Silicon Valley is the most obvious place to start a tech company, right? There are investors standing on every street corner waiting to hand out cash, other entrepreneurs who can teach you the basics, and beautiful office spaces with ocean views for rent.
And, if you don't start the next Google or Facebook in the heart of Silicon Valley, there's New York City--that bastion of the publishing industry, electronics retailing, wearable tech devices, and the burgeoning small-factory maker movement.
Hold on a second. What if the best place to start a tech company is nowhere near either coast? In fact, what if the best city is Omaha?
In a recent study by the financial advice tech company SmartAsset (which deserves credit for its cheeky company name), it turned out Omaha is the top pick. The biggest reason? The cost of living in Omaha is almost half that of San Francisco (about 58 percent) and less than half that of New York (40 percent). That means renting office space is going to be quite a bit cheaper, as will buying a home and paying expenses.
Another surprise is that seven of the 10 top cities for tech startups are in the Midwest. Places like Columbus, Ohio, and Springfield, Illinois, rank higher than Chicago and Minneapolis. Iowa scored two cities on the list, Cedar Rapids and Dubuque.
According to the study, the costs of starting a company, including renting an office, transportation, and utilities, are much lower. It gives entrepreneurs a foothold to hire programmers, spend a little more on advertising and marketing, and get to market faster without the burden of heavy business expenses.
The rankings are based on three main factors: the number of tech workers, the typical compensation for tech workers, and the cost of living. Omaha ranked highest on the list also because of the average speed of its internet broadband, at 35Mbps. That's 50 percent greater than the national average, according to SmartAsset. The main reason the two Iowa cities rank so high is because of the cost of living there, which is about 92 percent of the national average.
What does it really mean? For those thinking of creating a new iPhone app or a website, it's a good idea to think about how much money you will need for the fundamentals--paying rent, hiring workers, and paying utilities. In San Francisco, employees will pay much more to live and therefore demand a much higher salary.
Welcome to the big time, Omaha!