Switchfast Blog: The Future of IT
Chicago among Top 5 Zip Codes for Entrepreneurial Success
Wednesday, August 25, 2010 by Bryan Anderson
In the beginning, there was Silicon Valley - a nested California
location where entrepreneurs flocked in order to follow their
startup dreams. This area was a hub for the necessary resources
required for up-and-coming tech companies, all confined within a
beautiful geographic location.
While the area still holds significant meaning to entrepreneurs
looking to jumpstart their business ideas, potential small business
owners have figured out alternative means in acquiring adequate
resources, thus resulting in a diaspora of business startups. With
New York and Silicon Valley occupying the coasts, the Midwest turns
to its Windy Leader to produce exciting, innovating, and successful
small businesses.
Chicago is no stranger to successful small business ventures - just ask
Groupon or Threadless.
According to an article from Fastcompany.com, one expert, Matt
McCall, managing director at DFJ Portage, lists two traits that he
believes typically describe the average Chicago entrepreneur:
- Incredibly capital efficient - Compared to places like Silicon
Valley, capital is harder to come by. As a result, "the way they
run their businesses tends to be very capital efficient, very
tight, very focused."
- Collaborative and cooperative - Chicago small businesses keep
their eyes open for opportunities to improve their venture
strategy; aware that other entrepreneurs are experiencing similar
successes and failures along the way.
A write up from ReadWriteWeb.com points out more statistics in
favor of Chicago being a startup-friendly ecosystem. As
the third largest city in the U.S., Chicago holds the highest U.S.
population of any location not on an ocean coast. It reaffirms what
Matt McCall speaks of: Chicago startups suffer from a lack of
venture capital, a common difficulty for almost all startups.
However, the Windy City has a "massive community of customers, a
thriving technology economy, and increased investments in high-tech
and medical companies," a major reason why the city is leading in
the creation of technology jobs.
With everything said, all of this information for "best startup
location" has been based on media research and personal
testimonies. The big question remains: Is there any scientific or
data-driven method that points to the cities best representing and
providing for startups?
One variable considered in this conversation is 'entrepreneurial density', or the "highest per
capita collection of entrepreneurs in the US," according to Brad
Feld, a managing director at Foundry Group. Mr. Feld, a member of
Boulder, Colorado's thriving entrepreneur community, felt that
there may be some correlation in regards to ED and successful
startup locations. No sooner than the idea was proposed, ex-Apple
software engineer Pete Warden used data from Crunchbase to answer
Mr. Feld's curiosity. The results, although not a representative sample,
signify a good first approximation, according to Mr. Warden.
Using the total number of companies in a location and how much
venture money they raised between them, Pete Warden came up with
the top 10 zip codes based on amount raised per-person. Familiar to
Chicago area entrepreneurs, 60606 came in 5th place,
tallying $739 million total and $439,744 raised per person. Here
are the top five zip codes:
CA 94104 - $629m total - $1,681,925 per
person
CA 94304 - $2,822m total - $1,656,031 per
person
CA 94105 - $972m total - $472,540 per
person
MA 02142 - $1,013m total - $448,833 per
person
IL 60606 - $739m total - $439,744 per
person
Again, while the approach may be "crude", it helps further the
scientific process of using available data sets to confirm areas
potentially beneficial to startups and small ventures. New venture
ecosystems are critical in the beginning and growing processes of
any small business as resources and knowledge readily available can
make the difference in staying local or growing nationally.
What are your thoughts on these numbers? What are your
experiences with the entrepreneur community in Chicago? Is this an
accurate depiction of the current outlook for Chicago ventures?
Until next time -
Matthew Hymel
Switchfast Technologies
Chicago IT Support &
Consulting
Rochester
IT Support & Consulting
Leave comment: