Why did Atlanta drop from #1 to #6 @cnnmoney's Top 10 List?

I don’t know.  Kinda like that shirt that Seinfeld gave his dad: “#1 Dad!”  I don’t know just how official these rankings really are.  That said, I did find the article interesting, especially the points of each city that the author brought out or quoted as having a positive effect on the entrepreneural attractiveness of that city.  Here’s the article.

You can read it yourself, but I’ve also put together a quick summary of the primary reasons each city was even on the list, though I still have no idea how the rankings actually work.  I could not resist the urge to insert some snark into many of my comments, but there are some real, legit patterns here that we in Atlanta can learn from.

1. Oklahoma City, OK

  • low cost of living
  • relatively low income tax (5.25%, compared to GA’s 6%)
  • ease of getting a business started – they mean government paperwork. Atlanta should pay attention here. Total pain.
  • healthcare, biotech – the author had added “and technology”, but I resisted the urge to ridicule that vanilla addition
  • revitalized downtown and several new business accelerators – all the cool kids always want to live intown

2. Miami, FL

3. Omaha, NE

  • “Silicon Prairie.” – Atlanta is still trying to come up with a nickname to emulate Silicon Valley, but we don’t make silicon, so…
  • Start-up costs and the cost of living – we’re similar in this respect
  • Great institutional support for entrepreneurs – not really sure what this means, though “institutional” tends to mean “university”. In Atlanta, GT is good and getting much better. How many other universities in the metro Atlanta area have done anything close to what GT has done?
  •  Fortune 500 companies like ConAgra (CAG), Berkshire Hathaway (BRKA) and Union Pacific Railroad – we have more: Coke, UPS, McKesson, Delta, Home Depot, just to name a few.

4. Raleigh, NC

  • Red Hat (RHT), Lenovo (LNVGF) and Quintiles (Q)
  • executives at these large companies are providing support and mentoring to new small businesses – Here’s a great concept. Dear Coke, UPS, McKesson, Delta, Home Depot, just to name a few, are your executives out helping the next generation of startups get off the ground?
  • Three major universities (known as the “Research Triangle”) – we have more, though they’re not in a triangle, and not all Basketball schools.
  • Tech, cleantech and life sciences, micro-breweries and clothing businesses

5. Nashville, TN

  • Healthcare is one of the largest and fastest-growing industries in Nashville, with over 250 companies employing more than 100,000 people.
  • No state tax here, and the city offers funding for new businesses: Gov Deal and Georgia Legislature, please note this one. We can fund the state government without a 6% state income tax, especially if we create hundreds of awesome startups with unicorn exits over the next 10-20 years.
  •  Nashville Business Incubation Center at Tennessee State University. The NBIC has up to 40 startups at a time, and companies can stay in the program for up to five years. It also offers low-interest loans of $25,000 to startups in the program. – again, we have ATDC, but I really think we need more actual incubators. How many does Atlanta have again?
  • Six major colleges – there’s definitely a pattern here, and we have everything required, but we need more of our universities to do as much as, or more than GT has done and is doing, and then they all need to actually tell people they’re doing it.

6. Atlanta, GA

  • Atlanta ranked No. 1 on the 2012 – this ranking was pre-ATV. How’d that happen?
  • Well-educated population: Over 47% of residents 25 years and older hold a bachelor’s degree or higher.
  •  NerdWallet’s top 10 list of the best cities for recent college graduates.
  •  Georgia State University – they just listed GSU, that’s it. GSU does have a very active entrepreneur program, but now 2 people know about it.
  •  Georgia Tech has one of the most well-known tech incubators – I’ve already mentioned ATDC.
  •  The city has made lots of overtures to attract startups, such as tax rebates – Anyone know more about this?  There’s the Opportunity Zones, which provide payroll tax credits after your second employee. Is that what they are referring to? Because that’s GA, not just Atlanta
  • Getting business licenses. That process has also been streamlined – in some municipalities, yes. City of Atlanta still needs work. This process should be so dirt simple you should be able to do it online in less than 15 minutes, with a credit card, and the City’s revenue in this area would increase.

