Opinions expressed by Entrepreneur contributors are their own.
Key Takeaways
- Mid-sized markets give founders advantages that don’t exist in big cities. They match the largest metros in talent, entrepreneurship and economic resilience at a fraction of the cost.
- In mid-sized markets, failure is survivable. When a failed idea costs you a few months instead of everything, you can afford to try, miss and try again.
- It’s also easier to make a name for yourself, form lasting business relationships and hold on to top talent.
- While there are many advantages to building in a mid-sized market, it’s not all easy. However, the limits of a mid-sized market sharpen you as an operator.
If you tell someone you’re an entrepreneur, they’ll assume you’re from one of the anointed cities: New York, Silicon Valley, maybe Austin or Miami. Start a company outside of these major metros, and the general read is that you’re a farm league founder.
I know otherwise. I’ve built seven companies, all in my hometown of Lexington, Kentucky. I travel regularly, and when I tell people I’m from Kentucky, they often look surprised and say, “What’s going on in Kentucky?” Those who live here know there’s a lot going on. Lexington may be a mid-sized market, but it’s one that has a flourishing entrepreneurial community.
My friend Scott Shapiro, Lexington’s former Chief Innovation Officer, has done research on what he calls “University Cities” — mid-sized markets like Lexington, Madison and Ann Arbor, which are built around major research universities.
His data shows that these cities match the largest metros in talent, entrepreneurship and economic resilience at a fraction of the cost. The bottom line is this: Markets like Lexington give founders advantages that simply don’t exist in big cities.
Failure is survivable
Everyone loves a good entrepreneurial success story. The same can’t be said about the stories of failure. But even the most successful founders leave a trail of failures behind them. It’s inevitable.
I’m no stranger to failure. In 2017, I was running a clothing brand called Provisions, a Kentucky apparel brand built around giving back. We had a great product, customers and momentum. Then there was a market shift that impacted our licensing, and the ground disappeared out from under us. There was no pivot to make. The business was done.
In the end, that failure cost me a few hard months and a bruised ego. A year and a half later, I started Bolt Marketing, the agency I run today. If I’d been carrying San Francisco rent and payroll when Provisions went down, that story would have ended differently. In Lexington, the failure was tuition.
This is where the math comes into play. Housing, salaries, office buildouts and daily living expenses in mid-sized markets are a fraction of what they are in major metros, and all of it rolls up into one critical number: how long you can keep going before the money runs out. Lower costs mean more runway on less capital. When a failed idea costs you a few months instead of everything, you can afford to try, miss and try again.
You can make a name for yourself
In Silicon Valley, there might be thousands of businesses doing exactly what you do. You can produce excellent work for years and never make real headway. But in a mid-sized market, you can become the big fish, and if you do it right, you can get there fast.
Produce great work, make it visible, and the word gets around. Less competition and a tighter community mean a reputation actually builds, and a strong local reputation is something that will convert directly into revenue.
Networking in big cities is transactional. Everyone is hunting for their next opportunity, and genuine business relationships are hard to come by. I’ve seen this first-hand in bigger markets and have come to understand that mid-sized ones run on a completely different operating system. The business community is tight enough that real, collaborative relationships form on their own. Founders here look for ways to help each other. Those relationships become the most dependable source of referrals and new business you’ll ever have.
At Bolt, we regularly host happy hours, panels and events to bring the Lexington business community together. Nobody’s pitching anybody. People show up to learn from each other and enjoy the company, and lasting relationships come out of that. It can be harder to replicate that in a transient city of 8 million.
It’s easier to hold onto top talent
In hyper-competitive markets, your best people are always one recruiter call away from leaving. There’s always going to be a better offer somewhere. This means frequent turnover and constant pressure to keep your team intact.
In markets like Lexington, fewer businesses are competing for the same employees, and people live here on purpose. Family, affordability, lifestyle. When someone can buy a house, raise kids and still do work that interests them, they have far less reason to shop around.
This stability compounds. Institutional knowledge stops walking out the door every 12 months. Culture has time to form. People grow within your company, rather than treating it as a layover.
It’s not all easy
The advantages of mid-sized markets are very real — but there are downsides to any geography. You can’t have a surfing company in Omaha. But even beyond the obvious mismatches, if your business depends on large outside investment, the coastal metros give you more shots at that funding. And your local market in a smaller city is automatically smaller, which means some businesses have to think beyond their home geography from day one.
But these constraints push you toward building a stronger, more financially sound company from the beginning. The limits of a mid-sized market sharpen you as an operator.
Choose the unexpected location
I love big cities. There’s an energy about them that is infectious, and you can’t help but want to create. But energy doesn’t pay the bills; opportunity does, and it lives in more places than people think. The most interesting thing you can do as a founder is the thing people don’t expect, and building a thriving company in an “unexpected” place is exactly that. It makes you distinctive. It lets you build a team with hometown pride. It connects your journey to a community that will show up for you in ways a major city never will.
And the case for building business in unexpected geographies keeps getting stronger. In a post-Covid world, remote work erased the last real argument for coastal geography. Your clients, your talent and your capital no longer require a specific zip code. You don’t have to move to where people think founders should go. You can build a successful business right where you are. Pick a mid-sized market, plant your flag, and get to work. To some, you may look like a farm league founder — but the farm league is where the big leaguers come from anyway.
Key Takeaways
- Mid-sized markets give founders advantages that don’t exist in big cities. They match the largest metros in talent, entrepreneurship and economic resilience at a fraction of the cost.
- In mid-sized markets, failure is survivable. When a failed idea costs you a few months instead of everything, you can afford to try, miss and try again.
- It’s also easier to make a name for yourself, form lasting business relationships and hold on to top talent.
- While there are many advantages to building in a mid-sized market, it’s not all easy. However, the limits of a mid-sized market sharpen you as an operator.
If you tell someone you’re an entrepreneur, they’ll assume you’re from one of the anointed cities: New York, Silicon Valley, maybe Austin or Miami. Start a company outside of these major metros, and the general read is that you’re a farm league founder.
I know otherwise. I’ve built seven companies, all in my hometown of Lexington, Kentucky. I travel regularly, and when I tell people I’m from Kentucky, they often look surprised and say, “What’s going on in Kentucky?” Those who live here know there’s a lot going on. Lexington may be a mid-sized market, but it’s one that has a flourishing entrepreneurial community.
My friend Scott Shapiro, Lexington’s former Chief Innovation Officer, has done research on what he calls “University Cities” — mid-sized markets like Lexington, Madison and Ann Arbor, which are built around major research universities.
