50 Surge Cities
From Inc. and Starup Genome
No. 1
Austin-Round Rock, TX See page 34.
No. 2
Salt Lake City, UT
No. 3
Raleigh, NC See page 22.
No. 4
Nashville-Davidson-Murfreesboro-Franklin, TN See page 46.
No. 5
San Francisco-Oakland-Hayward, CA
Silicon Valley might need a new name. While it’s still home to plenty of startup activity, the tech industry’s vanguard largely have moved 50 miles north to San Francisco. The Bay Area’s biggest-name startups—including Uber, Airbnb, and Slack—have taken root here, along with influential VC firms, like Benchmark. The migration is due to downsizing—thanks to cloud computing, software companies don’t need server rooms. Meanwhile, they can outsource business functions via Gusto and Zendesk. The main obstacle is the astronomical commercial rents—think $100 a square foot—and the higher salaries the cost of living requires. It’s a little cheaper in Oakland and Hayward, where food-science and energy startups are flourishing. Among the best-funded is the solar-panel financing company Mosaic, with $487 million in capital. —JEFF BERCOVICI
No. 6
San Jose-Sunnyvale-Santa Clara, CA
Fifty years ago, the fertile land between the Santa Cruz and Diablo mountains was covered in apricot and cherry orchards. Then came the semiconductor firms and three of the world’s most valuable companies—Apple, Google, and Facebook. While those firms—and nearby Stanford University—funnel a steady supply of would-be founders and talent, their sheer size has hindered the growth of the startup ecosystem. A critical shortage of office space and housing—San Jose has the highest home prices in the U.S.—has forced even the giants to get creative: Facebook plans to put up to 5,000 employees in a Mountain View WeWork, and it is building apartments near its campus. —J.B.
No. 7
San Diego-Carlsbad, CA
San Francisco may dominate software, but California’s southernmost city is the place for startups focused on life sciences and aerospace. Entrepreneurs can draw talent from the UC, San Diego campus and the surrounding military bases, as well as the offices of industry majors, including pharmaceutical giant GlaxoSmithKline and defense contractor Northrop Grumman. In 2012, Southern California’s largest commercial real estate company partnered with EvoNexus, a local incubator, to create startup co-working space the Vine. The larger community has flourished since; several biotech companies—Samumed, Gossamer Bio, Crinetics, ChaSerg Technology—have raised hundreds of millions of dollars or filed to go public this year. GoFundMe, the crowdfunding site, is now a household
