Forbes isn’t a big fan of setting up a business in Oklahoma.
In a list meant to trigger groans in some parts of the country, ego boosts in others, and plenty of data misunderstanding — Oklahoma is 42nd in the “Best States to Start a Business in 2023.”
But how accurate is such a list anyway? What factors are left out? Oklahoma, home to companies like Continental Resources, Love’s Travel Stops, Sonic, Paycom and many more, is Oklahoma really such a bad place to start a business?
Not exactly, according to local entrepreneurs and venture capitalists familiar with the process of launching new businesses in Oklahoma.
Forbes based its ranking on “18 key metrics in five categories” to determine which states are the best or the worst. The five broad categories include business costs, business climate, affordability, economy, and labor.
In three of the five categories, Oklahoma actually scored the median among all states (business costs, business climate, and economy). But a poor performance in affordability and a slightly below-median score in the workforce rankings dragged the state down.
There’s certainly work to be done, Erika Lucas said, but she sees little merit in lists like the one produced by Forbes.
“I don’t think entrepreneurs or established businesses look at these listings and then say, ‘Oh, no, I don’t want to be in Oklahoma,'” Lucas said.
Lucas is co-founder of StitchCrew – a company dedicated to connecting entrepreneurs with resources and networks to further energize their businesses. Among StitchCrew’s early projects was the Thunder Launchpad, an enterprise “accelerator” workspace launched in partnership with the Oklahoma City Thunder basketball team in 2018.
She is now working on a local project to help launch Latino-owned businesses with seven-figure earnings.
Funding continues to be an issue for Oklahoma businesses and entrepreneurs
Oklahoma scored lowest in affordability, according to Forbes. It’s been a problem for years, according to people like Lucas, but work is being done to improve the situation.
Nathaniel Harding of Cortado Ventures has worked with his company to raise capital and invest it in numerous Oklahoma-based businesses. It has seen a lot of progress in recent years, but there is still a long way to go.
“Compared to just a few years ago, there’s about 10 times more organized private capital in Oklahoma investing in startups,” Harding said. “However, compared to other well-developed startup economies, we still have 10 times more to do.”
Other companies, like Gener8tor, Boyd Street Ventures, i2E, OLSF and Techstars are helping to expand equity investing in the state, Harding said.
He doesn’t think Oklahoma’s current low ranking in the category should deter a potential entrepreneur from getting started in the state. With more growth every year, he feels now is a better time than ever to start a business in Oklahoma.
“Building your startup here means you have huge tailwinds and you’re part of the next big tech startup growth story in the United States,” Harding said.
Labor remains a challenge for entrepreneurs
Oklahoma’s workforce was the other category that lagged the national median, according to Forbes.
The publication measured quality by the percentage of college graduates in a state’s workforce. Depending on the type of work needed for a new business, this can be challenging for entrepreneurs.
It was for Sean Akadiri.
Akadiri founded AgBoost, a technology company that allows ranchers to track livestock data, including health and genetics, using DNA, in 2013. But finding skilled workers was tricky.
“For me, it was difficult because I had to look for out-of-state software developers,” Akadiri said.
Oklahoma, which often has a relatively low unemployment rate, has historically struggled in certain industries requiring higher degrees, including aerospace.
However, for many new business owners, labor is a type of downstream issue. Lucas told The Oklahoman, and Akadiri agreed, that entrepreneurs are often lucky to employ even a few people by the end of the first year or two.
Oklahoma offers something that doesn’t appear in the stat book
Akadiri started his business despite not being from the area (he was raised in Nigeria) and having relatively little knowledge of the agricultural industry.
“I’m not a cattle guy. … I just had an idea and was looking for different ways to execute it,” Akadiri said.
The environment was tough for many reasons, but he mentioned one reason Oklahoma was such a good place to start a business that Harding and Lucas also talked about.
Oklahoma offers an extremely collaborative workspace full of individuals willing to help others.
“It was easy for me to connect with the right people,” Akadiri said. “Oklahoma was really cool for me in terms of connecting with ranchers and operating in that space.”
“One of the things that makes Oklahoma unique for entrepreneurs is the availability of people to help them on their journey,” Lucas said. “You’re a degree of separation (far away) and you can usually ask someone to meet you. That’s one of our key differentiators, especially against larger markets.”
Now that he’s been running his business for a number of years and still growing, Akadiri feels he’s now at the point where he can be one to help others.
“There is still work to be done. This state is still a bit slow compared to other states,” Akadiri said. “If I had to do it again, I wouldn’t do it any other way, but it also gave me a great perspective on how to help others succeed as well.”