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Key Takeaways AI and remote work have erased the two biggest reasons founders used to move to Silicon Valley or New York — access to talent and access to tools — leaving affordability, tax climate, and quality of life as the real deciding factors.
The fastest-growing states for new business formation aren’t the traditional hubs but places like Wyoming, Oregon, Mississippi and North Dakota, signaling that entrepreneurial wealth creation is being redistributed across America in ways that reward founders willing to look past the coasts.
From movies to novels, we’ve been told that a business sprouts best in the most fertile garden. In The Social Network, Mark Zuckerberg drops out of Harvard and heads west to grow Facebook in the new tech hub of Palo Alto. The Great Gatsby finds rural North Dakota boy James Gatz moving to Long Island to build his business and reinvent himself in the process.
These may be works of fiction, but in real life the startup guide has been the same for decades. If you wanted to launch a successful business, you went where the opportunity was. In this vein, Silicon Valley became synonymous with innovation. New York dominated finance and media. Boston excelled in biotechnology, and so on.
Today, that assumption is extinct. AI, cloud computing and the adoption of remote work have changed the dynamics of starting a business. Founders no longer need to be in a major civic hub to access trained talent, sophisticated business tools or even global markets. Aspiring founders are now choosing where to build companies based on affordability, operating costs and lifestyle.
More than 548,000 new U.S. business formations took place this past June, the strongest June on record, and nearly 3.5 million through the first half of the year. But the interesting trend is where many of those businesses are launching. States like Oregon, Mississippi and North Dakota posted some of the nation’s strongest year-over-year growth, while Wyoming remains a magnet for new business formations, especially LLCs and out-of-state ventures. These hotspots underscore that entrepreneurial momentum is becoming more geographically diverse.
AI changes the economics of company building
Until just a few years ago in the pre-ChatGPT world, launching a startup usually required hiring employees or outsourcing work. Entrepreneurs needed analysts to conduct market research, programmers to develop websites, designers to create marketing materials, writers to produce content and customer service reps to serve as liaisons. Now AI allows founders, even solo or two-person ventures, to perform many tasks themselves before making their first hires.
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