Why Seattle is a Smart Hub for Tech Entrepreneurs

There are various startup ecosystems growing across the U.S. From Indianapolis to New York and Utah to San Francisco, each ecosystem has its own set of strengths and individual flavor. Startup ecosystems across cities such as Detroit, Kansas City, Chicago and many others are building tech startups focused on solving local problems and disrupting traditional industries alike—and they continue to bud across the nation. Supporting infrastructure such as co-working spaces, accelerators and incubators, along with local angel groups and venture capital firms, are fueling these startups.

The 1776 Startup Federation is a testament to the number and reach of organizations supporting various cities across the U.S. Leading startup accelerator, TechStars, has a broad focus across a number of major U.S. cities. Venture capital firms are increasingly looking outside their immediate locations to find deals with better valuations. While there’s a sense of pride and autonomy in each city, it’s no secret that ultimately the jobs created by entrepreneurs and the uplift to the economy have been incredible over the past few years.

This world of digital work and life, it doesn’t matter which city you chose as an entrepreneur. At Microsoft Ventures, we run our U.S. accelerator in Seattle for a variety of reasons. Not only is it close to our global headquarters at Microsoft, but it is also a vibrant city with many great attributes, from tech talent and a strong research community to a desirable city to call home. For startups across the country and around the world looking to apply for our next cohort, Seattle provides a unique backdrop to build a company.

Whether you are looking to move your business to the Emerald City or immerse yourself in our tech culture in order to bring your insights and learnings back to your local entrepreneurial ecosystem, we would love to hear from you.

Seattle has a sense of balance, growth and diversity, complete with an educated population that has a strong foothold in creating innovative technology. It is a city poised for innovative startups and is rapidly growing. Here’s what makes Seattle a smart hub for tech entrepreneurs:

1. Seattle is a livable city.

Seattle doesn’t have nearly as much startup density as Silicon Valley. However, it does have the ingredients to support the growth of a startup. The lower cost of top talent and high employee loyalty due to less competition are added bonuses. The cost of living in Seattle is 17% cheaper than Silicon Valley and makes for great quality of life at a relatively low-cost. With a more affordable housing market, the combination of industries creates a healthy environment for employees to live and grow their families and businesses. Silicon Valley might have the sun, but Seattle is also a beautiful and inspiring place to live with many attributes from the Puget Sound and the Cascades to the varied neighborhoods across the city.

2. In the shadow of tech giants.

Microsoft, Boeing, and Amazon are just a handful of technology giants native to the Northwest. Spurred by the access to talent, Google, Apple, eBay, Facebook, Twitter, Salesforce and Splunk have set up operations in Seattle. Additionally, ZillowTableauINRIX, PicMonkey, Spoon.net and Moz are a handful of rising stars seeing rapid growth. The access to a rich talent pool of engineering, creativity, and business across established and growing businesses helps an early stage startup build a strong, experienced team.

3. Strong technical and research community.

The University of Washington (UW) Computer Science and Engineering program is a top 10 program in the U.S. UW continues its leadership in the field of “big data” and machine learning. As such, the professors at the university have created an entrepreneurial environment, churning out tech startups from the computer science department. UW has innovative programs to help nurture entrepreneurs, including W Fund and New Ventures Facility.

4. Infrastructure for entrepreneurial support.

Organizations such as Microsoft Ventures, UP Global, Startup Weekend, TechStars, StartupSeattle, 9Mile Labs and now WeWork have created an ambience of startup activity with the active angels and venture capitalists fueling startup growth and rallying to make sure startups get their needs met locally. And if you’re looking to casually connect with others in the community or share your ware, look no further than GeekWire with their oft-quoted coverage and events. SeattleStartup and New Tech Seattle host great platforms to get educated and connected as well.

5. Hub for Cloud and Digital Work.

For a great valuation at low costs, Seattle has a lot to offer a consumer focused startup in this space. The great talent from Microsoft, Starbucks, Costco, Nordstrom and Amazon make Seattle a rich breeding ground for top technology talent in these upcoming markets. This has led to creations of companies like Expedia, Blue Nile, Zulily and many other consumer startups. With several of the biggest data centers in the world based in Washington, powered by the Columbia River, and connections with Microsoft and Amazon, cloud startups are also on the rise in Seattle. Microsoft, with its focus on Digital Work, is also building a massive platform that contains data across email, calendar, photos etc. to power personal productivity across devices transitioning between work and life.

6. Growing investor scene.

The Pacific Northwest is a clear winner with the largest valuation of exits, with Tableau now valued at $5.6 billion and Zulily valued at $4.6 billion. It’s clear that the Pacific Northwest is creating valuable companies. Geographically tucked in a corner, the area itself feels isolated and isn’t the center of marketing, awareness and media like NYC or Boston or LA. This makes it a great place to think differently, experiment and test startup ideas in a safe, educated, consumer focused environment.

7. Increasing diversity in technology industry.

Seattle ranked as the third best city for female entrepreneurs in a 2014 study conducted by Nerd Wallet, preceded by Washington D.C. and San Francisco. The city boasts of districts often noted as some of the most diverse neighborhoods in the country.

The numbers are encouraging enough to consider setting up your business here. In the last five years, $4.1B has been invested across 1,642 deals. In that same time period, total funding in the Pacific Northwest doubled, seed funding grew, and top tech acquirers have been actively buying in the region: Madrona Venture Group leads in early-stage activity in the Pacific Northwest since the start of 2009, followed closely by Founders Co-op with 26 deals, and Alliance of Angels was the top angel group with over 70 deals since 2009.

For the early stage startups, Seattle might be considered a smart choice given the low cost of living, talent pool and exhaustive set of resources. Combined with a strong music and arts scene, the enthusiasm of Seahawks, Mariners and Sounders fans, easy access to the great outdoors, and the home of aerospace and some of the best coffee in the world, there are a lot of reasons why this vibrant and growing startup ecosystem could be a great home for your startup.

Is your startup building the next gen enterprise solution? Batch #2 for the Seattle program will be focused on “Digital Productivity.” Applications are open until Jan 30th. Want to learn more? See if we’ll be swinging through your city on our info tour.