When ExitEvent asked me to write about a topic of interest to the entrepreneurial community in this region, I immediately had an idea.
It's one of my biggest pet peeves—why I hate it when magazines list the Triangle Region as one of the best places to live.
Don't get me wrong. I like that this is a great place to live. Like many other transplants, I moved here in part because of the great quality of life that this area offers. We typically experience mild weather and enjoy all four seasons. We have a low cost of living, low crime rates, good schools, low unemployment, etc. These are great, but it bothers me when magazines put us on top of these 'livability' lists. Those designations do not help us with the one factor that affects the entrepreneurial community the most: better access to capital.
The funny thing is that we are all very proud of the fact that we live in such a great place. We keep pointing out all the lists we show up in, hoping that outsiders will take notice and want to bring their talent and their money here. This makes me wonder if entrepreneurs really care about the best places to live when they are deciding where to launch their companies. If so, why do so many people flock to Silicon Valley to build startups? The Bay Area does not show up as frequently as we do on lists of great places to live. But the Bay Area is undeniably the best place to get funded.
What if being a great place to live is actually bad for starting a high-growth business? Someone with a very comfortable life may be less willing to take risks. The type of person who seeks a comfortable lifestyle, a great place to raise a family, mild weather and lots of available jobs, may be exactly the opposite of the type of person with an entrepreneurial attitude. Are we attracting the wrong type of people?
The list I wish we could appear on more often is the "Best Places to Launch a Startup" list. It is the list that matters most to people who are part of an entrepreneurial ecosystem. I recently came across such a list by Forbes. It included the typical places, and not a single North Carolina city or region. I was not surprised.
The authors of the Forbes article used a database developed by Radius, a San Francisco company. Their data set is deep in demographic and business information about cities in the U.S. They looked at five categories to pick the best spots for startups:
1) Small businesses as a percentage of total businesses
2) Percentage of small businesses that accept credit cards
3) Percentage of small businesses in high growth industries
4) Percentage of small businesses with Facebook pages or websites
5) Percentage of businesses with online reviews
If I were doing this research, my list might be slightly different. For example, I agree with number 3, but I don't like numbers 4 or 5. However, these categories are interesting and probably a good indicator of good places to launch a startup. Other categories that I have seen used when considering the best places to launch a startup are:
*Access to venture capital
*Health of startup ecosystem
*Local talent pool
Regardless of what categories are used, one thing is clear: the Triangle has room for improvement as a startup ecosystem. We should continue to be proud of the fact that this is a great place to live. These days, you can start a business from anywhere so livability does not need to be sacrificed. But we need to work harder as a community to show we're a best place to start a business. That is the list that matters.
How can we do that? I don't have the answer yet. I'll keep thinking about the subject and perhaps discuss ideas in future blog posts. But here are some suggestions:
First, let's start more businesses. There are great companies to work for here in RTP. But if you have an entrepreneurial spirit, why settle for the sense of security (which might be false) in working for a larger company? Take charge of your destiny by starting a business.
If you are an entrepreneur already or are thinking about starting a business, start a business in a high growth industry. If you are going to go through the trouble and risk to launch a startup, why not think big?
Hire the best employees. Look locally first, but if you cannot find employees here, hire globally and bring them to this area. This is one place where showing up in the best places to live lists does help a lot. People are willing to relocate to this area. Hire a good recruiter and bring national talent to you.
And finally, let's encourage the formation of more local VC funds. We don't need to wait for larger California funds to invest in North Carolina. Early stage money needs to be local money.