20 Best Cities to Bootstrap an Online Business

by HSI Staff

Trying to get your start-up to stay afloat in an online sea of competition? Many bootstrapped startups make the mistake of launching locally without considering whether their city has the resources and the support to ensure success. Others jump into the seemingly obvious – and prohibitively expensive – choice for an online-centered tech company: The San Francisco Bay area. We’ve taken a hard look at cities around the country to determine the optimal location for your online business, where you can have the best of both worlds.

Startups are often strapped for cash, so we’ve focused our selection criteria on affordability and a lower cost of living, as well as access to a highly educated workforce. You’ll notice that many of the cities that made our list are located in the suburbs of a major metro area, where an online business can still get speedy internet without paying big city rents. Watch out, Palo Alto. Your tech talent might get tired of the traffic and move to Des Moines.

While some of the data we utilized is detailed below, please note that we also considered factors such as clean air, walkability, politics, and much more. So start packing boxes and take your business to one of the following cities, where you’ll have a better chance of making a start-up successful.

“Low cost, high quality of living. There are plenty of places that are cheap, but don’t have many resources available, and there are plenty of places that have high quality of living, but are too expensive. Finding the right tradeoff of the two, having high quality of living yet low cost, is a very attractive mix, as it often attracts high quality workers to the area who won’t make the same demands as those in more expensive locations.” John Turner, CEO/Founder of UsersThink







Population: 236,441 Concentration of Developers: High

Average Internet Speed: 38 Mbps Cost of Living Index: Medium

Crime Rate: Medium % of College Degrees: 33.7%

This “city of the arts,” once the home of big tobacco, has undergone a renaissance of sorts. The twin neighborhoods of Winston Salem have the highest average growth for small businesses in the nation. It’s an affordable location that makes WalletHub’s 2016 list of best places to start a small business because of a booming tech industry. Winston-Salem is also the home of Krispy Kreme. Come to launch a start-up, stay for the donuts.

Drawback: While still relatively safe, Winston Salem has the highest rate of crime on our list of cities.

Population: 442,056 Concentration of Developers: Low

Average Internet Speed: 39 Mbps Cost of Living Index: Medium

Crime Rate: Low % College Degrees: 35.7%

There’s a reason US News selected Colorado Springs as a Best Place to Live in 2016. At 6,000 feet, it’s one of the highest cities to make our list, although it’s dwarfed by nearby Pikes Peak. The Rocky Mountains provide a backdrop for the home of the Olympic Training Center and a bustling tech industry supported largely by the Department of Defense. Colorado Springs enjoys over 9,000 acres of parks and recreational space, including the “Garden of the Gods,” considered one of the most beautiful public parks in the world. It’s an affordable, active city that offers plenty of opportunities for those looking to break into the biz.

Drawbacks: Colorado Springs does see moderate snowfall in the winter and is considered an alpine desert climate.

Population: 792,862 Concentration of Developers: High

Average Internet Speed: 29 Mbps Cost of Living Index: Medium

Crime Rate: Low % College Degrees: 40.3%%

The second city to make our list from North Carolina, Charlotte enjoys not just the humid breezes from the Gulf of Mexico, but also one of the highest average rates of growth for small businesses in the nation. The city is part of the Research Park Triangle, a cluster of bio tech companies and other corporations that are pumping millions into the state’s economy and is home to corporations like Bank of America, Wells Fargo, Walmart, and Lowes. Charlotte has the largest man-made lake in the state, Lake Norman, and as the city grows, it remains to be seen if there are any roadblocks Charlotte can’t simply engineer its way around.

Drawback: Low internet speeds and higher than average crime rates might give a small business something to consider before relocating to Charlotte.

Population: 144,864 Concentration of Developers: High

Average Internet Speed: 32 Mbps Cost of Living Index: Low

Crime Rate: Very Low % College Degrees: 65.3%

Live the small town life in Naperville, one of the safest cities on our list. It’s a sleepy suburb of Chicago, where covered bridges and quiet parks make up the neighborhoods packed with married, highly educated professionals. Naperville is known for dedicating their resources to helping startups and for their vocal and involved volunteer community. Start-ups like Greygoo agree, Naperville may be small, but they’re making a big difference in the small business community.

Drawback: Because Naperville is a bit more rural, it has the longest commute time of any of the cities on our list.

