When SizeUp.com released a startup survey last year showing Fremont having the most U.S. startups per capita, the head-scratching was palpable. Among the head-scratchers were SizeUp and the City itself.

Aren’t
cities like San Francisco and Austin supposed to be leading the charge
in this area? Isn’t Fremont the place for major R&D operations like
Boston Scientific, Lam Research and Western Digital? The answers are
Yes, and, Yes. However, underlying the study are important facts
explaining why a manufacturing hub like Fremont is a stealth player in
the startup sphere.

In Mark Hendricks’ article about Fremont
startups, he cites history, education and incentives as reasons why
there are more than 21 startups for every 100,000 residents. We agree.
Here is our expanded analysis on the secret sauce for startups.

1. Spin-off of the Old Block.
History is a powerful force, and Silicon Valley’s roots run deep in
Fremont. We’ve seen our engineers from legacy industries such as
semiconductors fueling growth in new industries like clean technology.
As Hendricks says, “It certainly doesn’t hurt that one of the most
successful startups in history, Tesla Motors, bought the shuttered NUMMI
factory … to ramp up production of its Model S.”

2. Smart City equals Start-up Growth. Fremont is ranked No. 3 on the Reader’s Digest List of America’s 10 Sharpest, Smartest Cities,
based on the education profile of its residents ranging from Ph.D.
homeowners to the over-achieving students at Mission San Jose High
School where 95 percent of graduates go on to college. It’s no surprise
that this brain power is spilling over into new business endeavors.

3. Value matters.
Startups, especially ones in capital-intensive industries like clean
technology, are cost-sensitive. With 40 million square feet of
office/R&D/industrial space available, Fremont offers more
reasonably priced space and provides incentives to targeted growth industries.

4. Investment Connections.
Startups need venture capital connections, and we’re happy to report
that we have a bridge for that! In addition to housing a collection of
VCs right here in Fremont, the world’s largest supply is right across
the Dumbarton Bridge, which connects Fremont to Palo Alto and Menlo
Park. Last year alone, Fremont companies garnered $281M in VC
investments.

While we have SizeUp to thank for this recognition,
it’s up to us to maintain an environment that works for startups at all
stages of their growth cycle from small to large. We welcome that opportunity.