Why Small Start-Ups Grow in Clusters

Call it conventional wisdom or what-not. Have you noticed that where a big business root in, a small yet vibrant community of start-ups follows? We saw it happened in Harrison, New York; it’s where PepsiCo and MasterCard set up their shops. A lot of small businesses followed suit after Microsoft had an office in Redmond, Washington. It also happened in Greenville, South Carolina, where BMW’s SUV manufacturing plant was built.

But here’s an unconventional thought. Following big businesses doesn’t have to be a thing for smaller businesses to thrive. According to a recent study, economic growth is not necessarily factored on proximity with bigger businesses.

Rather we look to community engagement as the leading reason why smaller businesses grow. Easy access to resources is also another factor for business growth.

And contrary to public perception, it turns out that small businesses tend to creating their own ecosystem. Call it attracting each other to create their own little community. Take a look at the City of Chicago.

Chicago, Illinois

Ranked number 10 in the 2014 list of the best metro areas to start a business, Chicago had humble industrial beginnings. As a result, it seldom saw commercial endeavors. Yet small business communities began to emerge, and it blossomed. The reason for their thriving success may seem too simple. Start-ups flocked together and supported each other.

One of the local supporters is an online job search and hiring platform, which helped businesses connect with the right manpower. It offers advantages in terms of handling the interview and screening processes, saving these local businesses the time and effort of doing so.

Dallas, Texas

Dallas, Texas, on the other hand is known for its oil refineries and drilling activities. But beyond the back-breaking, hard labor lies giant companies like Oracle and SAP and the throng of tech start-ups that are smaller in scale. How small, you ask? Most of these tech support companies have less than 50 employees on the payroll.

Yet these pint-size tech organizations provide IT support, app development, staffing, and other services, targeting much larger corporations. Thus, with the influx of these smaller start-ups, Dallas became an attractive destination, creating a cluster of small businesses designed to provide support to the existing ones.

San Francisco, California

San Francisco is another attractive draw for people looking to create their own start-ups. Behind the huge shadow cast by IT giants such as Google, Facebook, and Twitter lies a multitude of smaller businesses that provide e-commerce services.

These companies have created e-commerce apps that are location-based, connecting consumers to local craftsmen. It’s like an online market place; a launchpad of some sort that allows businesses to showcase their wares to the public at minimal cost.

With this alternative, entrepreneurs can expand their ideas and their business reach without the need for expensive Web consulting and similar services.

Denver, Colorado

A wave of tech savvy entrepreneurs have found their home in Denver. One of their featured business solutions is location-based ad targeting. The app is designed to tap on the targeted audience, driving actual foot traffic to businesses.

The virtual launchpad features surgically precise solutions with access to real-time results of every ad campaign it supports. Because it’s a cost-effective alternative to traditional ad marketing, local businesses, mostly small start-ups, patronize this option.

As a result, most of Denver’s entrepreneurs embraced this marketing tool, garnering a highly impressive positive reception.

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