Eighty percent of surveyed Philadelphia city-based tech startup CEOs and founders plan to build their businesses here over the next five years.
That’s according to the first benchmark Philadelphia Tech Startup CEO survey, led by Technical.ly Philly in partnership with the Center City District and Philly Startup Leaders. The 15-minute survey received 70 responses (representing 724 jobs) in a three-week period at the end of December 2013. The results were scheduled to be shared during a Philly Tech Week Economic Impact of Tech roundtable event this afternoon.
The firms that were surveyed included Adminovate, Artisan Mobile, BioMeme, ChargeItSpot, Clutch, Curalate, DuckDuckGo, edIQ, Locally, OneTwoSee, PeopleLinx, Relay Network, RJMetrics, SnipSnap, and VenturePact.
Here are some of the highlights:
- Philadelphia is an above average place to build a tech business — On a scale of 1-10, with 5 being average, respondents rank the Philadelphia region a 6.8. Nearly a third of them ranked Philly an 8, the highest single score.
- Philadelphia tech entrepreneurs are most often here because of family ties — 37 percent or 25 businesses are based in Philadelphia primarily because they have family here, the next highest amount, 8, were here because of college. Six respondents (9 percent) moved here to build their business.
- Connecting entrepreneurs has been Philadelphia’s biggest accomplishment for founders — 48 percent (32 companies) cited the growth of a network of local technology companies as the region’s greatest entrepreneurship success story.
- Most Philly tech entrepreneurs used personal money to start their current work — 73.85 percent of respondents funded their current venture with personal capital from previous work, a third are venture backed.
- Bootstrapping is the clearest differentiation for this low-cost, low-capitalized East Coast tech market — 52 percent (or 35 companies) said that paying out of pocket to start your own business is the strongest identifying factor of the tech/entrepreneurship community here. 13 percent said biotech/life sciences was the region’s biggest distinguishing factor, most of whom were suburban based.
- A lack of investment is the region’s largest barrier to growth — Half of those surveyed said so, followed by access to talent. Government/tax support/cost of doing business rank lower.
- Philly’s cost of doing business and access to other markets are the most cited reasons for regional advantage — Both were cited by 48 percent respondents. Universities come next.
- A third of Philly tech entrepreneurs cite an exit as their company’s best outcome — Fewer than 1 in 10 wanted to go public as their best outcome.
- The Center City corridor is the region’s hub of tech entrepreneurship — Specifically, 38 percent called Center City the primary tech hub and 28 percent cited N3rd Street in Old City.
CCD research analyst Lauren Gilchrist pulled out some trends comparing companies from the city and those based elsewhere in the region:
- 54.2 percent (25) of city companies plan to relocate to their own private office space in the next year.
- 75 percent of city companies anticipate hiring software developers in the next six months, compared to 52.6 percent of suburban companies. The highest in-demand position among the suburban respondents is product/project managers.
- While overall Center City was called the region’s tech hub, most suburban respondents think of University City as that hub.
- 79.2 percent of city companies say they will be here building their business in the next 5 years.
- Most city companies are plowing back their revenue from their current business into future operations as a source of capital. This compares to the suburbs, where more companies are using capital acquired from previous work.
- Philadelphia’s strongest assets for business-building were considered to be, in order: access to universities, access to other markets, quality of life for employees, cost of doing business, access to transit, access to customers, and access to talent, which all received “above average” (or 3) ratings.
- Suburban companies’ strongest assets for business-building were considered to be: quality of family offerings, including schools, quality of life assets, access to other markets, cost of doing business, access to customers, access to transit, and access to universities, all of which received “above average” (3 or greater on average).
Now for some clear warnings about the data. This is a small sample size data set meant to gauge perception, not to serve as a collective census. Of the 67 responses, just 19 were suburban based, which does convey the recent surge of early-stage tech ventures in the city but does not reflect that in sheer quantity, more regional tech firms are suburban based.
Additionally, like with any survey, the responses are self-selecting. Though Technical.ly Philly sought widespread responses, any group of responders inherently bring their own biases.
Knowledge is power!
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