Where Should I Locate My Next Tech Hub?

So your city is blowing up as a tech hot-spot! You almost got hit by a Bird on your way to the office, your barista’s beard is getting out of control and your only options for lunch are served out of a refurbished school bus. Your town is on the move! Good news, right?

Not if you’re an executive looking to recruit top talent to your growing business. We get calls on a weekly basis from clients looking to expand into locations where they will not need to compete with the likes of Amazon, Apple and Facebook. Below are the cities our clients ask us about most frequently (in alphabetical order, as not to offend) along with some nuances to think about if they are on your list of places to open an office.

Atlanta, GA

Accessibility: High. One of the best international airports in the country.
Cost of living: Low. Great place to buy a huge house for very little money.
Strength of IT/Tech talent: There is less talent on the true software development and innovation side, but there is a strong presence of Fortune 500 companies with large tech and IT teams, including Home Depot, UPS, Delta, Coca-Cola, First Data and SunTrust.
Other insights: There is also a heavy payments, security and HR-tech ecosystem here if that’s relevant to your needs.

Austin, TX

Accessibility: Mid to high.
Cost of living: Getting higher by the minute. I love Austin, but if you think this city is a hidden gem for tech talent, you are about five years too late.
Strength of IT/Tech talent: Very strong tech and IT talent. As San Francisco housing prices continue to rise, Bay Area tech talent flocks to Austin, and as you’ve probably seen in the news, large tech companies are right behind them. While less expensive than the Bay Area, Austin is no longer the low-cost hidden secret it was years ago. However, there is a great mix of both young engineering talent coming out of top universities along with more tenured executive talent who grew up at legacy companies of scale such as Dell and AMD.

Bozeman, MT

Accessibility: Medium (depending on where you are coming from).
Cost of living: Depends (but higher than you would think).
Strength of IT/Tech talent: Not a huge pool, but high quality software talent.

Boston, MA

Accessibility: High.
Cost of living: High.
Strength of IT/Tech talent: More true software, systems and hardware development talent than backend IT. A killer university ecosystem, including MIT, which pumps out some of the world’s strongest technical talent.

Chicago, IL

Accessibility: High. General traffic is getting worse as young people move to the city, but it’s definitely an up-and-coming tech hub that I believe is underappreciated. It’s hard to get people to relocate to Chicago if they haven’t lived there before. However, it’s not as difficult if they have Midwest family or school ties. We’ve done this many times.
Cost of living: Low, yet still an enormous amount of young people in the city.
Strength of IT/Tech talent: We have had a lot of tech startup clients, as well as large multinationals in Chicago (and surrounding suburbs), over the years. You can see some of the tech startup scene showcased at https://www.builtinchicago.org – a great place for local insights. Many people like to say Chicago is like the Austin tech scene 3-5 years ago. There is a lot of young talent that comes out of the high caliber universities in the area, including Northwestern and DePaul. Unfortunately, because the tech scene is fairly young, there’s less executive-level talent in the area outside of legacy Motorola and Schlumberger people. There are many startup executives with less gray hair management, which makes it difficult to recruit at the executive level. We see this changing in 5-10 years as these companies achieve scale.
Other insights: We’ve seen lower employee turnover in Chicago compared to other areas. Culturally, people hang around longer. There’s much more company loyalty and camaraderie.
As it relates to functional expertise, Chicago is a strong market for enterprise architecture (EA). There are enough Fortune 500 companies in industries that value EA, such as financial services, travel and insurance.
As it relates to the type of tech product talent, Chicago has roots in wireless and mobility, but we’re seeing an increasing number of direct-to-consumer- and payment/commerce-related companies with talent coming out of the likes of Groupon and Braintree.

Charlotte, NC

Accessibility: High. Very easy to get in and out.
Cost of living: Medium.
Strength of IT/Tech talent: Strong IT talent – mostly tied to banking and other financial services. Lots of IT folks – less on the technical innovation side.

Columbus, OH

Accessibility: Not great. John Glenn International Airport is consistently ranked as one of the worst in the country.
Cost of living: Very low. However, it’s difficult to get people to relocate to Columbus unless they have family ties.
Strength of IT/Tech talent: We do not have much experience recruiting tech talent here. It’s a big university town but not known for tech programs. There are a lot of government-focused businesses. For this reason, there are more Juris Doctorate than computer science degrees.