Population: 236,716 Concentration of Developers: High

Average Internet Speed: 43 Mbps Cost of Living Index: High

Crime Rate: Very Low % College Degrees: 33.9%

California can be a tough state for small businesses to make it big because of an unfriendly tax structure and expensive rents. Orange County’s Small Business Development Center, however, goes out of its way to make start-ups feel welcome. It’s a college town that enjoys a talented workforce, courtesy of nearby Pepperdine and a plethora of other institutions. Irvine is a planned city, so the neighborhoods are organized as villages, each with their own pool, tennis court, and park. The city is on the outskirts of Orange County, so Irvine gets to enjoy the California sunshine along with a fairly low rate of crime.

Drawback: Irvine tops out at one of the highest costs of living on our list.

Population: 363,097 Concentration of Developers: Medium

Average Internet Speed: 36 Mbps Cost of Living Index: Low

Crime Rate: Low % College Degrees: 33.9%

Tampa is a tropical powerhouse, where startups dance to success under the swaying palm trees. Situated on the Gulf of Mexico, the city enjoys a warm, humid climate. While the internet might be a bit slow, the tourism isn’t. Tampa thrives as a busy, modern metro with a diverse population that enjoys sports and all things foodie. Despite a bustling nightlife, the city earns high marks for safety and is the corporate headquarters for several healthcare companies. Running a business from the beach doesn’t sound like a bad gig, right?

Drawback: Tampa’s lack of mass transit earns it poor marks for walkability.

Population: 176,588 Concentration of Developers: Low

Average Internet Speed: 120 Mbps Cost of Living Index: Low

Crime Rate: Medium % College Degrees: 26%

Chattanooga, nicknamed “Gig City,” was the first city in the nation to have fiber steam through in 2010, courtesy of public utility EPB. Since then, start-ups and other small businesses have been lured to this humble former railroad hub for affordability, lower rents, and plenty of internet speed. Chattanooga is situated in an area called the Cumberland Plateau, where a gap in the Appalachian Mountains and the Tennessee River meet, providing residents with ample opportunity to explore the great outdoors. The city, once troubled by air pollution, high unemployment, and a rundown waterfront, has really cleaned up its act in the last two decades and now has a thriving banking and tech industry. No matter your business goals, Chattanooga promises to be a good investment

Drawback: Chattanooga does top our list for most crime, and then brings up the rear with the lowest rate of developers.

Population: 357,293 Concentration of Developers: Medium

Average Internet Speed: 36 Mbps Cost of Living Index: Low

Crime Rate: Medium % College Degrees: 51.9%

Situated in the suburbs of Dallas, Plano is poised to become the next Palo Alto. It’s an award winning city with one of the most educated workforces on our list. Plano’s planned neighborhoods are clean and safe, dotted with large trees and plenty of parks, and a downtown that blends modern and historic seamlessly. Friendly tax laws have already drawn several companies to base their corporate headquarters in Plano, including Cinemark and JC Penney. Plano also wins most productive city on our list, with one of the longest average work weeks in the nation.

Drawback: Internet speeds are still pretty slow in Plano, despite all that posturing and planning.

“For new entrepreneurs looking to start an online business in a physical location, it’s my experience that having a good talent pool living nearby is a top priority.” Vadim Vladimirsky, CEO of Nerdio

Population: 609,456 Concentration of Developers: Low

Average Internet Speed: 35 Mbps Cost of Living Index: High

Crime Rate: Medium % College Degrees: 44.6%

This “City of Roses” is in full bloom when it comes to best places to start an online business. Portland has a lower cost of living than nearby tech hotspots like San Francisco which has attracted a cluster of innovative companies. This eco-conscious city has a culture dedicated to the small, local, and independent and has the second highest revenue in the nation from business ventures that employ less than 250 people. Sitting in the shadow of Mt. St. Helens and Mt. Rainier, Portland “keeps it weird” with one of the best food truck scenes in America, streets dedicated to bicyclists and public transport, and over 10,000 acres of public parks. Portland may be the largest city in Oregon, but their focus on sustainable and small means you’ll reap the benefits for your online business.

Drawback: Portland does have a slower internet speed and one of the higher crime rates on our list of best cities.

