Reinvention 2013

Here's a look at the entrepreneurship scene in five small U.S. cities.

Burlington, Vt.
Population: 42,645 

No longer just the ski-in, ski-out state for weekend warriors from Boston and New York, Vermont has become a destination for entrepreneurs with national and global ideas.

It's a far cry from 2000, when Cross and his partners launched FreshTracks Capital. Back then, he says, he might have looked at 15 to 20 business plans a year from the region. These days there's no shortage of great ideas brewing in Burlington and surrounding communities.

Last October, for example, the Entrepreneurship Club at University of Vermont held its first business plan competition, says Cross, who helped with the event. "We received 66 entries,” he says. "Probably half of those were software-enabled businesses.”

Chico, Calif.
Population: 86,300

This college town about three hours north of Silicon Valley has a surprisingly robust startup community. Chalk it up to fresh air, a diverse student population and plenty of craft beer from the likes of Sierra Nevada Brewing.

Like many cities in California, Chico's housing market was at the epicenter of the housing crisis. Median sales prices, according to Zillow, peaked at $342,000 in late 2005 and bottomed out at $211,000 in May 2012. The rest of the local economy felt the aftershocks, says Jon Gregory, managing director of Innovate North State, a public-private partnership that supports high-growth startups in the region. Yet, as in many cities, new ventures plowed ahead.

Lehi, Utah
Population: 48,700

When Tom Karren launched his mobile- and cloud-computing company, MokiNetworks, in 2009, he assumed most clients hadn't heard of the town of Lehi. But these days, he says, it's the place to be. "For us it's a competitive advantage to say we're in Lehi,” he adds.

Iowa City, Iowa
Population: 68,900

Among literary circles, the city is known for the world-renowned writing workshops at the University of Iowa. In recent years, however, the city has been pushing its creative limits with high-growth startups, many of them focused on education.

Lansing, Mich.
Population: 114,605

The stories of how bad things were in Michigan during the recession are legion. In Lansing, Michigan's capital, the state government and nearby Michigan State University offered some buffer, but the auto industry still played a major role in the city's economy. When the Lansing Car Assembly closed in 2005, for example, it put 3,500 people out of work, and was one of many blows to the area.

"The recession hit Michigan much earlier than the rest of the country,” says Paula Sorrell, managing director of entrepreneurship and innovation for Michigan Economic Development Corporation.

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