We have the key to the city--or 50 cities, to be exact. For the 2020 Surge Cities index, Inc. and innovation policy company Startup Genome analyzed troves of data on seven essential indicators--such as early-stage funding and job creation--to determine the 50 best areas for startup growth. In the following dispatches, you'll find a road map for turning forgotten ZIP codes into boomtowns--or simply for answering the age-old question: Where should you go next? From Charleston to Chattanooga, the answers may surprise you.
Its A-list startup scene just keeps heating up.
No. 1 Rate of Entrepreneurship ; 19 High-Growth Company Density ; 22 Net Business Creation
Gloria Estefan and Madonna have both lived and run businesses here. However the startup scene is also A list. ParkJockey, a parking management platform founded in 2013 by Ari Ojalvo and Umut Tekin landed a reported $800 million in funding from SoftBank and others in 2018. That brought the company’s valuation to more than $1 billion. So far this year, local startups have raised $808 million in funding, which is $601 million behind 2018's total for the year, according to PitchBook. But high-profile exits—including HR and payroll software firm Ultimate Software selling to a private equity group for $11 billion this year—bode well for the area. Locals credit the city’s growth to its high density of immigrants, who mostly hail from Cuba and other countries within Latin America. Miami also has the second-largest percentage of foreign-born entrepreneurs in the U.S., beating cities like New York and Los Angeles, according to Inc.’s Entrepreneurship Index, which tracks the health of the U.S. startup economy. “In Miami, you get the sense that nothing is impossible,” says Maxeme Tuchman, co-founder of Caribu, an app that lets users draw or read with children when they’re apart. “If you can build it, you can do it.” –Emily Canal
The house that Mickey Mouse built is getting some unlikely visitors.
No. 4 Population Growth ; 8 Job Creation ; 16 Net Business Creation
The low cost of living and ample nonstop flights to major hubs--hello, Disney World--are appealing. There's also an effort to strengthen Florida's early-stage startups with newly launched accelerator programs such as VentureScaleUp and co-working communities like GuideWell Innovation Center, a 92,000-square-foot space designed for health and medical startups. “Looking back at our DNA and roots, we are the region that put a man on the moon,” says Sheena Fowler, the vice president of innovation at the Orlando Economic Partnership. “Orlando is built on the backs of those who have tackled the impossible.” In addition to the city’s transformation on the ground, its reputation received a boost from Steve Case’s Rise of the Rest road trip. The pitch competition kicked off its eighth annual tour in Orlando, and local company AireHealth, a maker of portable nebulizers, took home the $100,000 investment prize. --Emily Canal
Bold-faced names are paying handsomely to see this city succeed.
No. 9 High-Growth Company Density ; 12 Net Business Creation ; 14 Population Growth
Tampa’s startup ecosystem owes a lot to a couple of billionaires. In 2017, Tampa Bay Lightning owner Jeff Vinik announced plans--alongside Bill Gates’s Cascade Investment--to build Water Street, a 56-acre, $3.5 billion development project in downtown Tampa. Entrepreneurs are also benefiting from accelerator Tampa Bay Wave and Vinik’s new innovation hub, Embarc Collective. After participating in Tampa Bay Wave’s TechDiversity accelerator program, regulatory compliance startup JustProtect relocated from New York City this year. A homegrown field of startups is also taking root. “In the last one to two years, this region has become more of a tight-knit community,” says Brian Kornfeld, the president of Synapse, a local Florida nonprofit that hosts annual innovation summits. “We used to be disconnected and compartmentalized. Now it’s starting to feel like a village.” Also contributing to Tampa’s thriving ecosystem are high-profile exits for companies like cloud-computing firm Tribridge and pharmacy benefits management company myMatrixx, which were both acquired in 2017. --Emily Canal
The engineering might in Florida’s panhandle is VC catnip.
No. 7 Job Creation ; 14 Wage Growth ; 15 Rate of Entrepreneurship
What Palm Bay’s metro area lacks in size--tallying about 600,000 residents--it makes up for in engineering might. Defense contractors L3Harris, Northrop Grumman, and Lockheed Martin have a presence in this Floridian hub just south east of Orlando. NASA too. Though its startup culture is still fledgling, those who do launch in Palm Bay--and find funding--are cut from the same cloth as the area’s giants. That’s evidenced by companies like Tomahawk Robotics, which was co-founded in 2018 by a former robotics engineer from Harris. In December, it lassoed $2.4 million in seed funding, led by Mosley Venture Partners in Atlanta. “We haven’t had our first big exit yet,” says Bud Deffebach, co-founder of Melbourne-based incubator and co-working space Groundswell. “But I feel pretty confident that’ll happen within the next couple years.” An angel investor with VC experience, Deffebach is doing his part to encourage that change--working through Groundswell to educate local tech talent on marketing and sales and to connect promising startups with VC funds elsewhere in the Southeast. Atlanta, he says, has a nearby entrepreneurial model that Palm Bay hopes to emulate. --Cameron Albert-Deitch
Population trends make this Central Florida hub boomtown U.S.A.
