Austin: #1 for Small Business
The Austin Business Journal just published a story based on research by the American City Business Journals across 106 cities. Each of the 16 factors are objective measurements of the economy that affect the climate for small businesses.
So how did Austin do? #1 of course. But what impressed me is that it wasn’t some puff piece about how great Austin is, or a piece where the methodology is proprietary and in a black box. The stats are there for anyone to look at.
- #1 in three-year change in total number of small businesses
- #1 in one-year change in total number of small businesses
- #1 in three-year change in population
- #1 in one-year change in population
And then Austin was #2 in two categories, #3 in two more categories. And single digits in most of the categories overall. Out of 106 cities. My own take is that Austin has few factors going for it that really work:
- Being an entrepreneur or part of a startup in Austin is a socially acceptable (even desirable) career path. Your friends and family will likely be supportive. The startup ecosystem is also supportive. Even people who don’t like you as a person, will probably root for your startup.
- Austinites are somewhat less prone to fad-chasing than our peers in other markets. Partly by necessity, and partly by personality. You don’t choose to be in Austin if you want to be in the hottest of the red-hot VC-funded companies – you go to the Bay Area for that. So if you’re choosing Austin, you’re choosing your own path, and that leaves room for self-validation, or for validation that isn’t driven by how fast your startup can generate outsized economic returns.
- As a result, you can build to last in Austin. You can build a team that is playing the long game, You can build a team with low turnover. You can pursue a market that won’t pay short-term dividends. You can build different kinds of businesses here.
- The quality of life isn’t necessarily better than other places- but it has its’ own unique characteristics that either resonate or they don’t. For me, they do. Music. Art. Food. A vibrant downtown life. Green hills and lakes. Growing tech community.
More from the article:
American City Business Journals (ACBJ) set out to rate the vitality of small-business sectors in major markets across America. The study covered 106 metros that had at least 500,000 residents as of 2014. ACBJ used a 16-part formula to determine each metro area’s score, weighing factors that reflect the growth, concentration and influence of small-business sectors; potential sources of new small businesses; and overall economic health.
For more coverage of the results for Austin, check out this cover article in the ABJ.