Dallas, TX

Accessibility: High.
Cost of living: Low. Median real estate purchase price is $197K. Very attractive for relocating candidates with young families if you can stand the summer heat.
Strength of IT/Tech talent: Lots of IT and true tech talent. Dallas is now ranked as one of America’s fastest growing tech centers. All of the banks have major development centers there – JPMC and Citi leading the way. Dallas now has the seventh highest concentration of tech jobs in the country. It’s one of just four cities that have regional U.S. patent and trademark offices, a nod to the number of patents produced there. Less innovation-focused but high IT concentration.
Other insights: SPMB has team members located in Dallas!

Denver & Boulder, CO

Accessibility: Denver – High. Right smack in the middle of the country. Boulder – A little further out.
Cost of living: Denver was SPMB’s first office location outside of San Francisco many years ago, and we could not be happier with the outcome. We’ve had a number of our best SF-based employees move to Denver when it was time to settle down and buy a home. It’s been an incredible move for the company. While Denver is a cost-efficient location to do business, Boulder can be on the pricier side. It’s an amazing place to settle down, but living within the city limits can be expensive. However, you do not have to go far outside of Boulder to find great space at a more affordable price.
Strength of IT/Tech talent: Colorado’s tech scene has witnessed a huge amount of investment and growth in the past decade. As VC and PE investors are priced out of Silicon Valley deals, Colorado has become much more attractive to them. Large public companies in a variety of sectors have also caught on and are moving large parts of their tech organizations to the area. Most of the large banks and media companies have major development centers in Denver.
Other insights: SPMB has an office (our second largest) in Denver, and we’d love to host you!

Indianapolis, IN

Accessibility: Medium. Centrally located but not a lot of direct flights.
Cost of living: Low.
Strength of IT/Tech talent: We have not seen a strong tech talent pool outside of a few one-offs. Many of those executives commute from Minnesota to Chicago and surrounding tech hubs.

Kansas City, KS

Accessibility: Medium. Centrally located but not a lot of direct flights.
Cost of living: Low.
Strength of IT/Tech talent: Not much going on in Kansas City outside of legacy Sprint folks and the technology vendor ecosystem selling into Sprint. However, Wichita has some interesting legacy tech talent more on the vendor versus corporate side.

Los Angeles, CA

Accessibility: High. LAX is literally next door (see above).
Cost of living: Medium to high (depending on how far you want to commute).
Strength of IT/Tech talent: Silicon Valley companies are rushing to LA in search of streaming and media talent. Los Angeles is not known for its deep technical roots. Furthermore, the local talent is more content-focused (where many companies are headed as they try to build subscription / recurring revenue businesses), but LA is getting more interesting by the day with new and well-funded direct-to-consumer businesses popping up all over the place.
Other insights: SPMB opened an office right by the YouTube campus in Playa Vista – please come visit us!

Minneapolis, MN

Accessibility: High.
Cost of living: Low.
Strength of IT/Tech talent: Strong location for the customer experience and enterprise architecture roles in sectors such as retail. Target and Best Buy both have big IT offices here. It’s also a big health care town. Health care IT is a booming field, which we find is more innovative than many non-tech industry verticals.
Other insights: People in Minnesota love Minnesota, and they have no interest in leaving. Very hard to relocate people from here unless they are transplants that hate the winters. If you find someone that grew up here, chances are they would love to move back.

Nashville, TN

Accessibility: High (depending on where you are coming from).
Cost of living: Very low.
Strength of IT/Tech talent: We are not aware of a deep talent pool in the area. We have seen a few disparate startups throughout Tennessee, but it has not been consistent. Those companies have been split between Nashville and Memphis, so we have not seen consistency or true market opportunity here.

New York, NY

Accessibility: High.
Cost of living: Very high.
Strength of IT/Tech talent: New York is attracting a lot of VC and PE investment. Most innovation is happening in the marketing and media tech space with enterprise software space catching up. Audible and Spotify are throwing off some good streaming and subscription focused talent, but less so at the executive ranks. The market is still maturing, but we are very bullish.

