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When it comes to launching the next on-demand, social, consumer-focused app — your Facebooks, Instagrams, and Snapchats of the world — Silicon Valley has no equal. But mankind cannot live on social media alone, and no one is more familiar with that truth than those of us in the Midwest, where technology is less about sharing pictures of your lunch and more about growing the very ingredients on your plate.
While the Valley boasts more than 300 venture capitalists and, in 2015, nearly 800 companies received funding to the tune of more than $21 billion, the path forward for the burgeoning Midwest tech scene is not to directly compete with Silicon Valley. Rather, we need to focus on our own strengths — deep subject expertise in areas of agriculture, farming, animal health, to name a few — and compete where the Valley and coasts simply cannot. If we do this, we can create the initial spark that attracts more venture capital, research funding, and the necessary infrastructure to create a flourishing technological ecosystem in the Midwest.
Beyond the Valley
Just as talent exists everywhere, so too do the elements for entrepreneurial success. Building a technology ecosystem requires not just talent, but that initial spark, a cultural open-mindedness to entrepreneurship, research institutions, and the infrastructure to help build businesses — from accelerators, mentorship programs, and coworking spaces to the investments that fuel it all.
A 2016 study by Livability on the best cities for entrepreneurs, for example, shows that a plethora of cities between the coasts offer all the necessary ingredients for success. Seven of the top 20 on this list call the Midwest home, with many more non-coastal cities comprising the full list of 50 cities as published in Entrepreneur Magazine. A similar article in Forbes includes cities such as Omaha, Minneapolis, and Oklahoma. Outside of the coastal hotspots of New York, Silicon Valley, and Texas, the majority of Fortune 500 businesses, in fact, dwell in the Midwest.
So what do these entrepreneurial hubs have in common?
● Ready pools of talent: Attracted by a low cost of living and a desire to build something new close to home, workers — many of them graduates from Midwestern universities — gravitate toward tech companies that in turn offer unique cultural benefits.
● Famous Midwestern work ethic: Notorious for a just-the-facts approach to business, the typical Midwestern work ethic serves as a backbone for polite networking and a willingness to roll up our sleeves and get the hard work done.
● Research facilities to provide support: The Midwest boasts a high number of universities with cutting-edge research facilities to foster innovation and provide necessary idea-support to entrepreneurs.
● Low cost of living: When compared with coastal counterparts, the average cost of living in the Midwest is significantly lower.
● Millennial-friendliness: Younger talent oftentimes cannot afford to buy or rent in one of the major tech hubs. Many locations throughout the Midwest offer competitive packages that enable an amenity-rich lifestyle.
● Place for young families: Not only does the Midwest cater to younger workers through support channels, affordability, and other Millennial-friendly factors, but our dollars go further here, and there’s affordable space with room to grow, making many cities great locations to raise families.
● Culture and ecosystem for startups: The culture and regional ecosystem is emerging in a way that can sustain a variety of niche startups to hone specialty sectors and capitalize on food, ag and larger business technology fields. Successful programs such as KCSourceLink and the KCRise Fund have emerged with significant investor funding to support the developing entrepreneurial ecosystem.
● Influx of local and coastal capital: Last but not least, there is an influx of capital flowing into the “Silicon Prairie” locally and also spreading dollars from the coasts.
Trying to impose the stereotypical values of Silicon Valley or the coasts upon the Midwest takes away from what makes us who we are. As Midwesterners, we are taught to listen — a Collaborative Economy. This value may be derided as simple-minded Midwestern politeness, but it sets us apart and gives us a competitive edge of our own — we listen when others simply talk over each other. As entrepreneurs, we need to be able to listen to our employees and customers to understand what to do next, and if we are too busy talking to listen, we may miss out on the minute points needed to succeed.
Similarly, Midwesterners have a moderate risk appetite and a common-sense approach to technology adoption. While this does not mesh well with exuberant Silicon Valley attitudes, our unique reluctance to fall for product marketing or hype contrasts with the early-adopter mindset. Take, for example, virtual reality — how long has it been hyped as the ‘next big thing’? Goggles and headsets are still sitting on store shelves or in-development, for the most part. When things do make sense, however, we are quick to adapt. In fact, several of the largest technology and engineering firms are based in Kansas City — Garmin, Cerner, Sprint, JE Dunn Construction, Burns & McDonnell Engineering, to name a few — and we have a strong reputation for problem solving and dealing with big issues such as mining, roads, water, electrical, agriculture, and farming.
Put simply, in the heartland we are quick to adopt practical, useable things that can be applied right now. We are less quick to adopt and pursue things that don’t apply to what we do. And the good news for us is that what we do matters the country over.
The Silicon Heartland
In Kansas City, we can see all of these elements in play, working to create a fast-growing ecosystem. We have a long history of entrepreneurship, starting first with farming, railroads and cattle, before moving into telecom, engineering, and healthcare. As a result, the Kansas City ecosystem is full of engineers, healthcare workers, and life-sciences experts. In 2011, Kansas City surpassed more than 1,100 applicants to become the first city to implement Google Fiber, which sparked the Startup Village, bringing together entrepreneurs from around the country, plus regional initiatives in digital policy, smart infrastructure, STEM programming, and more (KCDigitalDrive, KCSmartPort, TechWeekKC, KC Women in Technology).
Regional specialization is how the Midwest will win on its own terms — by creating an environment where a specific brand of technology can flourish. We will see Midwestern startups thrive in a variety of niche realms, such as agricultural engineering, point-of-care diagnostics, supply chain, handling, and logistics and food technologies such as post-harvest sorting, food waste reduction, and crop efficiency. Just consider the effects that drones, robots, sensors and the Internet of Things can have on the growing and distribution of food in our country.
This rich field of opportunity is primed for the Midwestern work ethic and sensible approach. We don’t need to compete with the coasts, we just need to get down to our own business.
Michael Helmstetter is cofounder, president, and CEO of TechAccel.
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