The Future of Smart Startups Lives Outside of Silicon Valley: Here’s Why
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Some would say that Silicon Valley will forever be the epicenter of technology and innovation, topping the charts and becoming even stronger after the pandemic. But looking at the 79 home ecosystems that generated more than $ 4 billion last year would make anyone wonder: why they are so many entrepreneurs looking for a home outside of Silicon Valley?
The formula of following the big players and the financing of concentrated capital has become obsolete and overcrowded. Just look at the growth rate of startups outside of Silicon Valley, more than doubled in the last five years, an indication of what’s to come. In parallel with the evolution of time, new work environments and remote workforce, cities are strategically developing spaces, communities. i incentives to support entrepreneurs and prepare them to thrive.
New Orleans became one of more than 90 home ecosystems that created a unicorn last year, with the sale of local technology company Lucid for just over $ 1 billion. And it is one of the 10 cities in the United States with the most entrepreneurs per capita. Yes, the same New Orleans that is known for its music, food and Mardi Gras.
Related: 8 Reasons to Launch Your Startup Out of Silicon Valley
Build a business where there are better tax incentives
Silicon Valley may have connections to venture capital funds and capital, but after recovering from the fall of 2001, traditional centers were becoming prohibitive. This is especially true when it comes to taxes. For example, the “Louisiana Digital Media Tax Credit” is based on a similar credit for the film industry that would give a 25% cash discount on any payroll dollars spent on software development in Louisiana. As soon as the credit was passed, it was the best in the United States. Wyoming, South Dakota and Alaska lead the Tax Foundation’s state business tax climate index and couldn’t be further from Silicon Valley.
A strong culture means a community of support
In 2011, Gameloft, a French mobile gaming company, was attracted to New Orleans by the tax incentive. But they were suspicious of the workforce: would there be the quantity and quality they needed? To seal the deal, Greater New Orleans, Inc., the city’s regional economic development nonprofit, paid to announce its first 15 potential positions in New Orleans. Gameloft received more than 1,500 responses, more or less the same as they would have expected in New York, and decided to open a studio in Crescent City.
GNO, Inc.’s next big prospect, GE Digital, had similar questions about labor, but a much bigger need. For GE, the state of Louisiana and GNO, Inc. they designed a new, innovative incentive where GE would receive $ 5 million, but all the money would go to the University of New Orleans to design and implement a personalized training program. This created a threefold victory: GE received bespoke employees, UNO developed a market-relevant curriculum, and the New Orleans technology job market grew.
Over the years, many other technology companies have joined and grown in the Greater New Orleans region, such as inXile (Microsoft), High-Voltage Software (Fortnite programs), Turbosquid (Shutterstock), Lucid, Levelset (Procore ), DXC Technology, Space Possibilities, and many more. These companies chose Greater New Orleans because of the low cost / high culture / high diversity business proposition that no other place in North America could match. Ultimately, this business proposal relied on a proactive and agile system of schools and non-profit organizations that have ensured a steady supply of diverse, high-quality technology employees.
In addition to financial incentives, the culture of these emerging destinations makes it a supportive rather than competitive environment. With a world-famous culture and a much lower cost of living, New Orleans became a plausible region for technological expansion. The city is passable, connected and affordable, which allows for a clue to your idea and more opportunities for collaboration. Yes, the impact is gradual and cumulative. But the results are clear.
Related: Top 7 Cities Competing with Silicon Valley for Technology Entrepreneurs
The post-Covid world is ideal for emerging technology destinations
We are moving forward to 2022 and some facts tell the story of a thriving technology cluster. And this innovation is inclusive, as New Orleans is No. 4 in the U.S. for African Americans in technology jobs per capita and No. 6 for women. Driven by the growth of the largest metropolitan area in the state, Louisiana is also the No. 5 in the U.S. in terms of software employment growth. Last year, more than a dozen local technology companies enjoyed outings, for a collective value of more than $ 2.5 billion.
While New Orleans is still more closely associated with gumbo than gigabytes, the word is being spoken. And it’s expanding beyond The Big Easy to other emerging technology destinations like Atlanta, Kansas City, St. Louis. Louis and more. Local entrepreneurs are starting a new wave of Web3 businesses on these sites, and business and political establishments are fully supporting them.
After all, remote work now offers employees the ultimate job / life arbitrage: work for a technology company on the east or west coast and live wherever you want.
Related: How Technology Entrepreneurs Can Stand Out Outside of Silicon Valley