7. Austin, TX

  • Low unemployment rate, low cost of living and educated population
  • No individual or corporate income tax – There’s that phrase again. If TX and TN can do it, so can GA.  Let’s start a movement!
  • Manufacturing, clean energy, digital media and life sciences
  • Private-sector funding is an area where things can still improve – surprised by this one. We’re talking about Dellionaires, and many, many, many other very successful tech exits and IPOs in Austin.
  • $600 million in VC money in Texas and 50% of that goes through Austin – kinda conflicts with the previous point, don’t you think?

8. Seattle, WA

  • Attracts pioneers to come and do their own thing
  • Microsoft (MSFT, Tech30), Starbucks (SBUX), Costco (COST) and Amazon (AMZN, Tech30) – definitely a mecca for tech monsters, which Atlanta needs more of, and we’re working on that.
  • Deep pipeline of private-sector funding and a strong mentoring network – they don’t mention “focused on, cut their teeth on, and are very comfortable with high technology”. We cannot say that about Atlanta yet. Atlanta VC cut its teeth on CRE, and we’re still young in tech.
  • Incubators and business programs at the University of Washington and community colleges – need more university incubators. How many startups and exits has ATDC (again, part of GT) created? Imagine if GSU, KSU, UGA, UWG, AU, MU, Spellman, Emory, Oglethorpe, CAU (and that’s not nearly the whole list) all had their own ATDC?!?  Or, maybe they do, and like GSU, now 3 people know about them. How do we fix this problem?

9. Denver, CO

  • Second-most educated workforce in the country
  • Colorado Technology Association to open a new center for entrepreneurship and technology. The center supports emerging high-growth companies by providing them with advisers, short-term leases and job opportunities.
  • I had to add another point, because I cannot believe that’s all they have to say about Denver. Denver is one of the absolute best places on the planet to live, period.  Into tech? Into outdoorsy stuff? Don’t go to Denver, because you will not want to leave, ever.  And Boulder didn’t even make this list, perhaps because the cheapest house there is a CU dorm, and that’s outrageous.

10. Memphis, TN

  • Piggly Wiggly, the very first grocery chain in the country, started here, as did the first Holiday Inn,” he said. “FedEx (FDX) and AutoZone (AZO) – good names, but not as good as Atlanta.
  • Several incubators and accelerators, many of which are focused on tech and medical devices – there’s that word again: incubator. How many do we have in Atlanta?
  • Cost of starting a business is also relatively low – Mayor Reed, are you reading this? And, yes, I know you’re the mayor of Atlanta, not “the metro Atlanta area.”
  • Doesn’t yet have a robust network of angel investors or venture capital, but small business loans from community and regional banks more than make up for it – Find this difficult to believe, especially in tech. Have you tried to get a loan to start a software or other tech company lately? Nah.

My Conclusions

  • We need more ATDC-looking incubators as well as private incubators.  We have one incubator (that I’m aware of) and one “accelerator”, though FlashPoint would probably not use that word to describe itself.
  • Atlanta’s VC are not focused on tech, which is ok. Not all startups are tech; however, it’s been quite common lately to hear of Atlanta-based tech firms getting CV or Angel money from outside Atlanta.  There’s a problem there.
  • Three of the Top 10 cities are in states with no income tax. That is extremely important and attractive.
  • The process of actually starting a business, which is the process that most people just do not want to do, the paperwork, getting incorporated and getting a license, is antiquated and should be made MailChimp simple.
  • We have everything else that every other city has.  We should be #1. Why aren’t we?  Why did Atlanta drop from #1 to #6 @cnnmoney’s Top 10 List?

Those are my conclusions. Feel free to disagree. What are yours?

 

 

 

What do you think about that?