No. 1 Population Growth; 2 Job Creation; 10 Net Business Creation
Long overshadowed by Orlando and Tampa, this Central Florida hub is now receiving some well-deserved time in the sun. In the last year, Lakeland has received a major influx of new residents; and now ranks first for population growth in. The mild climate is only part of the reason. While housing prices have largely recovered, the median home price remains just slightly lower than what it was before the housing crisis sideswiped the state. The business community is proactive, too. Fourteen years ago, members of the Lakeland Economic Development Center, a business-district improvement organization, visited other startup communities, and gathered ideas for how to improve their own community. That gave rise to the area’s new affordable co-working space Catapult, which launched in 2013 and is already outgrowing its current location. A new 38,000-square-foot space, complete with commissary kitchen and maker space, is set to open early next year. Additionally, in the next several months, the city will also get a new food hall called the Joinery and a gathering spot for food trucks and craft beer called the Yard on Mass. --Emily Canal
The startup scene is one part low costs and two parts go-getter.
No. 7 Population Growth; 10 Job Creation; 13 Rate of Entrepreneurship
In this Gulf Coast town, mom-and-pop shops cater to beachgoers while tech startups stay inland--thanks to a recent influx of gigabit-speed internet availability. The cherries on top are relatively low housing and business costs, including a top marginal corporate income tax rate of 5.5 percent. This has all led to a surge in transplants from the rest of the country, many of whom quickly commit to starting and growing small businesses in the area. Adam Petrilli is a New York City transplant who moved his reputation-management startup NetReputation.com to Sarasota, Florida in 2014. He says entrepreneurship is simply in the air there. “The community just has some kind of aura where they know it’s possible,” says Petrilli, whose business was No. 208 on this year’s Inc. 5000 list of fastest-growing companies in the U.S. “Even the server at the beach club always has these ideas and just wants to be an entrepreneur. There’s just a very problem solving-type attitude.” --Cameron Albert-Deitch
Startups in other cities are circling around this North Florida hot spot.
No. 7 Population Growth; 16 Rate of Entrepreneurship; 24 Net Business Creation
The rate of entrepreneurship keeps climbing in the Florida hub, thanks to recent ecosystem investments like the University of North Florida’s 13,000-square-foot innovation center, which opened in February. Meanwhile, the Mayo Clinic’s new Life Sciences Incubator, designed for biotech entrepreneurs, and early-stage VC firm PS27 are also creating new opportunities for local firms. Now startups in other cities are taking notice, says Jim Stallings, CEO of PS27, who has seen an increase in the number of out-of-state attendees at the incubator's annual entrepreneurship conference. “They're realizing the talent that's available in Jacksonville, as well as the quality of life and low cost of living," says Stallings. Taylor Harkey is co-founder of Adjective & Co., a Jacksonville branding and advertising agency that has been featured on Inc.’s Best Workplaces list three years in a row. He affirms the area's appeal to out-of-state talent, as four members of its 20-person staff hail from outside of Florida. What's more, he adds, the influx of talent has helped shore up local businesses like breweries and restaurants, which have added to the city's appeal. --Emily Canal
If you want young talent to stay put, buy into their company building.
No. 7 Population Growth; 10 Net Business Creation; 20 Job Creation
The Great Recession rocked this coastal community, but the area’s economy is finally starting to turn--thanks, in part, to favorable population trends, as well as a growing enthusiasm for starting up. Promising companies founded out of Florida Gulf Coast University’s four-year-old student incubator have generated $10.2 million in combined revenue. The university also launched an entrepreneurship program in 2017, which currently hosts 500 students. Sandra Kauanui, the entrepreneur-turned-professor who runs both programs, has noticed increasing interest in social entrepreneurship. Among other social ventures, there’s youBelong, a social app for people with special needs created in 2017 by FGCU student John Ciocca. Last year, the company won a national Edison Award, which recognizes excellence in new product and service launches. All that signals progress, says Kauanui. “One of the biggest problems we had for many years was that our young people didn’t stay here,” she says. “Now, we’ve got the feeder to create the East Coast Silicon Valley.” --Cameron Albert-Deitch