Population: 151,088 Concentration of Developers: Medium

Average Internet Speed: 37 Mbps Cost of Living Index: Medium

Crime Rate: Very Low % College Degrees: 61.9%

Cary is our third city to hail from North Carolina, and it earns every bit of its buzz about being great for business. Snuggled close to Raleigh and part of the Research Park Triangle, the city is still rural with dense woods and a mild climate. Cary is a wholesome place with highly educated, married residents that hail from the 170 tech companies that call the Research Park area home. The largest employers in the greater Raleigh area include Fidelity, American Airlines, Cisco, and IBM. Not a bad roster for a city that was once considered the backwoods of Appalachia.

Drawbacks: As a more rural community, Cary isn’t considered very walkable and doesn’t have mass transit.

Population: 113,884 Concentration of Developers: High

Average Internet Speed: 43 Mbps Cost of Living Index: High

Crime Rate: Very Low % College Degrees: 23.3%

Elgin is one of the smaller cities to make our list, but what it lacks in size, it certainly makes up for in charm. Considered part of suburban Chicago, this city has a chamber of commerce that makes it their business to see start-ups succeed. The downtown area has many of the original buildings with the older, brick facades that give the city a quaint, historic feel. In addition to having one of the most famous orchestras in the Midwest, Elgin is also home to many parks and a nature preserve. This safe and affordable city has a booming housing market, so you better act fast and secure a spot for your business before Elgin grows beyond your price range.

Drawback: Lower levels of education mean less tech talent available for your business.

Population: 116,768 Concentration of Developers: High

Average Internet Speed: 39 Mbps Cost of Living Index: High

Crime Rate: Medium % College Degrees: 69.9%

Berkeley is a compact city clustered on the edge of San Francisco, where the University of California campus heavily influences the community. As the oldest campus in the California system, Berkeley is renowned as a start-up incubator and has one of the best business programs in the nation. It’s highly educated residents lean towards alternative lifestyles and aggressively embrace sustainable practices. Combine that with the beautiful California weather and a small town that specializes in walkability and you’ll find Berkeley is the perfect place to take your online business to the next level.

Drawbacks: Berkeley suffers from the common Californian complaint of higher tax rates and a higher cost of living.

Population: 101,862 Concentration of Developers: Medium

Average Internet Speed: 51 Mbps Cost of Living Index: High

Crime Rate: Low % College Degrees: 39.5%

Just because you’re a small town doesn’t mean you can’t make it happen for start-ups. Sandy, an affluent suburb of Salt Lake City, is proving that. Home to soccer’s REAL Salt Lake, the city sports a healthy, active lifestyle that takes full advantage of “the greatest snow on earth”. While Sandy is staunchly conservative with an abnormally large population of married couples, you’ll find few places as affordable or safe to raise a family. So bring your laptop, your skis, and your little people. With some of the largest homes in the state, Sandy’s got room.

Drawback: Most of the Salt Lake Valley suffers from poor winter air quality due to a condition called inversion.

Population: 265,452 Concentration of Developers: Medium

Average Internet Speed: 60 Mbps Cost of Living Index: Low

Crime Rate: Low % College Degrees: 54.5%

Looking for a hotbed of innovation? Scottsdale has you covered on both fronts. This is a true Western town, filled with cowboys and cacti, and more recently, home to spring training for several major sports teams. Scottsdale enjoys an influx of talent from nearby Tempe’s Arizona State University, named one of the most innovative schools in the nation. The city’s arts festival is widely considered to be one of the best in the state and there is a vibrant nightlife and bustling hotel and hospitality industry. Sprinkle in a little gaming and plenty of golf courses, and Scottsdale becomes a great place to get your start-up on.

Drawback: This is an incredibly arid climate with VERY hot temperatures in the summer. If triple digits on the thermometer aren’t your thing, steer clear.

Population: 122,735 Concentration of Developers: Medium

Average Internet Speed: 35 Mbps Cost of Living Index: Low

Crime Rate: Very Low % College Degrees: 67.6%

Ann Arbor began as an old-fashioned, farming community located on the Heron River. My, how times have changed. Today, Ann Arbor is home to the University of Michigan and defined as a “college town,” booming with single, young professionals. The community thrives on a bustling theater and dance scene, and has an obsession with college sports. While the rest of Michigan might refer to Ann Arbor residents as “townies,” the small business scene is quickly morphing the city into a metropolis.

Drawback: It’s a bit far to the nearest big city, Detroit, so Ann Arbor suffers from some slower internet speeds as a result.

