By Jim Jonassen, founder of JJA Venture Search
Tech startup scenes are emerging in many regions around the U.S., which share similar traits (an influx of VC capital, newly diversified career options) that attract top talent.
These regions also share the ability to home-grow their own talent at local universities and retain them with relatively high annual salary bumps.
Try to guess the Mystery Metro via the traits presented below, then read to the bottom to learn which city we’re talking about. And remember, this story is playing out in growing tech hubs nationwide.
Silicon Valley isn’t the only hotbed of growing technology companies. This is the story of another regional hub of innovation and entrepreneurship. We could tell you where it is now, but we’d rather focus on its general traits before revealing its precise location. Many other hubs are seeing similar growth because of these same traits, most of which revolve around recruiting and retaining talent.
Are you ready to guess the Mystery Metro?
Read on for clues. You’ll find the answer at the end of this story.
As the Great Recession unfolded 10 years ago, the Mystery Metro was only a minor startup outpost.
Today, it’s one of the world’s fastest-growing tech startup ecosystems. Last year, the Mystery Metro’s top 100 tech companies--19 of them launched within the last five years--increased headcount 24 percent. That’s about 10,000 jobs. The Mystery Metro’s tech startups raised about $5 billion last year, channeling an outsized chunk of those funds into bolstering their teams. Looking back on how this Mystery Metro's success unfolded, what were some of the catalysts for its growth?
The Metro has newly diverse tech career options.
Historically, the Mystery Metro was a tough sell for potential relocation candidates who’d be moving there to make a career move in tech. The Metro lacked a strong “backstop,” a selection of other opportunities to fall back on if the job fell through or the individual simply didn’t succeed. In headhunter-speak, there wasn’t enough “liquidity” on the buyer’s (employer’s) side. This scotched countless prospective hires. Now, things are different.
VC capital is flowing.
In Silicon Valley, VC ecosystems were well-entrenched 10 years ago. Investor-employer networks were several orders of magnitude deeper and more robust than in second-tier tech hubs like the Mystery Metro. But that has changed here, as in other emerging ecosystems. VC investments have nearly quadrupled in the Mystery Metro over the past five years, and 17 new funds set up shop locally in the last two years, doubling the number of local funds.
The Metro grows its own talent.
The Mystery Metro boasts nine engineering schools, and more engineers graduate annually here than in any other U.S. metro. More importantly, they’re finally sticking around. In years past, most of this young talent bought a one-way plane ticket the day after graduation. Today, they’re competing in startup pitch contests, interning at incubators and accelerators and doing evening or weekend coding for local ventures while still undergrads.
The surrounding market is huge.
There are 17.9 million residents in the five counties of the Mystery Metro, and it’s a major center of higher education with an 8.8-million-person workforce. There are 14 signiﬁcant industry clusters here including fashion, IT, manufacturing and design.
Talent gets bang for their buck.
Here, the average compensation for tech workers rose six percent last year (adjusted for cost of living) according to new data from Hired, a job search marketplace.
Investors are becoming bolder.
The Mystery Metro’s seed investors are evolving rapidly. Former seed-stage investment funds are now raising larger funds, writing bigger checks and moving beyond the classic “incubation and acceleration” with cohorts of startups. They’re looking more like later-stage VCs. The Mystery Region had 80 exits in 2016, including some household names.
And don’t forget the weather.
The Mystery Metro has a plenty of sunshine, beach access and a concentration of tech and digital jobs in a 15-square-mile triangle. The weather and topography are certainly not prerequisites, but they don’t hurt, at least not in this case.
Well, have you guessed our Mystery Metro?
It’s Los Angeles, now known by the moniker Silicon Beach. And it’s not the only tech hub that’s booming due to the traits above: Chicago, Austin and Charlotte have seen similar growth in recent years. Pay attention to cities with these traits as you plant and grow your company or career.
Like what you see? Follow Grow Wire on Twitter for more stories.