On Jan 23, I kickoff a five day tour of some of the Midwest’s most innovative cities and campuses. It seems fit to frame this with the oft quoted “Make no little plans” from our favorite son, planner and architect Daniel Burnham. He turned the railroaded cow town of Chicago into a model of urban innovation.
Silicon Valley is unequivocally this same model for startups and tech innovation globally. Its concentration of talent, risk taking mantra, capital and history make it one of a kind. Unfortunately, the Valley’s bending gravity leaves most investors blind to the forming critical mass of these same ingredients throughout the college towns and small cities in the Midwest – many of these places are becoming mini tech hubs. Why here?
Positive selection of people: 20% of the top 50 computer science programs, 26% of the top 50 med schools and nearly 30% of the top 50 b-schools are in the Midwest (US News). Startups are built on people, and like Silicon Valley, these programs draw the best of the best people from around the world. These are smart, driven people, willing to take risk.
Ideas are championed – nothing is impossible: The academic spirit aflame around these top academic institutions engenders both ideas and respect for ideas. This is a key ingredient as every startup begins with a founder’s idea and a few other people saying “wow, that’s a good one”.
Midwest values: However, without Midwest practicality, ideas would die on the academic vine. The Midwest values of sensibility and action-over-words drive practical application and progress. They ask of any idea “So what? Show me”.
Abundant talent: The institutions of the Midwest yield a wide and deep talent pipe – a few of whom become founders – but many more who can join an already seeded startups. While the job market here is healthy, it is not nearly as tight or as expensive as Silicon Valley. Talent is more affordable in the Midwest and yet itself can afford a better quality of life. This yields a more loyal talent base with less turnover.
It is true that for rapid scaling a startup will need to expand beyond a single college town or maybe even the boundaries of the Midwest. In any given Midwest city, the talent pool may be high quality, but is also usually small in absolute size, presenting denominator challenges as a startup gets large. There are also fewer people here who have built large tech companies – the startup DNA is thinner, though deepening by the year – and capital remains relatively scarce. When these considerations are balanced well with the upsides, however, big wins happen.
Most know about Grubhub, Groupon, Braintree in Chicago, but think also of ExactTarget in Indy, Workiva in Ames, Duo in Ann Arbor, Toa in Cleveland, just to name a few examples. There are many more to come. We are already thrilled to be part of FourKites and G2Crowd in Chicago and Farmlogs in Ann Arbor, a truly a unique startup hub.
There will be more big successes, and we are on the road to find them. For founders founding and others looking to join a startup, below is my schedule so far. Email me if you want to meet:
UPDATED 1/15
Mon, Jan 23: @ Purdue in West Lafayette, IN
Tue, Jan 24: @ The Water Council in Milwaukee, WI
Wed, Jan 25: AM TBD, PM @ University of Chicago
Thu, Jan 26: AM @ Notre Dame in South Bend, IN; PM at U of I in Champaign, IL
Fri, Jan 27: AM @ U of I TEC Center in Champaign, IL