Startup culture is taking the United States by storm. There are thousands of startups in the country, and they all have their own unique business models. With the help of AngelList, we discovered who these startups are, where they’re located, and pretty much everything else you’d want to know about them.
American Startups in 2015
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The Most Popular Places: Silicon Valley and New York City
Silicon Valley and New York City have an insane amount of startups in their territory. There are a couple reasons behind this:
- They’re some of the most populated and affluent areas of the country.
- They’re surrounded by some of the best universities in the country.
- The states intentionally cultivate new business.
These three ideas all have an impact on Silicon Valley and New York City. And without one of them, startups in those areas wouldn’t be as successful as they are. So how many startups are in Silicon Valley?
At the time of publication, about 16,006. And how many startups are in New York City? About 10,316, also at the time of publication. Let’s take a closer look at the reasons behind their popularity.
1. Popularity, population, and affluence
Silicon Valley and New York City have a lot of people (which is an understatement). And their population isn’t necessarily restricted to the people who live within their borders — there are also people who commute into both locations for work each day, not to mention the constant influx of tourists. So it’s no wonder that with so many people, both of these areas also happen to be some of the wealthiest in the country.
In Silicon Valley, we have San Jose, Sunnyvale, Santa Clara, San Francisco, and a couple other towns that all have a bunch of households in the top 5% of America’s income. In fact, all of those cities are among the top 10 in the country in terms of wealthy households. New York City is also quite wealthy, not to mention the surrounding areas like Trenton, Stamford, Norwalk, Long Island, and other high-income towns that are around an hour’s drive from the Big Apple.
Basically, this means that both areas have a lot of people with a lot of disposable income — and they’re always looking to make more money. And judging by our numbers, many of them choose to use that income to invest in startups. It’s a smart move, and it’s almost definitely played a part in the sheer quantity of ultra-wealthy people in both California and New York.
2. The best universities
Along with wealthy investors, these areas also have some of the sharpest, youngest minds in the country. Silicon Valley has an impressive amount of higher education options. The most well-known of the bunch is Stanford University, but there’s also San Jose University, Santa Clara University, Northwestern Polytechnic University, and a couple law schools to go along with them.
The result is a lot of intelligent, driven, and educated people all in one place. Switch to New York City, and you have New York University, Columbia, Julliard, and Pratt, among others. While these aren’t all business schools, you don’t have to be a business major to run a successful startup.
Clearly, as shown by our data, all you need is a good idea and some cash.
3. The stats cultivate new business
Regionally, Silicon Valley is most affected by California’s business incentives — which are pretty impressive. But individually, the 32 municipalities that make up the Valley also have their own city or town ordinances that can help cultivate business as well. On the East Coast, New York (the state) actually has a whole government division to help startups grow.
Independently, New York City has organizations like Small Business Services, among others, that’re designed to work hand-in-hand with entrepreneurs. They’ll even help startups find good hires. With that kind support from state and local governments, it’s no wonder 13.1% of all startups are in NYC.
Looking at startup industries
With so many startups all growing at the same time, there are going to be some industries that are growing more quickly than others. And most startups are concentrated in the exact industries you’d expect — mobile, ecommerce, and social media.
Starting a mobile-oriented company makes a lot of sense for a couple reasons. First, the startup costs are pretty low, and you don’t need a thorough business plan — just look at Yo. Next, the potential value of your company can skyrocket from investors alone, and before your company even turns a profit, you can sell it, pocket the income, and move onto something else.
It’s the dream path for a serial entrepreneur. Plus, mobile startups don’t have the same location considerations as traditional brick-and-mortar businesses. They basically need to find the most investor-friendly area to set up shop, and their product can sell exclusively over Internet-ready mobile devices.
There are no production costs, import taxes, or retail considerations — so many of the typical burdens on new businesses simply don’t apply. And when you don’t have to worry about those extra nuisances, you’re free to focus on your company, your investors, and your product. Out of the 9,541 mobile startups, 1,085 of them are game developers.
This makes a lot of sense given the success of independent games like Angry Birds, Flappy Bird, and other avian-friendly properties. The mobile game marketplace is huge, and all it takes is one chance to go viral to make millions.
Ecommerce startups are pretty similar to mobile startups. They have the same reduced overhead and the same outstanding opportunity for growth — especially if you only operate as a middleman. That’s the beauty of ecommerce companies.
You can run one smoothly and efficiently from your garage with no inventory and no storage space — you don’t even need other employees, if you don’t want to expand. All you need is a niche and a contract with the right brands, and you can rake in a generally passive income. You basically just become an ordering service for manufacturers.
