At first glance, Albuquerque, New Mexico doesn't look like a booming business city. Known more for scientists than startups, the city is home to zero Fortune 500 companies, has a weak real estate market and one of the highest income inequality gaps in the nation.

But that doesn't mean that startups can't succeed in the state's largest city. Skorpius Technologies closed a $19 million Series B round in 2011. There's also Lavu Inc., a high-tech iPad point-of-sale software company, which raised $15 million during a Series A round of funding (making it one of the largest early Series A funding in the state of New Mexico, according to Albuquerque Business First).

While Albuquerque still has a ways to go before its considered a startup hub, it has made significant progress. There's been an improvement and increase in the amount of resources to attract and retain entrepreneurs.

New Mexico, according to recent U.S. Census Bureau Data, is the state with the fourth-highest percent increase in the number of startups in the state from 2013 to 2014. Here's how its largest city built its startup scene from the ground up in the span of a few years:

1. Access to some of the most innovative minds in the country

The state of New Mexico is home to Los Alamos National Laboratory, the organization that built the first atomic weapon in the U.S. It also helped spearhead the Human Genome Project. And Albuquerque itself is home to Sandia National Laboratories, a national security and nuclear science research center.

All of which explains Albuqeurque's emphasis on innovation. According to 2014 U.S. Census Data, 14.4 percent of Albuquerque residents have a graduate or professional degree, compared to 11.4 percent nationally. 

"This has been an area traditionally rich in technology and innovation," says Bill Bice, president and chairman of startup accelerator ABQid, and the partner of seed-stage venture group the Verge Fund.

"What we haven't done a good job of, from an economic standpoint, is holding onto the value of what's been created here," he said.

To combat that, in 2014, the University of New Mexico, with the support of the New Mexico Angels Fund, launched a new initiative called Start-Up Factory, focused on taking the technologies developed in the University's research labs to market. 

2. Leaders realize how vital startups are to growing the economy

In 2010, when entrepreneurs Andy Lim and Corey Fiala launched Lavu, the city didn't have much of an entrepreneurial ecosystem. The state itself had no startup accelerators. Microsoft, founded in Albuquerque in 1975, was one of New Mexico's biggest success stories--but it's been long gone. It quickly moved its headquarters to Redmond, Washington in 1986.

"In comparison to when we started, and right now--it has literally been heaven and earth," says Lim, Lavu's CEO. "Right now, there's so much movement here in terms of startups, there's a lot of organizations being formed, there's a lot of help from the city and the government, and lot of help from the community leaders."

In the past two years, five accelerators have opened their doors, including ABQid, Creative Startups, and Hautepreneurs, which focuses on women-led startups.

Startup founders have also found an ally in Albuquerque mayor Richard Berry, who has made it his goal during his term to rebr the city as a " destination for entrepreneurs."

3. Assistance beyond the borders

In 2014, Kansas-City based Kauffman Foundation announced a pilot partnership with the city of Albuquerque, the first of its kind, to improve conditions for entrepreneurs in the city. 

That included selecting Albuquerque to host to the annual Kauffman Mayor's Conference on Entrepreneurship in 2015. This led to the launch of the Mayor's Prize for Entrepreneurship, which awards $200,000 grants to organizations that assist startups, and aiding in the launch of other entrepreneur-friendly programs.

"Kauffman's been very significant in creating the startup ecosystem in Albuquerque, and you know, there's not many organizations that know startups better than Kauffman," says Bice. 

Yet providing ample resources for entrepreneurs is only one of the first pieces of the puzzle that needs to be completed in order to make Albuquerque a desirable destination to do business. But if the city's history of innovation shows one thing, it's that the residents of Albuquerque aren't afraid to tackle challenging problems.