Jacksonville ranks among the top cities and regions in the world in fostering successful startup businesses and that’s no idle boast from local cheerleaders.
Really. It’s no joke. Even researchers were scratching their heads when Jacksonville popped up as a leading global entrepreneurial city.
According to the results of a two-year study released this month, Jacksonville is more conducive to startup business success than many cities such as Moscow, Miami, Atlanta and Tel Aviv, Israel.
The analysis conducted by the University of Southern California Marshall School of Business looked at global startup success for 2014 and 2015 and found that the United States created 65 percent of the world’s startup businesses or what the study calls “unicorn” businesses, startup companies that grew to exceed $1 billion in valuation for any month during the study period.
The Silicon Valley region of California led the world in those companies, accounting for 39 percent of the unicorns tracked in the two-year period. New York came in second with 9 percent, followed by Beijing at 6 percent and Los Angeles at 5 percent.
Among a slew of cities that had about 1 percent of the “unicorns” was Jacksonville. It was in a thicket that included Chicago, Singapore, London, Stockholm, Berlin, Moscow and Prague. Jacksonville ranked higher than Atlanta and Miami, which didn’t even show up.
BETTER THAN SYDNEY
Gerard Tellis, the USC professor who oversaw and compiled the results of the study, said when Jacksonville appeared among the world leaders in entrepreneurial development, he thought the study had gone awry.
“I thought it was an error. So I sent it back to my assistants,” Tellis said with a laugh. “We didn’t know there was a city called Jacksonville.
“Jacksonville was above Moscow, Sydney, Vancouver, Tel Aviv and so on, so I thought there must be something wrong,” Tellis said. “But it was correct.”
The anomaly of Jacksonville’s placement on the list caused Tellis to research further and he said the city showed up specifically because of one company: Fanatics Inc., the sports apparel and memorabilia online retailer that is now valued at over $3 billion.
Fanatics started as a small store inside The Avenues mall in 1995 and eventually grew into an Internet behemoth. The company, headquartered in Jacksonville, takes in more revenue than Nike and has huge production and service facilities on Jacksonville’s northwest side. It employs more than 6,000 people in over a half-dozen cities.
Last week, Fanatics acquired European Internet sports apparel company Kitbag based in the United Kingdom. That company alone has more than $100 million in annual revenue.
Given the huge growth of Fanatics, Tellis said the company reflects positively on Jacksonville as a startup community, even though he acknowledged he did not know there was a startup movement in Jacksonville.
“The thing that was a breakthrough was that they [Fanatics] moved online and were able to reach an audience that was far beyond Jacksonville, the whole U.S. market and probably a global market at this point,” Tellis said.
“You have small cities like Jacksonville which [technologically] are not on the map. But since they are not on the map they have nothing to protect so they are eager to move ahead. I think it’s that openness to new ideas, working hard to establish a climate toward enterprise that attracts business and enables business to grow,” Tellis said.
Attempts to reach Fanatics officials for comment Friday afternoon were unsuccessful.
Kate Stewart helped form the Jax Community of Entrepreneurs 1½ years ago to foster such a mentality. The organization, which now has more than 1,000 members, provides networking and support for entrepreneurs. It was developed as an offshoot of the One Spark crowdfunding festivals that started in 2013 and were originally geared toward highlighting startup concepts and entrepreneurial pursuits.
Stewart said while Fanatics is the stellar and rare example of a startup that rocketed to wild success, it remains an icon for the Jacksonville startup community.
“I think it’s hugely important,” said Stewart. “It doesn’t happen to very many companies. But the fact that we do have a local company that has produced over $1 billion in valuation shows that it’s possible and it’s possible in Jacksonville.”
Beyond Fanatics, other local companies that originated as startups are now enjoying financial success in Jacksonville. With that success, Stewart said, comes the template and path for others to follow.
“Startups that are successful, the founders and executives, are now spending time mentoring our new companies. So, we’re finding ways to build the bridges and allowing those who have gone before to leverage their experience to help the younger companies,” Stewart said.
Jacksonville City Councilman Aaron Bowman, who is also the vice president of the business development organization JAXUSA Partnership, said he wasn’t overly surprised that Jacksonville popped up in the analysis. But it is impressive, he said.
“It’s exciting. When you look at every big company, they all started off small,” Bowman said.
He said the city is already starting to see tangible impact from its reputation as a startup haven.
“What I’m seeing is quality of life. The young kids want to live someplace first and worry about their jobs second,” Bowman said. “They’re coming because of the Beaches, the river, the sporting venues, museums and social lives.
“Why is that important? Because if you’re not a young, growing city, you’re a dying city. So, bringing in the youthful energy keeps us at the forefront of everything,” Bowman said.
This story originally appeared in The Florida Times-Union.