Population: 133,992 Concentration of Developers: High

Average Internet Speed: 52 Mbps Cost of Living Index: High

Crime Rate: Low % College Degrees: 69.3%

Just around the bend from Seattle, Bellevue offers beautiful scenery and a business friendly environment. It’s a small, quiet suburb with a highly skilled and incredibly diverse workforce that takes sailboats out on the weekend. Bellevue has the highest rate of patents per capita in the nation and is next door to some very impressive tech giants including Microsoft, T-Mobile, Amazon and more. While the cost of living is a bit higher, you’ll reap the benefits of a large pool of talent in Bellevue.

Drawbacks: Bellevue is a Seattle suburb so it rains. Often.

Population: 155,610 Concentration of Developers: Low

Average Internet Speed: 140 Mbps Cost of Living Index: Low

Crime Rate: Very Low % College Degrees: 36.7%

It’s hard to deny that Provo is a pretty package, and that’s probably why Google chose it as their second fiber city. It has the lowest cost of living, a low crime rate, and some of the highest internet speeds on our list. Just south of Salt Lake, Provo enjoys nearby mountains perfect for outdoor enthusiasts and the world famous Sundance resort. In recent years, the city has watched lots of business create a big boom in the area, including corporations like Novell, Vivint, and Adobe. Provo is labeled as the “most conservative city in the US,” so its high rates of marriage and religions make it a family-friendly environment for entrepreneurs.

Drawback: Utah can be prone to some extreme weather, with high temps in the summer and deep snowfalls in the winter.

Population: 224,906 Concentration of Developers: High

Average Internet Speed: 41 Mbps Cost of Living Index: Medium

Crime Rate: Low % College Degrees: 72.2%

Arlington encompasses a wide regional area on the outskirts of DC with the highest median income in the United States. Parks on the banks of the Potomac are heavy with cherry blossoms in the spring, and the surrounding neighborhoods of the city earned the EPA’s smart growth award in 2000 for sustainable city planning and clean air. Connected to DC by reliable mass transit, Arlington boasts some of the best public schools in the state along with a healthy population and a vibrant nightlife. Coupled with the highest rate per capita of software developers on our list and you’ll find this DC suburb meets all your online business needs.

Drawbacks: This area’s economy is heavily based on government business, so if the Department of Defense isn’t your idea of an ethical employer, you might want to reconsider.

Population: 885,400 Concentration of Developers: Low

Average Internet Speed: 83 Mbps Cost of Living Index: Medium

Crime Rate: Medium % College Degrees: 45.4%

Texas is known as a friendly place and Austin is no exception when it comes to start-ups. Over $362 million dollars in venture capital was spent on Austin businesses in 2014 and it’s been named one of the fastest-growing cities in the world. Austin won back-to-back awards in 2010, 2011, and 2012 for having the “healthiest small business climate,” and is home to the start-up incubator, Capital Factory. Despite Austin’s notoriously world-class foodie and music scene, it’s still relatively affordable to become an Austinite. It’s why the likes of Oracle, Google, Facebook, 3M, Apple, Cisco, and Intel do major recruiting in this “clean air city.” Austin is making the rest of the nation sit up and take notice that “keeping it weird” means a whole lot of wonderful for the economy.

Drawbacks: This is the largest city on our list by far, so if big city life isn’t your cup of tea, you’ll want to explore elsewhere.

Population: 467,007 Concentration of Developers: Medium

Average Internet Speed: 159 Mbps Cost of Living Index: Low

Crime Rate: Medium % College Degrees: 15.3%

As the first Google Fiber city, Kansas City has reaped the benefits of what blisteringly fast internet speeds can bring. This city sprawls across two states with plenty of space to offer at affordable rents. A stately downtown is rich with museums, art, and a cultural scene surprisingly cosmopolitan for Kansas. Kansas City is also home to the Kauffman Foundation, the nation’s leading organization and resource center for entrepreneurs and an entire area of the city has become known as “start-up village”. While it does struggle with a reputation as the decidedly blue-collar home of General Motors, Kansas City has evolved into an entrepreneurial hub that is showing the world exactly what access to internet can do for innovation.

Drawbacks: Kansas City does sit on the edge of tornado valley, so carefully consider how you feel about small, enclosed storm shelters before moving your small business.

“As a venture backed online startup, we look for a location where it’s central to many things including a safe neighborhood where employees can feel safe to walk to their cars at night.” Tae Lee, Founder of Travo