SURGING AHEAD
Best areas for startup firms to enjoy growth spurts
Once a recurring punch line in Johnny Carson’s monologues, the agriculture and oil town of Bakersfield, California, may not be the most obvious example of a West Coast startup hub. But the Central Valley city, population 400,000, has vaulted onto this year’s Inc. Surge Cities list by outperforming several other major metropolitan areas in net job and business creation in the past year.
For the 2020 index, Inc. and innovation policy company Startup Genome analyzed data on seven essential indicators, such as earlystage funding and job creation, to determine the 50 best areas for startup growth. Austin came out on top, and Salt Lake City was second.
Bakersfield, which landed at No. 27, may surprise people, but not those who live there.
“Incredible things are happening here,” says Irma Olguin Jr., cofounder and CEO of Bitwise Industries, a Fresno-based tech academy and software startup that’s helped create about 1,000 jobs in the Bakersfield area. It’s opening a Bakersfield location this year. “We’re seeing validation from VCs and investment banks, and there is a momentum around local revitalization.”
According to Anna Smith, cofounder of local real estate firm Sage Equities, this Bakersfield boom has been helped by entrepreneurial millennials who have returned home from more expensive cities. They’re finding a growing tech community, bolstered by events like the 59-day hackathon led by nonprofit 59DaysofCode.
Latinx founders, whose ranks swelled by 36% from 2007 to 2012 in Bakersfield, have also been essential to the city’s evolution.
Today, approximately three of every 10 companies in town are Latinx owned, and membership for Bakersfield’s Hispanic Chamber of Commerce has ballooned from 200
businesses to 1,200 in less than a decade.
Rosibel Hurst’s Bellissima Medical Aesthetics is one of 8,500 local Latinx-owned businesses. In 2014, the founder, who was born in Honduras, launched her beauty clinic, which offers procedures such as Botox injections and skin-tightening treatments, from a single room inside of a supportive doctor’s office.
Today, Bellissima is profitable, with roughly $2 million in annual sales and 13 employees.
“I was able to grow this company because of the help I got from people here,” she says. “Bakersfield is a giving city.”
As the field of startups grows in Bakersfield, so do the resources to sustain it. In 2018, Bakersfield businessman John-Paul Lake cofounded the city’s first angel investing firm, Kern Venture Group, and worked with the city’s community college to create Launchpad, which helps local entrepreneurs grow their businesses.
Originally created in Fresno to assist refugee farmers, loan fund Access Plus Capital has doled out 22 microloans worth more than $1.6 million to Bakersfield entrepreneurs since it began servicing the city in 2012.
“People are realizing that the Central Valley is changing,” says Edward Palomar, manager of the fund’s Bakersfield office, which opened in 2017. “They see the opportunity for growth here.”
The Inc. Surge Cities list has big-ticket towns, but also several places where you can find office space and talent without breaking the bank.
Looking for a charming college town with worldclass research institutions and earlystage funding? Shift your gaze from Boston to Madison, Wisconsin, where new VC firms take chances on companies like Alex Kubicek’s weather startup, Understory. Kubicek launched in Madison, couldn’t find funding and relocated to Boston in 2013. He’s since moved back to Madison and secured $22 million, including two $7.5 million rounds led by local VC 4490 Ventures.