The 2012 Thumbtack.com Small Business Survey is out, in which 6,000 entrepreneurs nationwide rank their hometowns for startup-friendliness. What city snagged top rankings across nearly every category, from hiring costs and tax codes to training programs and networking opportunities? Oklahoma City.
How OKC—land of Big Oil and Timothy McVeigh--captured the hearts of its business class, despite significant geographical handicaps, offers an object lesson in how entrepreneurs can exploit their regional assets to grow successful companies. Few parts of the United States have the resources and brainpower of Silicon Valley or New York. Yet many small- and medium-sized cities still manage to support lively innovation scenes, as we’ve seen in Philadelphia, Charleston, Oakland, and beyond. Here, Wayne Embree, vice president of Oklahoma City-based entrepreneur services at the nonprofit incubator i2E, shares five tips for playing to your city’s strengths.
Don’t be such a wannabe.
“A former partner of mine in the VC business would routinely point out the window and say to people: does it look like Silicon Valley out there to you?” Embree says. “Stop trying to be that, and start trying to be more of what you are.”
Take Oklahoma City. The city does big business in oil and natural gas production (Chesapeake Energy Corporation and Devon Energy Corporation, both Fortune 500 firms, are based here). It is also home to the Tinker Air Force Base and the Mike Monroney Aeronautical Center and has one of the country’s largest livestock markets. “We have clear competitive advantages in agriculture, energy, aerospace, and manufacturing,” Embree says. “Startups that address those market segments will have a client base here they can easily access. You’ll get quick feedback from your customers, knowledgeable people who will beta your products--all of which will increase your likelihood of success.”
Need dough? Head to the local incubator (or country club).
Many cities offer surprisingly robust, if nontraditional, funding mechanisms for startups. In Oklahoma City, i2E (which stands for “innovation to Enterprise”) provides funding and support for early-stage ventures in Oklahoma City. Founded in 1998, it has invested $15 million in more than 150 companies and has attracted $665 million in follow-on capital from other investors and sources. That translates to 400 new products to market and 1,500 new high-wage jobs. Not too shabby for a nonprofit incubator. Another big source of funding in OKC? Deep-pocked locals committed to helping their hometown.
Embrace the community.
“One of Oklahoma City’s advantages is its genuine sense of community,” Embree says. That’s true of many small- and medium-sized cities, where you’re just as likely to see your angel investor in the office as at the hardware store. Take advantage of the informal resources and organizations such an intimate environment breeds. In Oklahoma City, entrepreneurs can reach out to VentureSpur, an Oklahoma-based accelerator / incubator, as well as the Oklahoma City Chamber of Commerce. Biosciences ventures can apply for low-rent space at the Presbyterian Health Foundation Research Park, where they’ll rub shoulders with like-minded startups (i2E is also located there). University of Oklahoma Health Sciences Center and the Oklahoma Medical Research Foundation can help a nascent biotech venture grow in OKC, too.
I mean really embrace the community.
The upside of a smaller startup scene is face-to-face contact. But don’t burn any bridges or spin lots of promises you fail to keep. In smaller cities like Oklahoma City,
one whiff of untrustworthiness will spread faster than burning sage across the prairie.
How Oklahomans spend their (very limited) tax dollars offers an object lesson for entrepreneurs who are tempted to play fast and loose. As Embree describes it, Oklahomans realized in the mid-‘90s that their city needed to modernize infrastructure, schools and facilities. Here’s how they did it: “They taxed themselves first to raise the money, then build the stuff,” says Embree. “Voters in oversight committees then watched over every project to make sure the money went where it was supposed to.” So don’t squander any of your seed capital on a Vegas weekend–unless you want your millionaire-backer in a 10-gallon hat pointedly questioning you on it later.
Use your mortgage savings to fund your flight costs.
“Getting VCs to travel from the coasts can be a challenge,” Embree says. And even if you manage to secure enough funding at home, chances are you’ll still have to travel to either coast to attend conferences and network with other startups. That’s where your mortgage comes into play. Bankrate’s cost of living calculator estimates that Oklahoma City is 59% more affordable than New York City. The cost of living is comparable in many other medium-sized cities. So while you might spend lots of time in the air, you'll fly home to a roomy, affordable house.
[Image: Flickr user Swisscan]