Several CEOs weighed in on the misconceptions they have faced in starting and owning a business in Middle America.
Indianapolis has historically had trouble shaking the “sleepy manufacturing town” image, much like neighboring cities Cincinnati and Cleveland. But, when Salesforce announced the $2.5-billion acquisition of Indianapolis-based ExactTarget in 2013, the business enterprise community begun to reconsider the stereotype. Was innovation possible between your coasts?
“The Midwest isn’t the black hole many believe it to be,” said Steve Hershberger, CEO of Fishers, Ind.-based SteadyServ. “In a few ways, starting a company in the Midwest is strictly enjoy it is elsewhere. In different ways, it’s vastly different.”
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Regardless of the Salesforce hype, myths about entrepreneurship in “flyover country” remain commonplace in national conversation. Several CEOs weighed in on the misconceptions they have faced in starting and owning a business in Middle America.
Sparsity is among the most common myths about starting a company in the Midwest. Viable Midwestern startups are believed of like Silicon Valley unicorns: few in number. The assumption is that founders will have to try Reddit to get questions answered because they labor away within an empty Starbucks.
Dan Green, founder and CEO of Growella in Cincinnati, asserts that there is nothing further from the reality. “There’s an authentic symbiosis between large and small companies in your community, and that can not be overstated for a startup.” Green said. “The city is tight-knit and genuinely cares for just one another.”
Yaw Awning, founder and CEO of Sticksnleaves, echoes the lend-a-hand sentiment. “One incredible benefit of launching a tech company in the Indianapolis area that’s rarely mentioned is that, with a telephone call or a contact, you can talk with practically anyone in the town,” Aning said. “The amount of access you need to other entrepreneurs and leaders who’ve had success is unparalleled.”
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Entrepreneurs often go where funding is plentiful. While fewer VC funds call the Midwest home compared to the Bay, there continues to be cash to compete for. Indiana’s Elevate Ventures, Columbus’ Drive Capital and Cleveland’s JumpStart Inc. are firms continually planting seeds with companies over the Midwest.
"We’ve resources here that may change the world,” said Erica Waite, CEO of Ikove Venture Partners in Columbus, Ohio. “Lacking an identity as a tech startup hub will not need to be a barrier to starting and building companies.”
According to PwC’s quarterly MoneyTree report, 75 Midwest companies closed out the first quarter of 2017 with a combined $441 million in funding, making the common deal size about $5.8 million. While it’s still rare for a Midwestern company to improve a mega round greater than $100 million, the dollar stretches further in circumstances like Ohio in comparison to California. The cost of housing in the Bay Area is 62.6 percent greater than the national average. Work place will run you about $80 per square foot in SAN FRANCISCO BAY AREA, when compared to Cincinnati, Ohio average of just $18 per square foot according to Wallethub.
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“Cincinnati is incredibly affordable,” Green said. “Simply by being here, your runway is multiple months longer in comparison with companies in other cities.”
Additionally, many Midwestern cities are hungry for tech companies. The town of Fishers, an Indianapolis suburb with an evergrowing roster of software development and IoT businesses, offers flexible incentive packages for companies seeking to relocate. Several CEOs have enjoyed free business furniture and reduced lease on work place from the neighborhood economic development department.
A company is as effective as its people, irrespective of location. Warby Parker co-founder David Gilboa even goes so far as saying that CEOs are also CROs, or “chief recruiting officers.” The belief regarding the talent pool in the Midwest is strictly that — a shallow pool when compared to oceans of skilled job candidates on the coasts.
Yet, when you look at the number of top-ranking computer engineering and business programs at schools like University of Michigan, Northwestern University and Purdue University, it really is clear that the Midwest isn’t a talent black hole either. Furthermore, many Midwestern companies took a proactive method of priming another generation of leaders.
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“Since Appirio moved headquarters to Indianapolis from SAN FRANCISCO BAY AREA, we’ve increased our concentrate on hiring local talent as the Midwest has expanded in the technology industry,” said Steve Pruden, vice president of recruiting at Appirio. “We’ve invested heavily in recruiting and hiring Indianapolis-area talent, growing our headcount from 20 to a lot more than 150 local employees. To scale effectively — with skilled tech talent — we’ve discovered that recruiting efforts must start before graduation.”
Several Midwestern nonprofit organizations also have stepped up retain top talent. The Orr Fellowship, named after Indiana’s 45th governor Robert Orr, recruits top graduating seniors from universities in Indiana and Ohio and places them with vetted host companies. Furthermore to 2 yrs of full-time employment, Orr Fellows take part in a curriculum made to further develop entrepreneurial and business skills.
Aning, the Sticksnleaves CEO, was a 2007 Orr Fellow. “The fellowship was invaluable in assisting develop my business acumen,” Aning said.
Today, four years following the legendary ExactTarget acquisition, the tallest building in the Indianapolis skyline brandishes the Salesforce logo. CEOs over the Midwest are breaking bread together, finalizing investor slide decks and interviewing job candidates. Not merely is innov