Las Vegas Emerges as a Magnet For Entrepreneurs

Silicon Valley, New York City, Boston, Seattle and Los Angeles get most of the press. But Las Vegas has become a growing player among the entrepreneurial hotbeds in the United States. Thanks to a number of factors, Las Vegas has made a growing name for itself as a destination for startups and their founders.

The Emergence of Las Vegas

Bright lights, casinos, gambling, drinking, partying, clubs, and glitzy shows are typical images that characterize Las Vegas in most of our minds. But it’s time to throw something fresh into that stereotype - like startups, investors, entrepreneurs, and small businesses.

When flying into Vegas, the city may still look quite the same. But then you zoom in, and see there’s a flourishing startup scene that’s gaining substantial prominence in industries that rarely look beyond the Bay Area or the Big Apple.

For years, a steady reinvention has been happening in the shadows of the lights in Vegas strip. But its taken time for those outside of Nevada to take notice.

Five Drivers of Vegas Entrepreneurial Growth

What’s fueling the growth of startups and entrepreneurs in a city that for decades focused only on tourism and gambling? Several different factors come into play. In order to get a better understanding of what’s happening and why the future looks bright here, let’s take a look at each factor.

1. Influence of Tony Hsieh

It’s extremely rare when can you tie a city’s entrepreneurial explosion to a single person, but it’s clear the most influential figure in Las Vegas’ rise to prominence is Tony Hsieh. The Zappos CEO has invested millions of dollars in the city and, practically almost on his own, has turned Las Vegas into a startup haven.

Just a few years ago, Hsieh purchased 60 acres of land that’s near downtown, and infused hundreds of millions into establishing a school, venture fund, medical clinic, and other businesses. He’s also held the hands of promising entrepreneurs as they showed up and got rolling.

Hsieh’s Downtown Project has up to 300 simultaneous projects, ranging from new restaurants to tech startups to social science experiments. These small business founders make a salary and then 50 percent of the profit after paying their loans back to Tony Hsieh and his partners.

Hsieh’s approach to reshaping the image of Las Vegas may be unique, but it’s clear that it’s working. Entrepreneurs are migrating to the city by the many dozens each year.

2. Access To Amenities

Entrepreneurial minded people aren’t coming to Las Vegas solely because they’ve heard there are opportunities here. They’re coming because they know there’s a lot to do here.

Not only can you connect with local fellow entrepreneurs, but the city boasts numerous unique amenities, attractions, and a renowned nightlife just waiting to be enjoyed. Bright lights, world class restaurants, adult and family entertainment, and a booming nightlife, combined with extremely livable neighborhoods and rugged, beautiful desert surroundings, make Las Vegas a well-balanced mixture of tranquility and liveliness.

Additionally, a multitude of convention and conference centers in Las Vegas entice millions of business travelers each year with the lure of substantial after-hours perks.

In addition to prominent attractions like The Venetian, MGM Grand, Caesars Palace, 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, Mount Charleston, and Lake Mead.

3. Tax Structure and Cost of Living

When compared to more expensive destinations such as San Francisco, Los Angeles, or New York, the cost of living in Las Vegas is incredibly low. Since so many entrepreneurs have to live on marginal incomes when they start their business, this is a major advantage.

It’s obvious that larger cities command higher rent prices, and more and more entrepreneurs recognize they can save by moving to Vegas. According to a 2016 study by GoBankingRates, the cost of a one-bedroom apartment in San Francisco is $3600 per month. In New York City it’s $2,200. In New York, it’s $2,104. By comparison, a similar apartment in Vegas is just $875.

But it’s not just rent that’s substantially less here. Nevada is one of only 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

Additionally, there’s a lot of wealth in Vegas. With over forty million annual visitors coming to Vegas to gamble, shop, and play tourist, thousands of local businessmen and women are raking in solid profits and looking for ways to invest their capital. This represents a growing pool of startup investors.

Where there are wealthy and motivated investors, you find opportunities for entrepreneurs to fund their ideas. In addition to Hsieh, plenty of other individuals and funds support new businesses and root for their success.

Additionally, Las Vegas is now one of only perhaps a half dozen U.S. cities well positioned to siphon off some of the billions in venture capital previously reserved primarily for northern California.

5. Tight-Knit Community

In every large city, there are small communities. However, it’s nearly impossible to find any other city in the U.S. that sports the two million plus population of Vegas, and yet maintains a warm, small-town feeling.

Granted, Vegas is geographically spread out. The Vegas Strip running down the center of the city is undeniably a huge, growing tourist destination, but the city’s two million plus residents tend to stick to the outlying neighborhoods.

From an additional perspective, Tony Hsieh recognized that downtowns appeal both to millennials who prefer not to own cars and to baby boomers looking for simpler and more compact lives. Today, the Vegas downtown area Hsieh has helped to rebuild has a pretty strong, tight-knit vibe. This is especially pronounced when you talk about the tech startup scene, where everyone seems to know everyone else.

What the Future Holds

Will Las Vegas enjoy long term success and ultimately carve out a spot as a major American entrepreneurial hub alongside Silicon Valley, Los Angeles, and New York City? That is still a distant vision, and much remains to be seen.

However, what we do know today is that Las Vegas is clearly making a name for itself outside of casinos, showgirls and tourism. The foundation that Tony Hsieh and others have created here won’t disappear anytime soon.

The infrastructure is in place and Las Vegas residents are rallying around the idea that their city could become something more than a tourist and gambling destination. For thousands of successful entrepreneurs and business owners, Las Vegas could eventually be called home.