Nothing grabs a reader's attention like news about his or her hometown. So it came as no surprise to us to receive numerous letters about our December feature " Best Cities to Start and Grow a Company in Now." Readers wrote in about everything from the downside of the cities we listed to the challenges of changing locations.
Lies, damn lies, and statistics?
Inc. used statistics from Cognetics Inc., an economic-research company, to create the lists published in December's "Best Cities to Start and Grow a Company in Now." One reader took issue with the rankings.
Tallahassee has had more companies on the Inc. 500 list the past two years than any other city in Florida except Miami, so we were surprised to learn in your December issue that as a good place to start a business, we had "plunged," from 13th place to 51st. Research by the Brandow Co., an economic-research company whose methodology we feel better captures current trends than the Cognetics model your magazine uses, indicates that Tallahassee's technology-company concentrations are "above average and pulling away" and that our three-year technology-start-up rate is 14% above the national average. Our surviving technology companies exhibit stronger-than-average growth in both employment and sales. Growth in key technology clusters was one of the reasons Forbes recently ranked Tallahassee 37th among 200 metro areas, both large and small, as a good place to do business.
Economic Development Council of Tallahassee/Leon County
The editors respond: Comparing statistical models carries with it the danger of comparing apples with oranges. The Cognetics survey has the advantage of having consistently tracked the success rate of start-ups and young, growing companies -- all types of young companies, not just those in the technology sector -- since 1993. That gives it a strong basis for historical comparison.
Another reader reminded us that statistics don't always tell the whole story.
I noticed my own town, Huntington, W. Va., on your "best cities" list and was somewhat surprised. Since I have started businesses here, I know from experience that it's not a good place in which to do so.
For starters, West Virginia is notorious for its business-vicious tax base. Recently, I received a tax form from the state requiring me to pay taxes on all my business property -- which, it turned out, included my personal property. The state even wanted me to pay taxes on the books in my library at home!
Perhaps you did not consider that West Virginians pay more for their food than the citizens of many other states do, while they earn much less. The health of the general public is poor; that should concern an employer in regard to sick days and insurance premiums. There is also a severe shortage of housing. It seems that "suitable housing" for renters often does not include working toilets and drains. Business property is also overpriced and frequently in disrepair.
In short, if I had my druthers and the money, in 2001 I would go elsewhere.
Huntington, W. Va.
This reader wrote in response to " The Location Advantage," by senior staff writer Emily Barker, which profiled several CEOs who had moved their companies, some for personal reasons and some for business reasons.
Your recent feature raised many important issues about location choice. I'm a site-selection consultant with more than a decade's experience working with companies on relocations, expansions, and consolidations.
The emphasis on personal versus business reasons for location choice is important. One reason people start companies is to gain more control over the choices in their lives. But the best personal choice may not be the best business choice. For example, a company founder may set up shop near the beach because that's where he or she wants to live. However, that location may not, in the long run, be the best choice for the company -- and moving could mean betting the business. The costs and risks of moving between cities increase as a company grows. Losing people and their intellectual capital are the critical risks, especially in small, fast-growing companies where few things may be written down.
Splitting the company also raises other issues. Many companies operate with geographically decentralized facilities. However, such an arrangement may pose hurdles for small, growing companies. After all, proximity and face-to-face communications are most important when issues are evolving and unusual rather than routine and when rapid, iterative feedback is critical.
Finally, put financial incentives like tax credits in their proper role. First, find places that make sense for operating the business, and then consider the financial incentives. Incentives rarely, if ever, make a bad choice good for the long term. It's understandable that entrepreneurial companies in search of capital might seize on funding incentives. But as a lot of recent dot-com busts are reminding us, funding isn't everything.
In his December article " The South Shall Ride Again," senior feature writer Edward O. Welles described Confederate Motorcycles, a controversially named motorcycle-manufacturing company. This reader objected to our publishing the story, because of the company's name and the founder's attitude toward the Civil War.
I found your article on Confederate Motorcycles to be lacking in any perspective on the "War of Northern Aggression." Speaking as someone whose family was never considered human -- much less citizens of the United States -- until the passage of the 13th, 14th, and 15th Amendments, I find it difficult to accept tired homilies on "individual empowerment and those advocating centralized power." Am I the only one who finds it less than morally honest to state that slave owners were fighting for individual empowerment?
While Inc. magazine is not the place to debate the historical rationale behind the Civil War, it certainly is a place where people go to find business and investment ideas. Does your magazine really want to encourage investment in companies inspired by the oldest terrorist organization in the country? Some of your readers may not know what the KKK is, and your magazine could almost leave the impression that it was a southern gentlemen's club.
Understand that I do not believe it should be against the law for Mat Chambers to name his business anything he wants. If he chooses to honor an early leader of the KKK with a namesake model, that's fine with me. I do have a problem with your magazine deciding to give him a platform to espouse nonsense to the public at large and to provide free advertising to his sanitized message of hatred.
New York City
Me, myself, and I
In his December article, contributor David H. Freedman explored a challenging question: " What do teens want?" He interviewed pop -punk band Blink-182 to find out how it has managed to successfully market itself to such a notoriously fickle group of consumers. This reader points out another subtlety of marketing to teens.
In "What Do Teens Want?" David Freedman observes that "businesses can discover large, lucrative niches by orienting themselves toward a particular teen lifestyle -- jocky, artsy, hip-hop, and so forth." While this is true, caution must be used with this sort of demographic segmentation. Our design firm specializes in addressing the Generation Y market, and the teens we've talked to have had mixed reactions to our attempts to segment them into groups according to interests, music, politics, and so on. Although kids (and adults, for that matter) are prone to enter into lifestyle niches that give them identity and a sense of belonging, few wish to be strictly identified by those niches. Most kids, when asked what subculture they belong to, answer that they belong to several or none in particular. For Gen Y, the desire to be an individual trumps the desire to belong, and marketers are wise to appeal to young people as free agents rather than as members of a subculture.
No prize for Nobel?
In December's Inc. Case Study, " The ABCs of Profit," senior feature writer Edward O. Welles profiled Nobel Learning Communities, a for-profit education company. This reader noted that part of Nobel's success stems from the fact that the students who can afford to go to Nobel's schools are more likely to be good students from the start.
I'm a middle-school counselor and also own a small business. I think it's good that businesses like Nobel Learning Communities are taking an active run at education as a for-profit field. What prompted my writing was the statistic that the typical 1st grader attending Nobel reads at a 3rd-grade level, and that by the 7th grade the student will be performing at a 10th-grade level. That's good, but nothing to crow too loudly about.
In the public school where I work, a third of the children start out about three years behind grade level. A professor I had in college once pointed out that there is no glory in starting with the cream of the crop and producing cream, and Nobel is most definitely starting with the cream.
Can an education business start with average or below-average students, as public educators must, and produce that same kind of cream?
Jefferson Middle School
Rocky Ford, Colo.
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