups, you need to have the talent pool available to expand quickly. Being a college town helps, having a reasonable cost of living also helps, and having a history of past startups provides experienced hires and angel investors. Diversity also matters; finding a new idea and exploiting it successfully usually requires people from different cultures and backgrounds.

I'm sure there are a million factors that go into it. There was a slashdot article recently about how enforced non-compete agreements stifled start-ups in Massachusetts.

I wonder if the fact that three of those cities are port cities where global business comes in and out? Being "stuck" in the East Bay Area of California, I guess I'll have to get my entrepreneurial addons via the internet. - Linda

I think that San Diego has a great entrepreneurial spirit about it. I have worked for an independent restaurant, an independent retail shop, and an independent hotel here in San Diego. I've found that factors that have supported these entrepreneur's goals are the sense of community around San Diego, and the way people really appreciate hard work and creativity in regards to businesses.

I think that any area that reaches critical mass of small businesses will be a good place to start one.

The walmart effect can break businesses not in direct competition when customers gets more used to the chain than the individual.

A city or town with a tradition of small business will always be good for small business.

I'm in Austin and the cost of living is a definite plus. The city really encourages small business growth and there's a lot of economic growth that has bucked the trend from the rest of the country.

I would say, Arizona/ Nevada/New York are probably good in my eyes.

Arizona and Nevada are great cities as far as taxes and start up costs for businesses. But cities like New York and Portland are probably great in terms of “life” and the “vibe” as you put it. Mind you, depending on what your “seed investment” is…. You may not be lucky enough to be able to consider the “vibe” and you might just have to settle for the cities where your seed money can make your start up last a while.

The biggest issues with start ups are that they deplete their investment money before they even had a chance to “lift off”. If you can stay in business long enough to get over the initial 2 year hump….you most likely will make it. But if you are in a city where costs are too high….and if you don’t have a regular client base right away….you’re going to have to close shop soon.

I feel Atmosphere Solutions would NOT have lasted in New York with the initial investment we had to work with. Even though there would have been a lot of opportunities in NYC and it’s a great city for a business to thrive in.

I've got to put my vote in for Indianapolis!

Personally I've started three companies here including ExactTarget which has filed it's S1 and Compendium Blogware.

In its annual "Cybercities" study released Tuesday, AeA said Central Indiana's growth rate of tech jobs was 8.6 percent -- the fourth fastest in the nation.

Indianapolis is a world class city that's easy to get to and easy to get around in. We have great culture as well as major sports and events.

From an entrepreneurs standpoint we have several aspects that give us a huge advantage.

Low Costs. Our current offices are right in the heart of downtown in a great building...at $12 per sq foot. Overall costs here are 60% of what our peers pay on either coast or in Texas. This obviously helps entrepreneurship because it requires significantly less capital. If you look at the ExactTarget S1 you will see less that $6mm total capital invested.

Supportive Angel Community. Not only VC's but lots of private investors both in formal groups and informal networks. Because there have been so many successful outcomes, Indianapolis is overrun with VC's from both coasts looking for new deals.

Human Resources: Austin has UT. Indianapolis is surrounded by Indiana U, Perdue U, Ball State and IUPUI all less than an hour away with student populations of over 20,000. This is a tremendous resource for both ideas as well as young, inexpensive & motivated employees. Additionally there are many great private institutions including DePaw, Butler and Rose Hulman Institute.

Housing & Transportation. Indianapolis is the crossroads of America....within a days drive of 75% of the US population. as a result, we have a great highway system with no topograpic barriers. What this means is a high quality of life since your commutes are easy, housing is inexpensive. I live on a country club in a 5 bedroom house and big yard that is probably worth about $450k if I'm lucky.

I could go on an on....but Indianapolis should absolutely make your list.

Chris Baggott
CEO
Compendium Blogware
www.compendiumblogware.com

@Chris - thanks for the great addition - I love it when people are so obviously passionate about their towns. You make a great case for Indy, but since you stole the NCAA from us I have hard time being nice.

Actually, I agree Indy should be on the list - a lot of really positive things happening there.

I actually have been looking into cities where I could expand my business. I have recently read an article about Salt Lake, UT. There are a lot of very successful companies that have started or are based out of Utah. Pretty interesting. People state over and over during my inquiries the reason for this is the customer service possibilities. I actually read a book by Richard Hanks, president of a Utah based customer service company called Mindshare, that sold me. I hope this helps.

Lancaster, PA. Besides being the home of the Amish, whose greatest innovation is to avoid complications, we're home to us, Mission Research, founded by the founder of ChiliSoft (me) and the original team.

We have about a dozen other good companies, a lot of entrepreneurs, LOW cost of living, BUT not a great flow of venture capital. So we have to get creative, like build real companies with real revenues, then getn investor attention.

check out http://www.crmbrella.com for a new desktop crm, and http://www.missionresearch.com/giftworks for great fundraising software!

I have been in healthcare and sales in Tucson, AZ for over 20 years, I began local, branched out to Phoenix and returned to Tucson to climb a 10 year corporate ladder with Big Pharma. (I left last year to start-my own health education and consulting company.)

Believe me, there is a huge contrast in marketing, sales strategies and atmosphere between Phoenix and Tucson.

You would think Tucson, being a "small" college town would support innovation and progress. But we have a "scarcity" mentality that is a constant barrier in almost every local industry.

Chambers compete for members and support $$ over small business. In-fighting and politics between hospitals, healthcare groups, and providers take precedence over patient care. Non-profit groups fight over funding dollars, and the University is an Ivory Tower, too self-absorbed with it's own priorities to bother with us common folk.

Anybody need a grumpy, but idealistic, health consultant in San Diego!

I can only speak to the guy in the garage type of entrepreneur (which is me). Does the city have readily available high speed internet? Is it cheap to live in? Are there universities pumping out highly educated individuals into the community? Are there corporations bringing highly training individuals to the community? These are the main elements to my mind. I live in St. Louis and couldn't have made it through the rough times in DC (my prior home). It seems to me that the existence of large corporations is probably a high predictor of startup activity. The highest profile startups (without VC backing) I am aware of in my hometown almost always involve guys who jumped out of the corporate game and tried to make a go of it on their own. These sorts of people also have an easier time accessing capital.

Check out Richard Florida for a complete analysis on why some cities attract entrepreneurs and innovation while others don't. Vibe is definitely part of it - I think this feeling is a sense that your neighbors (past and present) are expressing themselves and so can you. To keep it simple, Richard calls this tolerance and says the combination of it, talent and technology creates a perfect environment for entrepreneurship/economic success. His latest book talks about how to pick one of these cities maximize your personal success in all aspects of your life.

www.creativeclass.com