Plano has ranked No. 2 on Fundera’s list of the Best Untapped Cities for Startups in 2020.
The ranking is based several factors, including access to a talented labor pool, average labor cost, office space cost, cost of living and proximity to a larger startup ecosystem.
According to Fundera’s analysis, Plano benefits from its proximity to Dallas-Ft. Worth. With 57.5 percent of the city’s population holding a degree, Plano begins with an advantage, which helps balance a higher average lease cost of office space at $22.22 per square foot. This is also offset by a relatively low cost of living and a high median income.
The location of your startup could have a big impact on its growth and eventual success. The interest of investors in your startup, the availability of talent in the local labor pool, and an area’s cost of living can all work in a company’s favor or against it.
Startup culture is centered in a few regions in the United States. The Silicon Valley Bay Area accounts for 45 percent of total venture capital investment in the U.S. When you add in other startup hubs, such as New York, Boston, and Seattle, it covers nearly three-quarters of the country’s venture capital investment. Many experts have called out so-called “second tier” startup cities, such as Portland and Austin, but even those regions are now becoming costly and saturated for would-be entrepreneurs.
The top three cities – Madison, Plano and St. Paul – earned high points for a combination of access to a well-educated local labor pool and a relatively modest cost of doing business.
A city with excellent feeder universities was likely to have a well-educated population and thus rank highly. Durham, St. Paul, and Madison all boast great nearby universities and an above-average concentration of residents with bachelor’s degrees.
A city with low office space rental rates was also more likely to rank highly, though some cities like Plano with higher rates still ranked well due to steady or slow annual growth in the cost of office space.
Several cities that are close to startup hubs, like Oakland with its proximity to San Francisco, didn’t make the top 11 because these are already too expensive.
Smaller cities in California – including Bakersfield and Chula Vista – were weighed down by a lower percentage of educated workers, and thus ranked toward the bottom.