Study Summary: North Dakota Is No. 1 State for Startups

Written by: Kara Lidberg

It isn’t easy to start your own business, but staying local is a helpful way to begin.

Among reasons why startups fail, a bad location is one of the most common. In a recent study by WalletHub, analysts ranked all 50 states to determine which is the best for startup success. Ranked in the No. 1 spot, North Dakota received an overall score of 69.38, still more than 10 points above the next state in line, Texas. 

Overall Rank

1. North Dakota
2. Texas
3. Utah
4. Oklahoma
5. Nebraska

Categories Evaluated

Business Environment
Access to Resources
Business Costs

North Dakota ranked…

#1 in business environment
#5 in access to resources
#30 in business costs

Rather than moving to the Silicon Valley, consider staying in the Fargo-Moorhead area for the best startup opportunities!

Thoughts from a Local Startup Founder

Rick berg
Rick Berg, CEO & Cofounder, AdShark Marketing

1. Why did you choose North Dakota, or Fargo specifically, for your company?

“For me, I think Fargo rather chose me. It happened to be the city I lived and worked in at the time of initially launching our company. I had originally planned to move out to Silicon Valley to try and get a job with a startup out there, but then I was able to find a job at a rising young startup in Fargo called Myriad Mobile. The founders of Myriad (Jake Joraanstad and Ryan Raguse) were very supportive of me starting a company even while working for them and were instrumental in getting us some initial traction.”

2. What are the benefits you’ve seen being in this state/community?

“North Dakota, or more specifically Fargo, has been a great place to start a company. Our community here is very supportive of entrepreneurship, and organizations like Emerging Prairie do a great job of highlighting and celebrating local entrepreneurs. I feel organizations like these create a buzz or mindset that spreads throughout the community. It not only helps current or new entrepreneurs succeed but also inspires others to build new things. This type of energy has really fueled our growth and pushed us along the way.”

3. Do you believe that the economic policies being pursued by the Trump administration will promote new-business development?

“I don’t agree with everything Trump is going for but I definitely agree with much of his economic policies. I am a fan of less government and lower taxes and I feel like most people would agree that governments are very good at inefficiently spending tax dollars. Ultimately, I think cutting spending and the tax burden would be a good thing. I also really like the idea of attempting to bring manufacturing jobs back home. If he is able to achieve some of those things while not going massively more in debt, I think the economy, the country and new businesses would stand to benefit.”

4. To what extent do state policies, such as corporate tax rates, influence decisions about whether and where to start a new business?

“I definitely don’t think it is the first thing founders think of when launching a new venture. In my experience, most entrepreneurs start companies in or near the city they currently live in. I think those factors play a much larger role when companies are looking at relocating and expanding to a new territory. Additionally, I think these policies have a greater impact in situations where they are located near a state border, like in our circumstance of Fargo-Moorhead. It’s obvious to see that a person can save roughly five to seven percent a year in taxes by starting their company in Fargo rather than Moorhead.”

5. Are tax breaks and other incentives to encourage new businesses on net a good or bad investment for states?

“I believe it is a net good and it really just comes down to simple economics. In order to create a strong state economy, states need to create new jobs, maintain low unemployment, maintain a strong diverse workforce and have population growth. The best way I see to do that is to attract new businesses through some type of incentives.

“Keeping people in the state is key to our state’s economic success and a healthy entrepreneurial community is one good way to do that. College graduates and the younger generations seem to want new, exciting or interesting careers and many times those come from startups or young companies. The more new business growth we have in the state, the more likely the younger generations are to stay here.”

6. What measures can state authorities undertake in order to encourage entrepreneurs to start new businesses in their state?

“Tax breaks, business grants and other incentives are a great start but to further encourage more people to take the leap, I think we need better educational resources for potential entrepreneurs to turn to. I hear people say all the time, “I wish I owned my own business,” or, “I should just start a business,” but they rarely follow through with it. I believe that’s because either they’re afraid of the unknown or because they believe some of the common misconceptions about starting a business.

“I would really like to see a program that is run by experienced and current entrepreneurs and is less like a classroom and more of a mentorship program. People need to know the initial steps, considerations and legal aspects of starting a business but beyond that, every company is different. I think having an experienced resource to bounce ideas off of, answer questions or point you in the right direction when you need something would be extremely beneficial. The key to success really comes down to having solid mentors and I don’t think that would be too difficult in our community.”


AdShark Marketing

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Originally from Garrison, North Dakota, Lidberg has lived mostly in Fargo since the fall of 2013. She graduated from North Dakota State University in May of 2017 with a bachelor’s degree in journalism and a minor in theatre arts. Lidberg has a history as a reporter for her hometown newspaper as well as an editor for Fargo Monthly magazine. Currently, she is a freelance writer and editor, working with clients from industries like publishing, wedding, and human resources and on a wide range of topics, including agriculture, business, entertainment, marketing, and technology.