The worst metro centers are Detroit and New Orleans, both with none, followed by Philadelphia and Milwaukee, with one apiece; Chicago, with 3; Los Angeles, with 5; and New York City, with just a slight fraction more than one company for every million residents.
If most growth companies were loath to set up shop in the big burgs, they didn't hesitate to camp just outside. Plotted on a map of the United States, the companies in this year's pack often fall in ringlike patterns around large and midsize cities. Call it the entrepreneurial-orbit effect. Its laws require growth companies to get out of the city to escape cost but to stay near enough to tap vendors and customers. The result: a radial colony of companies circling the cities they can't live in but can't live entirely without, either.
Take Washington, D.C., which posted only 4 companies to the list this year. Not a bad showing for a city of 600,000. But look 10 miles out in all directions and you'll find 29 more Inc. 500 companies ringing the district. Look 30 miles out and the count surges by another 7. Chicago, host to only 3 companies inside its borders, supports another 17 within a 30-mile radius. Los Angeles, with only 5 companies located within its 467 square miles, is orbited by another 12 growth fiends. Augmenting the 8 companies with a New York, N.Y., return address are another 30 within 40 miles of midtown Manhattan. There are four times as many businesses orbiting Boston as are docked there.
Big cities do, in fact, support entrepreneurial life. But only from a distance. Indeed, proximity to a large city is practically a prerequisite for truly explosive growth. Most of the fastest-growing companies on this list are located near the largest cities in the country. There are 217 companies doing business within 10 miles of the 100 largest cities in the United States, and 170 more within a 30-mile arc.
* * *
The Edge Cities
These high-flying founders prefer living on the edge. Just look where they congregate: Of the top 10 companies on this year's list, 6 are doing business from edge cities, the border towns that have proliferated in the last decade on the outskirts of more congested metropolitan areas. Detroit might be a wasteland for growth companies, but Southfield, Mich., not even 10 miles away from the city limits, boasts 3, or one for every 25,000 residents. Job centers as well as residential communities, edge cities are expected to become the new economy's entrepreneurial frontier. Here's where the business builders on this list are sowing tomorrow's jobs:
The Top 10 Edge Cities: Sterling, Va.; Burlington, Mass.; Kirkland, Wash.; Chesterfield, Mo.; Rockville, Md.; Bethesda, Md.; Walnut Creek, Calif.; Alexandria, Va.; Arlington, Va.; Southfield, Mich.
* * *
Best of Show
Welcome to Boulder, Colo., Rocky Mountain resort for the entrepreneurial elite. Granted, no tour guide would admit it, but with 6 Inc. 500 companies calling Boulder home, this scenic city of 93,000 holds the bragging rights to one of the densest concentrations of high-growth companies in the country. Since 1990 more than 1,300 businesses -- an average of about 25 a month -- have sprouted in or relocated to Boulder. Even as the city's largest employers have downsized, its job growth has run double the national average. So it's no anomaly that Boulder County has been rated best of show by bankers and economists tracking the Mountain Region's booming economy. Or that a cadre of Inc. 500 companies should camp there.
If there's any surprise in Boulder's good fortune, it's in how easily it's been won. "You don't have to sell too hard when you're Boulder," reports André Pettigrew, who until recently was vice-president of economic development for the Boulder Development Commission. The natural beauty that surrounds the place, long a magnet for outdoor enthusiasts and the granola set, is hardly a secret. But its less obvious assets -- a well-educated workforce, world-class research facilities, and a rich technology base -- have in recent years inspired as many entrepreneurs as triathletes.
With more than half a dozen venture-capital firms based there, and a wealth of technology spinning out of private as well as public labs, companies such as Marc Rochkind's $11.4-million XVT Software (#72) needn't make excuses to Silicon Valley. "Nobody asks why you are here," says Rochkind.
Recruiting, the eternal challenge for understaffed growth machines, just isn't a big deal when your offices overlook a glacier. Even though salaries are lower in Boulder than in Silicon Valley, Matt McConnell, CEO of Compatible Systems (#315), a networking business that grossed $3.5 million last year, reports a backlog of job candidates from California. "The flood of résumés has been unbelievable," he says.
Then, of course, there's the karma of the place -- a very literal advantage for Tami Simon of Sounds True (#247), a publisher and marketer of audiotapes on psychology, spirituality, and meditation. Home to Naropa Institute, the first accredited Buddhist college in the country, Boulder is also a bastion of New Age thinkers and spiritual guides, just the sort of people Simon relies on to record and listen to her tapes. "We have an incredible base of authors and customers here," she says. Like Simon, Felix Magowan, president of Inside Communications (#388), benefits from the synergies of doing business in Boulder: he publishes sports magazines in a city that is a mecca for Olympic athletes and sports enthusiasts.
