Americans are born with an entrepreneurial streak. It's in our DNA. From Manifest Destiny and the Gold Rush to the Industrial Revolution and the Internet Age, intense periods of innovation have molded our economy and sparked important societal advancements.
But innovation is never easy. Hardship and necessity underpin much of our entrepreneurial progress. This occurs largely because the motivation to enter the unknown in the face of bleak odds simply is not in abundance when more comfortable avenues remain to be explored.
Driven by a dearth of traditional job opportunities and a reenergized hesitancy to put one's fate in the hands of others, nearly 54 million Americans are now working for themselves. There is always room in the market for new ideas, products, services and multi-million-dollar success stories if one knows where to look.
In order to help aspiring entrepreneurs, from restaurant owners to high tech movers and shakers, maximize their chances for long term prosperity, WalletHub's analysts compared the relative startup opportunities that exist in the 150 most populated U.S. cities. We did so using 16 key metrics ranging from five year survival rate to office space affordability to educational attainment of the local labor force.
As current self employment figures have shown, an increasing number of Americans aim to become more economically self reliant by working for themselves. To assist them in that goal, WalletHub asked some of the foremost entrepreneurship experts what advice they would offer an aspiring entrepreneur.
- How important is the city an entrepreneur picks to start a new company?
- Which are some of the biggest mistakes entrepreneurs make?
- Besides technology, what other sector is ripe for disruption by entrepreneurs? What is the next big thing?
- What is the best source of funding for new companies?
- What is the most effective way state and local authorities can stimulate entrepreneurship and new business development?
Vinit Nijhawan
Lecturer in Strategy and Innovation in the Questrom School of Business at Boston University
What tips would you offer an aspiring entrepreneur?
How important is the city an entrepreneur picks to start a new company?
Quite important. Cities are known for certain areas of focus and as a result, both talent and funding resources are concentrated around that focus. For example, if one is starting a consumer focused software platform, San Francisco is ideal or, if a life sciences company, Boston is ideal.
What are some of the biggest mistakes entrepreneurs make?
Scaling (increasing sales volume) too early. The metaphor I use: You must be dialed into the exact frequency of a radio station before you turn up the volume so you get music not noise.
Besides technology, what other sector is ripe for disruption by entrepreneurs? What is the next big thing?
Every segment can be disrupted by technology: Uber disrupted taxi, AirBnB hotels. The next areas of disruption are many but I like the intersection of computing and biology.
What is the best source of funding for new companies?
Customer revenue, i.e., bootstrapping (using internal funds and not external capital).
What is the most effective way state and local authorities can stimulate entrepreneurship and new business development?
Get the basics right: affordable housing and public transportation. Millennials, who are very interested in starting companies, do not want to own cars and want to live in urban cores. Next, make the regulatory environment easier for startups. Finally, attract investors by using matching funds.
Anil K. Gupta
Michael Dingman Chair in Strategy, Globalization & Entrepreneurship in the Smith School of Business at University of Maryland
What tips would you offer an aspiring entrepreneur?
Smart entrepreneurs are different from your run of the mill entrepreneur. Smart entrepreneurs do not per se believe in risk taking. Rather, they're exceptionally focused on reducing the risk. What others see as a risky move is not particularly risky from their own point of view.
How important is the city an entrepreneur picks to start a new company?
Very important because it is the eco-system that provides the new company with ideas, team members, and early investors.
What are some of the biggest mistakes entrepreneurs make?
Lack of clarity about who your target customer is and what value you intend to create for that customer.
Besides technology, what other sector is ripe for disruption by entrepreneurs? What is the next big thing?
As software continues eating up the world, every industry is ripe for disruption. Just look at retail, cars, and banking. This process is underway in every industry.
What is the best source of funding for new companies?
Ideally, incubators (an organization designed to support start up companies, often government funded) and/or accelerators (investment in time or money made in return for equity).
What is the most effective way state and local authorities can stimulate entrepreneurship and new business development?
Create incubators where budding entrepreneurs can get going with initial support and low fixed costs.
