The New Start-up Scene: Silicon Strip to Silicon Mitten
It all started with a computer chip.
Coined 40 years ago, the term “Silicon Valley” originally referred to the silicon chip manufacturers that helped build the high-tech movement in the San Francisco Bay Area. The region has been a technology hot spot since, but today, it’s evolved from hardware giants into social technology and consumer internet, thanks to companies like Google and Facebook. “Silicon” is no longer literal, but a metonym for the entrepreneurial spirit that’s fueled the region’s growth for decades.
But the Bay Area isn’t this country’s only pocket of innovation, and “Silicon (fill-in-the-blank)” is an increasingly popular shorthand for regions with brewing start-up scenes. With predictions that start-ups will bring the United States out of its recession, entrepreneurs across America are stepping up to the plate. Here’s where the action is happening.
Silicon Alley (New York)
The subtle competition between Silicon Valley and the next-largest U.S. start-up scene is much like sibling rivalry—the regions might seem similar, but they certainly have their own personalities. Some Alley ventures are cut from the same social technology fabric as their Valley counterparts (Foursquare, Bitly), but most have a distinctly New York flavor. “We exemplify a new type of tech company that focuses on our established industries like fashion and advertising,” explains Manhattan-based entrepreneur Amanda Peyton. New York is home to innovative e-commerce companies Etsy, Warby Parker, Fab.com, Bonobos, and Artsy, and has been a hot spot for female-lead companies like Gilt, Birchbox, and Rent the Runway.
The Big Apple is also catching up quickly to the Valley when it comes to funding: It’s currently the second-most active market on AngelList.
Silicon Beach (Los Angeles)
Even though venture capitalist Mark Suster does his very best Regina George impression when he suggests we stop trying to make “Silicon Beach” happen, prominent L.A. angel investor Paige Craig continues to use the term to describe the city’s nascent tech scene.
And with at least 11 start-up incubators planned for 2012, the scene is getting hot. Beachmint, L.A.’s start-up darling, raised $23.5 million this year to expand its celebrity-partnered social commerce platform, and Craig’s company, BetterWorks, was just named one of Business Insider’s 20 Best New Start-ups of 2011.
Not surprisingly, L.A. entrepreneurs take advantage of their natural resources in the entertainment industry to start ventures like MovieClips and Machinima. Nothing goes with entertainment like lawyers, and contract simplifier DocRun is following in the steps of L.A. startup pioneer LegalZoom. “Even though L.A. is a big city, Silicon Beach makes it feel like a small town,” explains ShareSquare founder and L.A. StartupDigest curator Matthias Galica. “For years, we hemorrhaged talent to NorCal, but that’s starting to change.”
Silicon Strip (Las Vegas)
Shoe retailer Zappos has been based in the Las Vegas suburbs for nearly a decade, but it’s finally getting some company, thanks in part to CEO Tony Hsieh. His Downtown Project is making plans to turn Las Vegas into a meta-incubator of innovation and ideas: With $350 million committed to seed businesses and build infrastructure, it’s almost as though the city itself is a start-up. “In the last six weeks, at least four tech start-ups moved here from other states,” Hsieh explains excitedly. “We’re building this community from scratch—it’s Sin City to Sim City.”
This entrepreneurial renaissance is also evocative of a co-working space, where like-minded organizations come together to build a community. But what unites the diverse ventures—from robot maker Romotive to local marketplace Rumgr—isn’t their industry, it’s their founders’ desire to be part of the reinvention of a city.
Silicon Mitten (Michigan)
In the state shaped like a cold-weather accessory, Michigan residents fondly refer to their homeland as “The Mitten State,” and they’re not letting the cold—or the region’s economic decline—keep them down. From Ann Arbor’s clean tech scene to Detroit’s manufacturing-based start-ups, young entrepreneurs and forward-looking investors like Detroit Venture Partners and Ludlow Ventures are taking their state’s future in their own hands. As Texts From Last Night founder Ben Bator explains, “We realize that our dream job doesn’t exist, and so we have to make it.”
One thing Detroit isn’t short on is available real estate, and projects like the revitalization of the Madison Building downtown and Phil Cooley’s Pony Ride property in Corktown will provide much-needed incubator space for Motor City entrepreneurs.
Silicon Loop (Chicago)
“The characteristic that best defines the Chicago start-up scene is our Midwest benevolence,” says DreamChamps co-founder Jill Felska. “We all go out of our way to help each other succeed.”
Well, that and Groupon: Though collaboration runs through Chicagoland start-ups like 37signals, MentorMob, and Dabble, the daily deals site with a $12.5 billion valuation is shaping up to be the giant whose gravitational pull sparks a movement. Much as the “PayPal Mafia” is sometimes credited with fueling Silicon Valley’s Web 2.0 movement, a “Groupon Mafia” may just be the boom in Chicago-based innovation.
Silicon Beltway (Washington DC)
It’s hard to separate entrepreneurs from the start-up capital that makes their dreams possible. Whereas Silicon Valley has its cluster of venture capitalists on Sand Hill Road, the nation’s capital is teeming with foundations looking to make “investments” in social entrepreneurs. Although the Beltway has its share of consumer tech companies like Living Social, HotPads, and HelloWallet, the region’s unique flavor of social entrepreneurship is evident in ventures like Atlas Corps and Citizen Effect.
Silicon Prairie (Omaha, Des Moines, and Kansas City)
Think the Midwest can’t handle tech? Don’t tell that to the Silicon Prairie crew, who, despite limited access to incubators or coordinated groups of investors, have cultivated an impressive entrepreneurial community. “We’re flipping traditional Midwest risk aversion on its head,” says Silicon Prairie News founder and Big Omaha curator Jeff Slobotski.
Although the term “Silicon Prairie” has been used to describe the start-up landscape from Minnesota to Dallas, the movement is largely centered on Omaha, Des Moines, and Kansas City. The growing scene is just starting to inspire and connect the existing community, which includes an eclectic group of companies like online coaching app Hudl, mobile payments processor Dwolla, and bridal design by Princess Lasertron.
Though most start-ups today have little to do with silicon, there’s something powerful about the evolution of our lexicon to confer a greater meaning upon a simple chemical element. It’s not about chips anymore, it’s about communities of thinkers, dreamers, and doers who support one another to create the innovations of tomorrow. And that tomorrow can’t be confined to any valley.
Is there a start-up scene in your hometown? Let us know about your flavor of Silicon!
Photo courtesy of Allen McGregor.
About The Author
Anneke is a founding executive and leads the business side of Reserve, one of Fast Company's Most Innovative companies of 2016. She joined Reserve from the Google Creative Lab where she led teams building the future of tech. An advisor to NPR and a startup veteran, she is an experienced entrepreneur and storyteller who speaks and writes on topics related to technology and culture. She lives in Brooklyn and can be found online at @annekejong.