Philadelphia, PA

Accessibility: High and commutable from other East Coast hubs. Great train system connecting the east coast.
Cost of living: Low to medium.
Strength of IT/Tech talent: Most technology talent grew up in the media and health care sectors coming out of companies such as AmerisourceBergen. There is also a strong university system feeding the market.

Phoenix, AZ

Accessibility: Medium.
Cost of living: Very low.
Strength of IT/Tech talent: Many Silicon Valley companies have remote offices here. There’s mid-level tech talent galore. However, a lot of this is tied to services-focused businesses, such as managed service providers and call centers.

Pittsburgh, PA

Accessibility: High
Cost of living: Low.
Strength of IT/Tech talent: Pittsburgh is very much an up-and-coming and hidden tech scene. Several major technology companies, including Uber, Facebook, Apple, Bosch, GE and Tata, have opened technical or research offices in Pittsburgh in the past five years. Ford announced in early 2017 that it would invest in the Pittsburgh-based autonomous vehicle startup Argo AI. Additionally, Petuum, an artificial intelligence startup, said it raised $93M in October 2017.
Other insights: Carnegie Mellon (CMU) is an amazing tech and data feeder school. Superb talent with few places to land, so head to Pittsburg and lock that talent pool down!

Portland, OR

Accessibility: Medium.
Cost of living: Low, but creeping up.
Strength of IT/Tech talent: Many Silicon Valley companies have opened remote offices in Portland. Portland was a career outpost five years ago, but young talent is now flocking there as they are priced out of San Francisco and Seattle. Companies like Elemental Technologies (which my firm helped build out from scratch), recently acquired by Amazon (to become Amazon AWS Video), have created investor and employee wealth that has been reinvested into the startup community. Great location for video and DevOps experience, specifically.

Raleigh/Durham, NC

Accessibility: High. Easy to get to places from there.
Cost of living: Low. High quality of life.
Strength of IT/Tech talent: Research Triangle Park is a big tech scene with a lot of legacy businesses. RTP (as it is called) was big in the go-go days of telco pre-tech bubble #1. We did a lot of work there. There is a lot of strong, mature talent in the area but not much of a venture capital or early-stage investment scene. Cisco, IBM, RedHat and NetApp all have big tech centers there.

Reno, NV

Accessibility: Low.
Cost of living: Very low.
Strength of IT/Tech talent: Surprisingly, there are pockets of interesting, mid-level tech people here. For example, MSFT has a good size office in Reno.

San Diego, CA

Accessibility: Medium. Very easy to get in and out of if you are on the west coast (the airport feels like it’s in the middle of the city), but less flights than other hubs.
Cost of living: Low to medium.
Strength of IT/Tech talent: San Diego was a big tech town a decade ago. Due to consolidation in the market, specifically semiconductor and wireless systems, you have some very technical people that are out of work and available for the picking. Also, a heavy government contracting ecosystem with strong yet slightly old-school talent is present.

Seattle, WA

Accessibility: High, particularly on the west coast.
Cost of living: Getting higher by the day. Cost of living was lower 5-10 years ago.
Strength of IT/Tech talent: Strong tech and IT talent but huge competition for that talent. Amazon may try to scare you off, but don’t let it. A lot of great people go into Amazon and spin out. It doesn’t mean they are bad people – Amazon is an amazing company but not a perfect fit for everyone.

Salt Lake City, UT

Accessibility: Medium (but great skiing).
Cost of living: Low. High quality of life.
Strength of IT/Tech talent: Very strong software ecosystem. Great universities and talent pool, and people are very sticky. Also a great place to establish a call center or inside sales organization beyond tech.

And remember, whichever city you choose…

Be nice to your new barista!

Mike Doonan is a Managing Partner at SPMB, the number one executive search firm in California and one of the largest in North America that is focused on technology, data and digital transformation. He builds out the senior management teams for market-leading technology companies such as Google and Amazon, as well as industry leaders seeking to apply technology and innovation to their businesses such as Disney, Comcast, TransUnion, Capital One and many others. Follow him on Medium (@DoonanSearchGuy), LinkedIn (michaeldoonan) or Twitter (@DoonanSearchGuy).

Mike Doonan

mike@spmb.com

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