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Chicago vs Los Angeles: which city is a better choice for tech startups

You have decided to open a tech startup and have a big decision to make – Chicago vs Los Angeles. Both cities are great in their own right and have benefits over one another. But you need to pick the perfect location for your tech company. The Moving Company LA will tell you which city is a better choice for tech startups. We will compare the cities in multiple areas and decide on a winner. 

Chicago vs Los Angeles: the cost of living 

The first area we will compare the two cities is the cost of living. How much it will cost to live in a city is a big factor, especially if you are opening a tech startup. In the beginning, your company will struggle, and you will not be making any profits. Therefore, you should try and save money wherever you can – from living expenses to renting property. Let’s see an overview of costs between the Windy City and the City of Angels: 

  • When it comes to healthcare, there is not much of a difference. LA is only 2% more expensive; 
  • s;
  • The first big difference in price is in transportation. Everybody knows about rush hour in LA, and because of it, the cost of transport is higher by 19%.; 
  • The most significant disparity is in the housing market. Home cost in Chicago is 291,200 dollars, while in average cost of real estate in Los Angeles is 883,400%. Buying a home in Los Angeles is 200% more expensive.

In total living in Los Angeles is 64% more expensive than living in Chicago. And the difference in property prices applies to commercial real estate. To save money on a commercial property, rent out one in Chicago. When you find the perfect property for your startup, make settling in an easy task with Chicago office movers. This round goes to Chicago – it is way more affordable than Los Angeles. 

person holding money, read about Chicago vs Los Angeles
You and your employees will live more comfortably if you open your startup in Chicago.

The battle of the business markets 

Now we will compare the business markets of the two cities to see which one offers more opportunities for a rising tech startup. 

Let’s first talk about Chicago’s business market. By GDP, Chicago is ranked third in the country. Chicago has a diverse and balanced economy. The strongest industries are:

  • Manufacturing the city makes food, metals, and plastics. The industry employs almost half a million people; 
  • Transportation with many supplies companies having their warehouses in Chicago;
  • Finally, the most critical sector for tech companies is IT. The IT sector has grown fast because of the startup incubator 1871. In 1871 you will find over 200 tech startups with whom you can network and share your ideas. 

Now let’s talk about the economy of Los Angeles. When it comes to GDP, Los Angeles beats Chicago because it is ranked second in the nation. Leading industries in Los Angles are: 

  • Entertainment; 
  • Fashion;
  • Tourism;
  • And, of course, technology. But if you think the technology hub in Chicago was big, Silicon Beach is double the size. With over 500 technology companies and startups in the area. 

If we compare the economies of LA and Chicago, we can see that they are close. But if we had to choose a winner, we believe that Los Angeles has a stronger economy. California has the biggest GDP out of all the states. And LA’s entertainment industry opens up doors to new investments in tech and other sectors. 

graph on black tablet
Chicago vs Los Angeles: LA’s economy is stronger.

Chicago vs Los Angeles: the competition 

It is not enough to have a strong economy if you have to fight for a little part of the market. Let’s see in which city you can succeed easier. To open a successful tech startup, you need to conduct market research. One of the crucial pieces of information you have to find out is if you have competition. It is easier to stand out and succeed in a less hostile business environment.  

When it comes to which city has less competition, the answer is simple if we look at the differences in business markets. Chicago has less competition. There are fewer tech companies in Chicago, and you will not have to fight as hard to stand out and get investments. Therefore, you should open a startup in Chicago to avoid competition. And when you are relocating into your office, Golans Moving and Storage recommends you get someone to help with the packing. Tech equipment is fragile and needs extra attention to survive the transportation. 

Who has a better location? 

Chicago vs Los Angeles, the final battle is a battle of location. Both of these cities have wonderful locations. LA is on the sea and Chicago is on Lake Michigan. When it comes to weather, Los Angles definitely wins. There are only sunny days, and you can reach the beach fast. But when it comes to business opportunities, there is no context that Chicago wins. Because the Windy City is in the midwest, you can easily reach other parts of the country. New York is not that far away, where you can fly and network with other people in the tech industry. In addition, you can also reach Los Angels pretty easy to make connections there. Los Angles on the West Coast is unreachable to other people in the tech industry. 

map of America
Since Chicago is in the Midwest, you can reach other tech centers faster.

Final verdict 

Chicago vs Los Angeles – where to open a tech startup? It is a challenging question to answer. It was a close battle, but we think Chicago is the right choice. The differences in economies, opportunities, and location were small. What makes Chicago slightly better is the lower cost of living. You will get almost everything LA offers, except the weather for a low cost. And tech people do not even like to go outside that much. If you need any help getting your stuff to Chicago, contact us.

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