Getting in the Game, or Where to Start your Startup

Getting in the Game, or
Where to Start your Startup

By: Emily Twines
8 August 2019

You’ve finalized the design. Done the mock-ups, tested the prototypes. You’ve optimized supply chain management and know what your marketing strategy will be.

Bottom line: your product is finally ready for the marketplace.


Into what market should you first introduce your product?

It’s the million-dollar question faced by every Startup: where in the U.S. will my business have the greatest chance of success? Size of the consumer body and relative ability to market efficiently are two major and often considered criteria, but there is a third that merits attention: net disposable income; how much money do your potential consumers control that they could realistically spend on your product? Aston Martin makes beautiful cars, but if they invest in a new dealership where no one in the area has the budget for a luxury vehicle, then all the R&D and home run ad campaigns in the world won’t put rubber on the road.

You might think that looking at the average personal income might be sufficient to make your choice, and you might be right. But a more accurate data analysis takes into account “the difference between state personal income and state personal current taxes” (Dunbar, Ann E.); it considers average Disposable Personal Income (DPI).

So how much money does the average resident of each U.S. region have to spend on my product? The latest release by the U.S. Department of Commerce Bureau of Economic Analysis offers some substantial insights. Cities fare better than rural areas, but some statistics yield surprises: good old New York City, for example, only came in at 12th, and its West-Coast compatriot, Seattle, at 13th. Washington D.C., on the other hand just misses making the short list, ranking at 7th in DPI per MSA.

But if not NY, and if not Seattle, where, finally, should you make your first move? Take a look below at the top 5 metropolitan areas with the highest disposable personal income as you weigh the options for your new business venture:

  1. San Jose-Sunnyvale-Santa Clara, CA

    Coming in at a respectable 5th place out of 366 metropolitan areas, the San Jose-Sunnyvale-Santa Clara metro area boasts $48,304 annual DPI, and the growth of the region might give it a boost up in other categories of considerations, such as size of potential customer base. From 2010 – 2018, the U.S. Census Bureau found an increase in population size of nearly 700,000 for the San Jose-San Francisco-Oakland metropolitan area. Which brings us to #4…

  2. San Francisco-Oakland-Fremont, CA

    It will come as no surprise to any reader who has been to SF that this metropolitan area makes the list. San Fran comes in here at 4th place with $50,149 annually. The cost of living may be a deterrent, however — how far your dollar stretches in the local marketplace factors in to how much DPI a person really has. Your 50K left over in San Fran would go as far as only 36K in our top pick… But first, let’s take a trip way down south.

  3. Sebastian-Vero Beach, FL

    If you ever wanted to live by the water, check out this and our #2 options. With $50,471, this Treasure Coast location comes in a close third place for highest average DPI. Does the demographic makeup of this area offer the customer base you need? Be sure to take into account the sizable retiree community residing here before placing your security deposits. Or try our #2 listing:

  4. Naples-Marco Island, FL

    A destination location, this metro area comes in second with $51,635 to spare at the end of the day. Does your product cater to travelers? The tourist industry could also play into your decision making if you decide to go with Naples-Marco Island. But finally:

  5. Bridgeport-Stamford-Norwalk, CT

    If you’re going for New England, you might just want to consider the Bridgeport-Stamford-Norwalk metro area as it rings in at number one in this U.S. government study. The $61,174 extra bucks — that’s nearly $10,000 over its closest contender — makes this a pretty attractive locale. 

    And with the fall colors about to turn, it promises some pretty stunning landscapes to boot.

So that’s the top 5 metro areas ranked by Disposable Personal Income, but you may be wondering: what’s the toughest bet?

  1. McAllen-Edinburg-Mission, TX

    This region of Texas brings up the rear with an average DPI of $16,965, nearly 20K below the national average. But if you love McAllen, don’t fret — this study only provides one element to be considered amidst a host of other facts, figures, and gut feelings, so that doesn’t mean it’s still not the spot for you!

It’s a tough decision. But they don’t call it the million-dollar question for nothing…

Best wishes all, and happy hunting!

Pro-tip: government statistics are always behind those produced by the marketplace, so private data if you can access it will yield an even more current estimation.

Primary data set here; interpreted here.
Supporting data here.

Image by Rudy and Peter Skitterians from Pixabay

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