But that’s the minimalist, get-rich-quick approach, and there’s no guarantee it’ll work. Still, it’s likely that the huge number of ecommerce brands popping up throughout the country are a result of people creating and coding their own websites. It’s almost too easy.
You don’t even have to work out your own pay portals — you can just outsource to PayPal. In short, there are so many ecommerce companies because it’s never been easier to run an ecommerce site. With enough time, you could probably make one for yourself on the weekend while you keep your full-time job.
Social media is a similar setup to ecommerce and mobile, but it requires a more creative edge since social media companies need to offer something new to the digital landscape. With the dominance of Facebook and Twitter, it’s kind of amazing that so many people want to start their own social media company. But considering Zuckerberg’s insane success, there are bound to be at least a few other 20-somethings who want to be billionaires before they’re 30. One of the most interesting parts of these social media startups is the number of dating sites. There have been 445 new online dating startups so far in 2015, and they’re geared toward practically any orientation or identification that you could imagine. It’s a whole range of apps that represent a rich spectrum of people, each with their own niche (or even micro-niche) that can fully support a new company.
It would be crazy to talk about new startup industries and not mention an industry that, up until recently, hasn’t been seen in America in — well — ever. The legal marijuana movement has grown (pun intended) in key states like California, Vermont, Colorado, and Oregon, so much so that 265 of the new startups on AngelList deal with weed (pun also intended). Whether or not you agree with the logistics of how cannabis is now a legitimate business model, it’s important to realize that pot is a brand-new industry for the United States.
With the war on drugs, DARE, and other anti-drug statutes in the US, it’s simply fascinating that marijuana is a legal, regulated money-maker now.
Today, practically every word and acronym you can imagine is a valid top-level domain. But, not surprisingly, .com is still the TLD to beat.
.com and other TLDs
The reason is that .com is still the most recognized TLD in the world. Of course it’s still popular — it dominated the Internet for decades, and it’ll take a couple years for other TLDs to catch on. Still, there are less popular TLDs that are gaining some steam on the all-powerful .com.
The next runner up is .co with a cool 3.49% of the TLD market share for startups. This is purely conjecture, but it’s most likely because the TLDs look similar to .com, but .co costs a lot less. .org and .net are two classics that’ll probably stick around for a while — like .com — but they won’t be around forever.
Fun extensions are constantly gaining in popularity, like .io, .me, and .ly. And then there are others that happen to have a cool abbreviation, like .tv (thank you, tiny island country of Tuvalu). Believe it or not, a lot of these TLDs didn’t actually come with the recent explosion of TLD names.
They’ve been around for a few years, typically as country extensions. .it was for Italy, .me was for Montenegro, .io was for British Indian Ocean Territories, and .ly was Libya. At one point, you needed to have a business in these countries or territories in order to get access to the domain name, and that’s still a rule for some.
But with all the buying and selling over the past few decades, these TLDs are mostly up for grabs. And, as a result, they’re all cost-effective alternatives to .com.
If you want to start a new business, it needs to be secure. Right? Apparently, not all the time — or just not through traditional means.
A measly 4.17% of all the startups we evaluated had HTTPS security, which is mindblowing if you consider HTTPS to be the end-all-be-all of online safety. Naturally, it isn’t — but it’s still pretty significant. If nothing else, the HTTPS marker is a sign to users that they’re using a safe website.
Even if every website can be hacked (and probably has, according to Cisco), consumer confidence still counts for something. The fact that so few startups have HTTPS either means it’s not as important as it once was or that it takes a long while to get that kind of security set up. Either way, the results are clear — very few startups use HTTPS.
Considering most of the startups on this list have to do with the tech industry somehow, it’s not surprising that they all have short, easy-to-remember domain names. The average startup domain name is eight characters long, which makes sense since the company founders probably considered their domain name as they chose a company name. As a result, we have a huge range of companies that adhered to a similar list of rules when naming their companies.
In the future, that means remembering a lot of short, quick names to get tasks done. It might get confusing if all of these startups keep going the way they are — but that’s a small price to pay to get some high-quality, cutting-edge companies out of the startup culture.
Popular words in company names
Regardless of a startup’s industry, they all like to use similar words. “Com” is the most popular, probably because so many companies decide to make their domain name their actual name. With so many companies dedicated to mobile, ecommerce, and social media applications, it’s no wonder that 1350 of them kept “com” in their official name for clarity, if nothing else.
And while it might just be a direct way of telling people that a business is online-only, it’s much more specific than using some of the other popular words. For the most part, “group,” “technologies,” “media,” and the rest don’t say much about what a company does. But they sound professional, and they’re the perfect catch-alls for companies that want to give themselves a lot of opportunities to grow.
What about your startup?
Does your startup fit into any of these categories? Are you based in any of these popular startup cities?
Let me know in the comments!