Not everything that makes a city great for entrepreneurs can be totted up on a calculator. Quality-of-life considerations drive location decisions for several business owners. When Andrew Aiken, 39, and David Frisbie, 49, left the big real estate company they worked for in Chicago to start their own development firm in 1993, the sunny weather of West Palm Beach played a role. "The warm water and being able to surf and fish year-round didn't hurt," says Aiken.
Even harder to measure is the importance of the city government's attitude toward Renaissance Partners, Aiken and Frisbie's eight-person company. "[West Palm Beach] had a depressed town center and a tax base that was going down," Aiken says. "The master plan was clearly written to invite big and small businesses to the community." The city's plan called for just the sort of building Aiken and Frisbie wanted to do, and city staff promised to expedite building permit and zoning requests to help the developers meet their critical timetables. The city followed through, and Renaissance Partners has developed several downtown blocks of boutique retail, residential lofts and a new mixed-use project, all of which are making West Palm Beach more attractive for lifestyle-seekers.
Not every government is so amenable, of course, but flexibility is more common in top-rated small-business cities. "There is no question that the city government has done a hell of a job," says Lou Hoffman, 42, who set up his 85-person Hoffman Agency public relations firm in downtown San Jose, California, eight years ago. Hoffman sits on a task force put together by the current mayor with the mandate to explain to city officials how to encourage start-ups in the city.
Perhaps the least tangible component of greatness is reputation. Hoffman says San Jose's stature as the epicenter of Silicon Valley turns heads as far away as Europe and Japan when he's presenting his firm to new prospects. "It's a differentiator, and part of our brand," he says. Abel, on the other hand, says the fact that Dallas is overlooked as a high-tech hub has helped him when competitors pass over the city for better-known, but much more combative, battlegrounds in Austin, Boston and the Silicon Valley.
Whether in or out of the limelight, success seems to breed success. Austin, for example, is now home to some 2,000 high-tech companies, including eight that went public in 1999, while the rest hauled in around $740 million in venture capital, according to Angelou Economic Advisors, an Austin economic development firm. "There are now plenty of models of how to succeed," says Peter Zandan, 47, chairman and founder of Austin-based Internet pricing consulting firm Zilliant, which has 40 employees. "And there's more energy than ever before going into entrepreneurship."