Forbes is not very interested in starting a business in Oklahoma.
In a list that’s supposed to provoke groans in some parts of the country, ego boosts and data misunderstandings in others — Oklahoma ranks 42nd on the “Best States to Start a Business in 2023.”
But how accurate is such a list anyway? What factors are ignored? Is Oklahoma — home to businesses like Continental Resources, Love’s Travel Stops, Sonic, Paycom, and more — really a bad place to start a business?
Not exactly, according to local entrepreneurs and venture capitalists familiar with the Oklahoma business startup trend.
Forbes based its rankings on “18 key criteria in five categories” to determine the best or worst states. The five broad categories include business costs, business climate, financial access, economy and labor.
In three of the five categories, Oklahoma actually scored about average among all states (business costs, business climate and economy). But a poor showing on financial access and a slightly below-average score on the workforce ranking dragged the state down.
Erika Lucas said there is certainly work to be done, but she sees little merit in lists like the one compiled by Forbes.
“I don’t think entrepreneurs or established businesses are going to look at these listings and then say, ‘Oh, no, I don’t want to be in Oklahoma,'” Lucas said.
Lucas is the co-founder of StitchCrew – a company that connects entrepreneurs with resources and networks to further their business. Among StitchCrew’s first projects was Thunder Launchpad, a business “accelerator” workspace launched in 2018 in partnership with the Oklahoma City Thunder basketball team.
He is now working on a local project to help launch Latino businesses into seven-figure incomes.
Financing continues to be a problem for Oklahoma businesses and entrepreneurs
According to Forbes, Oklahoma scored the lowest for financial access. According to people like Lucas, this has been a problem for years, but work is underway to improve the situation.
Nathaniel Harding, of Cortado Ventures, has worked with his company to raise capital and invest in many Oklahoma-based ventures. He has seen a lot of progress in recent years, but he still has a long way to go.
“Compared to just a few years ago, there is almost 10 times as much private equity capital in Oklahoma investing in startups,” Harding said. “However, compared to other developed startup economies, we still have 10 times more opportunity.”
Harding said other companies such as Gener8tor, Boyd Street Ventures, i2E, OLSF and Techstars are helping expand equity investments within the state.
He doesn’t think Oklahoma’s current low ranking in this category should stop a potential entrepreneur from setting up in the state. With more growth each year, he feels it’s as good a time as ever to start a business in Oklahoma.
“Building your startup here means you have a huge tailwind and you’re part of America’s next big growth story in tech startups,” Harding says.
Labor is still a challenge for entrepreneurs
Oklahoma’s workforce was another group that lagged behind the national average, according to Forbes.
The publication measured quality by the percentage of college graduates in a state’s workforce. Depending on the type of work required for a new business, it can be challenging for entrepreneurs.
For Sean, it was Akadiri.
Akadiri founded AgBoost in 2013, a technology company that allows ranchers to track livestock data, including health and genetics, using DNA. But it was difficult to find skilled workers.
It was difficult for me because I had to look for software developers out of state,” Akadiri said.
Oklahoma, which often has a relatively low unemployment rate, has historically struggled in some industries that require advanced degrees, including aerospace.
However, for many new business owners, labor is a major problem. Lucas told The Oklahoman, and Accadiri agreed, that entrepreneurs are often lucky to hire even a few people by the end of the first year or two.
Oklahoma offers something that doesn’t show up in the stat book
Despite not being from the region (he grew up in Nigeria) and knowing relatively little about the ag industry, Akadiri started his own business.
“I’m not into cows…I just had an idea and I was looking for different ways to implement it,” Akadiri said.
The environment was difficult for many reasons, but he cited one reason Oklahoma was a good place to start a business, which Harding and Lucas also discussed.
Oklahoma is an incredibly collaborative workplace, full of people who are willing to help others.
“It was easy for me to connect with the right people,” Akadiri said. Oklahoma was really great for me in terms of connecting with ranchers and working in that space.
“One of the things that makes Oklahoma unique for entrepreneurs is how accessible people are to help them on their journey,” Lucas said. “You’re one degree of separation (away), and you can usually get someone to meet you. That’s one of our key differentiators, especially compared to larger markets.”
Now that she’s been running her business for several years and continues to see growth, Akadiri feels she’s at a point where she can help others.
“There is still work to be done. The state is still a little slow compared to other states,” Akadiri said. “If I had it to do over again, I wouldn’t do it any differently, but it’s also given me a great perspective on how to help others succeed.”