Silicon Valley and New York City get most of the press, but Sin City is a growing player among entrepreneurial hotbeds in the United States. Thanks to a number of factors, Las Vegas has made an expanding name for itself as a destination for startups and their founders.
The Emergence of Las Vegas
Bright lights, casinos, gambling, drinking, partying, clubs, and shows ... images such as these characterize Las Vegas in most of our minds. But it's time to throw some fresh verbiage into the equation: words like startups, investors, entrepreneurs, and small businesses.
The skyline of Vegas may look the same, but zoom in a bit, and you'll see there's a burgeoning startup scene that's gaining substantial prominence in industries that rarely look beyond the Bay Area and the Big Apple.
For years, steady revitalization has been happening in the shadows of the Vegas lights. But it's taken time for observers outside of Nevada to take notice.
Now that the word is out, experts are delighted about the news.
Five Reasons for Entrepreneurial Growth in Vegas
What is fueling the growth of startups and entrepreneurs in a city that's long been focused on only tourism? A few different factors are in play, so let's take a look at each, in order to get a better understanding of what's happening and why the future looks bright here.
1. Influence of Tony Hsieh
It's rare when can you tie a city's entrepreneurial explosion to a single person, but it's the most influential figure in Las Vegas's rise to prominence is clearly Tony Hsieh. The gregarious Zappos CEO has invested millions of dollars in the city and has turned it into a startup haven practically on his own.
Just a few years ago, Hsieh purchased 60 acres of land that's minutes from the strip, and infused hundreds of millions of dollars into establishing a school, venture fund, medical clinic, and other businesses. Since then, he's held the hands of promising entrepreneurs as they showed up and got rolling.
"In a mix of franchising and entrepreneurship, Hsieh's Downtown Project has 300 projects going on simultaneously," reporter Nellie Bowles explains, "from new restaurants to tech startups to social science experiments -- his small business founders make a salary and then 50 percent of the profit after paying their loans back to him."
Hsieh's approach to reshaping the image of Las Vegas is unique, but it's clear that it's working. Entrepreneurs are migrating to the city by the dozens each year.
2. Access to Amenities
People aren't only coming to Las Vegas because they've heard there are opportunities. They're coming because they know there's a lot to do.
Not only can you connect with fellow entrepreneurs, but the city boasts unique amenities, attractions, and a renowned nightlife just waiting to be enjoyed. "With its bright lights, booming nightlife, and rugged, beautiful desert surroundings, Las Vegas is a well-balanced mixture of tranquility and liveliness," declares a leading Las Vegas hotel search engine.
"Visitors stream into the city from around the globe to take advantage of the world famous casinos, adult and family entertainment, fine dining and high-end shopping opportunities, while a multitude of convention and conference centers entice thousands of business travelers each year with the lure of substantial after-hours perks."
In addition to prominent attractions like The Venetian, MGM Grand, and The Bellagio, residents as well as visitors enjoy highly rated restaurants with celebrity chefs, luxury shopping, and access to beautiful sites like Red Rock Canyon. Not bad for a city sitting in the desert!
3. Tax Structure and Cost of Living
When compared to the most expensive destinations such as San Francisco and New York, the cost of living in Las Vegas is incredibly low. And considering the fact that so many entrepreneurs have to live on marginal incomes when they start out, this is a major advantage.
It's obvious that larger cities command higher rent prices, but do you know just how much entrepreneurs can save by moving to Vegas? According to a 2016 study, the cost of a one-bedroom apartment in San Francisco and New York City is $3,600 and $2,200, respectively. By comparison, the same apartment in Vegas is just $875.
But it's not just rent; the Las Vegas tax structure is also quite friendly to residents. Nevada is one of seven states that doesn't collect an income tax. This encourages businesses to make more money and hire more employees, which creates a lucrative cycle to fuel the local economy.
4. Access to Investors and Funds
Of course there's a lot of wealth in Vegas. Since the house always wins, thousands of local businessmen and women are raking in solid profits and looking for ways to invest and spend. This represents a growing pool of startup investors.
Where there are wealthy and motivated investors, you find opportunities for entrepreneurs to fund their ideas. Apart from Hsieh, plenty of other individuals and funds have been supporting new businesses and cheering their success.
5. Tight-Knit Community
Everywhere you go, there are small communities in large cities. However, it's nearly impossible to find any other city in the U.S. that sports the size of Vegas, yet maintains a warm, small-town feeling.
Granted, Vegas is geographically spread out. The Vegas Strip is undeniably a huge tourist destination, but the city's million-plus residents tend to stick to the outskirts of town.
Despite that, the downtown area Hsieh has helped to build has a pretty strong, tight-knit vibe. This is especially true when you talk about the tech startup scene, where everyone seems to know everyone else.
What the Future Holds
Will Las Vegas enjoy sustained success and ultimately carve out a spot on the Mt. Rushmore of American entrepreneurial hubs alongside Silicon Valley and New York City? That much remains to be seen.
However, what we can say for sure is that Sin City is clearly making a name for itself outside of casinos and showgirls. The foundation that Tony Hsieh and others have placed won't disappear anytime soon.
The infrastructure is in place and Vegas residents seem to be rallying around the notion that their city could become something more than a tourist destination. For thousands of successful entrepreneurs and business owners, it could eventually be home.