Silicon Valley in Ohio: Everything You Need to Know About the Booming Startup Scene in Columbus
The startup scene in Columbus has grown exponentially in recent years.
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Columbus, Ohio is known for being one of the biggest cities in Ohio. It is Ohio’s capital, and also a center for arts and culture in the state. It is home to one of the best zoos in the country, the Ohio History Connection, and the Columbus Museum of Art. Columbus also has the Center for Ohio Science and Industry and the Ohio State Buckeyes. This city has long been known for its contributions to arts, culture, and sports, and for the past few years, this city has also gained recognition for its up and coming start-up scene.
Columbus has become a tech hub in recent years, and is now home to several valuable startup and tech companies. It is now one of the best cities in the U.S. for tech jobs and is projected to only keep growing from here. Businesses are growing, salaries are growing, and more people are moving into the area for opportunities. Ohio’s infrastructure is attracting business founders from Silicon Valley, elsewhere in the country, and all around the world.
There are a few reasons that Columbus’s tech industry has thrived so much in recent years. It involves a combination of factors working in tandem to produce the right kind of environment to support growing businesses. Columbus’s support of entrepreneurship and its proximity to talented students are two of the main ingredients for this growth and prosperity. Columbus is growing more similar to California’s Silicon Valley each year. One day they could become nearly indistinguishable aside from the landscape. We will explain everything that you should know about the booming startup scene in Columbus.
How It Started
The Columbus tech boom didn’t just happen from out of nowhere.
Venture Capitalist Firms
Back in the 80s, Columbus residents started businesses meant to assist people who needed to be connected with the right resources. These businesses are known as Venture Capitalists. One of the first companies of this kind to open in Columbus was Rev1 Ventures, then known as Columbus Tech Council. They are an investor startup studio that helps startups get their businesses off the ground. Over the past few decades, they have helped launch more than 150 startups and invested in more than 300 companies. They built their company with an aim to turn the Midwest into a magnet for high-growth startups and have accomplished just that.
Nearly two decades later, in the early 2000s, businesses just like Rev1 Ventures began to grow in larger numbers. NCT Ventures was founded in 2001 and has spent two decades giving its time and resources to tech related business ventures. The founders of this company also founded the Center for Entrepreneurship at the Ohio State University. This center aims to foster a culture of entrepreneurship among Ohio State University students. Not only does this give many students direction and career plans for the future, it also helps Ohio’s startup community grow even larger.
There are many other investment firms like those two that make Columbus a popular destination for students and tech savvy individuals. Some of those companies include Drive Capital, a company with over a billion dollars worth of acquisitions under their belt, Heartland Ventures, a venture capitalist firm that aims to bridge the gap between groundbreaking technology and corporate innovation, and Loud Capital, a company with a mission to make a difference in the world while being inclusive.
Each of these companies was founded after 2010. There are so many more companies of this kind, anyone looking to start a business in Columbus has many options regarding companies eager to back startup ventures and elevate their communities.
The location of Ohio State University is one big reason for Columbus’s booming startup scene. Columbus has one of the highest numbers of educational institutions in the country. There are 50 colleges and universities that churn out about 20,000 graduates per year. Many Ohio businesses have connections with the local colleges, and Ohio State University is the biggest one.
Many local firms aim to help both college students and startup companies by connecting them with each other. These firms offer programs that find students in relevant fields and pair them with the right companies that fit their skill sets. These firms often find students that are studying subjects like business, engineering, and computer science. They will connect start up companies with whichever types of students they need to grow and prosper.
Businesses and government executives in Columbus have for a while been putting a strong focus on business and education partnerships. The goal is to make Ohio into the top place to be for anyone who wants to find work in the Midwest. The idea is to have an edge over other places for acquiring workforce talent. That is something that will overall improve Columbus and Ohio as a whole. These businesses keep from losing the best and brightest minds of Midwestern colleges by providing them with amazing job opportunities they could not find as easily elsewhere.
Columbus business leaders and officials have even established ways to train people to do jobs they didn’t previously have the skills for. They are recruiting skilled workers and also creating them. The Office of Talent Strategy is a partnership between a few high level companies and Ohio State University. It is a continuation of another similar program called the Workforce Partnership Initiative. It is backed by companies like JP Morgan Chase and American Electric Power Company Inc. These programs are leading people into internships and careers they wouldn’t have had access to before.
