Why New Haven is a Destination for Entrepreneurs and Startups

Article written by Matthew Storeygard / Senior Investment Associate / Connecticut Innovations

Please click here to view his article online

Four reasons for entrepreneurs to be excited about where the Elm City is headed

 

1. New Haven’s residents are educated

Companies are finding a strong base of talent across industries. The city demonstrated the 5^th highest growth rate in college degree attainment between 2000 and 2010. The talent pool includes many graduates from Yale University, as well as other colleges and universities in the region.

The high number of well-educated residents also means a stronger economy. Those with advanced degrees earn more money, on average, and can afford to spend more locally. New Haven has been seeing this trend for several years now.

2. New Haven has culture

New Haven offers more food, art, and culture that most cities of similar sizes, making it an attractive place to run a business. It has the best pizza in the country (I’m partial to Frank Pepe’s – try the bacon and clam), is home to the world’s first hamburger, the Yale Art Gallery, which is completely free to the public, and the Peabody Museum. Combine this with exciting nightlife and beautiful scenery, and you’ll understand why the city has been getting a lot of attention for its culture in recent years:

• “New Haven is Happening” – New York Daily News
• “Yale and Hearty” – New York Post

3. The region has a diverse industry base

Not dependent upon one large employer or industry, the region’s sectoral diversity has helped it weather economic and social changes. It was even named one of the country’s 20 recession-proof cities during the recent economic downturn. While education and medicine represent New Haven’s core strengths, the city also has a base of talent in finance, IT, manufacturing, and other industries.

4. New Haven’s relationship with Yale has improved dramatically

Perhaps most import of all, Yale and the City of New Haven are working together to move the city forward. The divide between town and gown was previously a wide chasm, with a baseline of antipathy that occasionally erupted into larger demonstrations of tension and differences. By the time I came to New Haven, the leaders of both New Haven and Yale had recognized the symbiotic relationship, and have fostered a much closer partnership. A good example is the New Haven Homebuyer Program in which Yale provides financial incentives to employees and faculty to purchase homes within designated areas of New Haven.

A Generational Shift is Coming

We've long known that the real estate industry is aging, with the average salesperson now in his or her late 50s.  What we also know now is that the recent, long-lasting recession caused an entire cohort of people either to leave the business, or not get into it in the first place.  That leaves us, like architecture and other fields with cyclical demand and incomes, without the next generation ready to step up and lead, or, in this case, even to sell.

That's important to some extent simply because we currently have experienced real estate agents having to adjust to new technology, new laws, new ways of selling, and buyers who are often the age of their children.  While many are up to the task, or even more than up to it, there is a void left for buyers who wish to work with agents who look like themselves.  For instance, there is a shortage of supply among agents who have school-age children.  Also, our industry is less diverse--sometimes much less diverse---than the population we serve.  That is, in part, because the world is becoming more diverse as younger people intermarry, while older groups are often less likely to have done so.  Even our social customs have evolved, with younger groups less inclined to plan ahead, making it more challenging to plan showings and appointments.

What will the future bring?  What we are starting to see now is a much younger demographic entering the sales force, for several reasons.  First of all, there are very few barriers to entry.  You need a license, and some training, and you're good to go.  For kids having trouble cracking an anemic job market, real estate is an increasingly popular choice.  Secondly, it takes some time and some money to get going, since you live from commission to commission, and they don't happen right away.  So many boomers are now supporting their 20-something children, for recessional reasons and others, that they may as well support them to enter real estate, as pay their rent so that they can be an underpaid intern somewhere.  And, unlike that intern, they may be able to become self-supporting without changing jobs, as their skills and contacts increase.  As a parent, you can directly influence your child's income, by sending your friends and coworkers to him or her as clients!  Thirdly, real estate is a low-risk way to be in your own business.  It doesn't take much capital, unless you are the broker, but you are running your own small firm.  That appeals to millennials, especially since it doesn't require being at a desk at all, certainly not on specific days and at specific hours. It uses skills that are second nature to digital natives.  Even going to a party counts as networking, so there are opportunities to sell everywhere and at any time.  Finally, the real estate industry is ripe for change, for growth, and for the advent of a new generation.  In the midst of an entrepreneurial boom, real estate is front and center--everybody lives somewhere!