FINDING THE RIGHT BALANCE
No state in the union has everything going for it.
Even states such as California and Massachusetts that loudly tout the benefits of their thriving, tech-focused economies, frequently have high labor costs, high taxes and potentially business-stifling regulations, the CRN analysis showed. Conversely, many states that brag about their low labor costs, limited taxes and lenient regulations -- Louisiana and Oklahoma are two examples -- don't have much to offer in the way of experienced workers and business opportunities.
The trick for tech entrepreneurs is to find the states like Utah, Virginia and Colorado that strike the right balance.
Some solution providers already have figured that out. Virginia, for example, is home base for 46 companies on the Solution Provider 500. And the fact that 22 Virginia solution providers are on the Fast Growth 100 and 50 Up-And-Comers, 21 are on the Next-Gen 250 and 15 are on the Tech Elite 250 illustrates how many Virginia solution providers are in the industry vanguard.
"A lot of businesses are locating here," said Andrew Lawlor, CEO and chief architect of Aptaria, a McLean, Va.-based solution provider founded in 2003. (Aptaria is a member of the Next-Gen 250.) While the bulk of the company's customers are commercial businesses, Lawlor said nonprofit organizations are a growth area. "This is a target-rich environment in which to operate a consulting business."
The business advantages of Colorado are no secret to Ryan Fowler, president of Covalent IT, a solution provider based in the Denver suburb of Wheat Ridge. "We started at the peak of the recession and dumped a lot of cash into the startup," Fowler said of the four-year-old company.
So far the gamble is paying off. "It's been a great place to start and to thrive. We've been awarded contracts that we've beaten out huge competitors for," Fowler said.
Entrepreneurs seem to get the fact that West Virginia and Hawaii aren't so great for starting and growing a business: There are no solution providers from either state on the Solution Provider 500, nor the Fast Growth 100 and 50 Up-And-Comers, Next-Gen 250 or Tech Elite 250 lists.
Utah, however, seems to be undiscovered country for solution providers. PcCareSupport is the only Utah solution provider on the Next-Gen 250, and there's only one company on the Solution Provider 500 or Tech Elite 250: Valcom Salt Lake City, based in the state's capital city. There are no Utah companies on the Fast Growth 100 and 50 Up-And-Comers.
But the fact that Utah came up as No. 1 doesn't surprise PcCareSupport’s Westwood. "It has very low labor costs, a lot of great talent, and a lot of people who are willing to take risks, a lot of entrepreneurs," he said. "There's a lot of capital coming into the state, too."
Provo, Utah, recently got a major endorsement from Google, which earlier this year chose the city to participate in its Google Fiber fiber-optic network. There's even a move to brand Utah as "The Silicon Slopes" in a nod to the ski areas a short drive away from Salt Lake City.
NEXT: In Search Of Top Talent