First Successful Startups Lead to Progress
Some of the first successful startup tech companies in Columbus kickstarted the startup boom. The first successful startup company in Columbus is called CoverMyMeds. It is a company that makes software that streamlines the authorization process used by several insurance companies. The company was started back in 2008 with a $250,000 investment from venture capitalists. It continues to raise money to reach its goals.
Olive is a healthcare Al startup that announced two years ago that they received $225.5 million in financing. This financing was received from several venture capitalist firms including, General Catalyst, Drive Capital, and Silicon Valley Bank. Some of these venture capitalists made their way from Silicon Valley to Ohio because they saw the potential in the city’s startup businesses. They knew they could stand to gain a lot by investing in a growing business community.
Finite State is a cybersecurity startup that has raised over $30 million. While originally based in Columbus, this company now operates remotely and hires people from all over the country. T-CETRA is a financial tech company that turns cash payments into secure digital transactions. Battleface Inc. is a global travel insurance company, Physna is a learning technology that has recently raised $56 million, and UnifiHealth, a company that makes health coverage for small business owners more affordable, has raised $5.4 million. The list of companies in Columbus goes on, and there is no shortage of investors for them.
How Columbus and Silicon Valley Compare
These places are vastly different but share some important similarities in the tech world.
Columbus is currently being dubbed the ‘Silicon Valley’ of the Midwest. It is easy to see why that is given the astronomical growth of their startup scene. Venture Capitalists are pouring resources into promising businesses, new startups are thriving all the time, and salaries are going up. Some of the biggest differences between Columbus and Silicon Valley right now is the novelty of these businesses in the Columbus area and the cost of living.
The cost of living is significantly lower in Columbus than it is in Silicon Valley, and that is one reason so many new business owners are able to grow their companies so quickly in Columbus.
Tech companies in Columbus have grown in terms of the salaries they offer. In fact, the salaries of Columbus tech companies have been growing faster than the rate of salaries in California’s Silicon Valley. The salary growth in Columbus is around 14.2%. In contrast, the growth of Silicon Valley companies has stayed at around 4% or 5%. When working at a tech company in Columbus, a person can earn over $90,000. That is the average salary for Ohio tech employees. Because of Ohio salaries growing so quickly, they are on track to reach the salaries in Silicon Valley in only a few years.
Ohio has a 53% growth rate when it comes to hiring for tech jobs. Columbus made the top ten in a national list of cities with the best job prospects in 2020. It earned the number two spot on the list. People who work in tech are not likely to remain unemployed in Columbus given all the programs they have in place to support and connect workers and businesses alike. It was also once designated the best city for tech workers.
There are over 430 jobs posted for computer and Information Systems Managers per month, 460 jobs posted for Information Security Analysts, 120 jobs posted for Operation Research Analysts, and 2,800 jobs posted for Software Developers. There are several other highly in-demand tech jobs in Columbus that are posting requests for workers each month. All these jobs are drawing talented applicants to the area which will end up leading to more growth in the future.
Cost of Living
The low cost of living in Ohio is something that contributes to the appeal of its ‘Silicon Valley.’ While Silicon Valley is extremely expensive, Columbus is the opposite. There are people and companies that have moved out of Silicon Valley in recent years because of the high prices. Silicon Valley is the most expensive place to live in the U.S. The homes sell for over a million dollars on average, and even the products sold in stores are 27% higher than the national average.
Columbus’s cost of living is 10% lower than the national average. The median price for a home in Columbus is $269,000. It has climbed a bit from what it used to be since the price of homes often goes up when an area is in demand, but the prices are extremely unlikely to ever reach Silicon Valley’s. Large businesses are moving their headquarters or simply adding home bases in Columbus all the time. The low rate to start a business there makes this city very profitable for business owners.
The Future of Ohio’s Silicon Valley
Based on Ohio’s present, the future is looking very bright.
Ohio’s Silicon Valley has all the elements needed to grow into a valuable tech hub. And while it has some similarities to California’s Silicon Valley, Ohio’s version has many unique characteristics that make it different. The community, prices, and commute in Columbus are different in a way that brings a lot of positives to tech start up companies and their workers. Columbus is growing into its own center of progress and tech innovation. It likely won’t look just like Silicon Valley years from now, but will be its own beacon of growth within the Midwest.
Columbus’s startup scene has earned itself a strong comparison to Silicon Valley. That comparison is made for good reason, and one day when the scene has grown even bigger and stronger, the comparison will be even more apt. Columbus brings you many benefits that come with living in a profitable tech driven city, while still offering the perks of a slow-paced Midwestern one.
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