Slicker Cities

When not just any metropolitan area will do, seek out one of these best cities for entrepreneurship.

When Dun & Bradstreet vice president of Analytical Services Jan Rowland ran the numbers for Entrepreneur and Dun & Bradstreet's 8th annual ranking of the best cities in the nation for entrepreneurship, one thing stuck out: Metropolitan areas in the South--from Texas to Florida and up through North Carolina--dominated the top 10. But it's the way that the South achieved its lofty position that she found intriguing.

"There are a significant number of new businesses [in the South] each year," she says. It's a trend that makes the area attractive to entrepreneurs. Having other young companies nearby represents an opportunity to grow business-to-business relationships, she notes, as they aren't yet locked into long-term supplier contracts. It's also a characteristic shared by at least one major northwestern city: Seattle.

No wonder these booming areas might tempt a business owner to move operations to a more friendly locale or open a branch office in these entrepreneurial hot spots. It's an expensive option for improving your business, but some entrepreneurs are willing to give it a try.

A Moving Experience

Seattle may have lost Boeing Co. to Chicago, but it just gained Aquatoy Inc.

In April, the aquatic toy manufacturer relocated to Seattle, No. 20 on this year's list, after pulling up stakes in Mountain View, California (right next to Silicon Valley's epicenter and this year's 13th best entrepreneurial city, San Jose).

The Emerald City probably won't consider Aquatoy compensation for the loss of the aerospace giant. The company's move, however, says something about Seattle's continuing attraction for entrepreneurs--if not corporate behemoths--which bodes well for the city's future.

"It has a high-energy environment," says Aquatoy president Wink Thorne, 36, who had lived in the city before moving to California. "Seattle is a bit more of a cosmopolitan city now. The resources are good: good work force, businesses, restaurants and theaters."

Those same qualities, of course, apply to the Silicon Valley he left behind. It's just that Mountain View and the surrounding towns lacked two crucial items as Thorne planned the future of his company: affordable space and plentiful employees.

In Seattle, Thorne found a 5,000-square-foot space evenly divided between office and warehouse in the fishing district. He was able to add five times the room he had in Mountain View for only twice the cost.

He also found that Seattle is teeming with talent. Better still, interviewing with a toy manufacturer doesn't turn off the area's potential employees. Silicon Valley tech snobs, in contrast, looked down their noses at the prospect of working for Thorne's firm. In the move, Thorne left behind all but one of his employees: his wife.

"We've been putting out ads for positions and been amazed at the responses vs. what we were getting in the Mountain View area," says Thorne. Cost is another huge factor in the search for qualified workers. To replace his office administrator, for instance, he'll pay 30 to 40 percent less than he'd paid in the Bay area.

With sales constantly growing and distribution contracts now in place with FAO Schwartz and Imaginarium, Thorne's move is paying off. He's a perfect poster child for the way a move can position a company for growth. But just how many entrepreneurs are willing to take such a drastic step?

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This article was originally published in the October 2001 print edition of Entrepreneur with the headline: Slicker Cities.

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