Silicon Prairie: What's behind the growth of the Midwest as a technology startup hub

California's Silicon Valley is world-famous as a hotbed of entrepreneurial innovation, but it's not the only place where fast-growing tech companies can launch. Many new tech companies are starting up in an unexpected location: the Midwest. Across the Great Plains, from Des Moines, Iowa (my home city) to Lincoln, Nebraska, to Kansas City and beyond, there are many new startup companies forming in the Heartland. Although the Midwest is often known for growing crops more than growing startups, there are many unique factors that are making the Heartland's “Silicon Prairies” into a hot destination for tech companies.

Here are a few of the biggest trends that are making the "Silicon Prairie" a new hub of tech startups:

Supportive Community: Stephanie and Paul Jarrett founded a startup in 2012 called Bulu Box, a monthly subscription service delivering samples of premium health products – and they decided to leave San Francisco to be part of the “Silicon Prairie” scene in Lincoln, Nebraska. They told CBS News that the community in Lincoln, Nebraska has been incredibly helpful. Stephanie Jarrett was quoted as saying, "It felt like people in Nebraska -- investors, other connections -- would bend over backwards to help you." Today, Lincoln, Nebraska is home to more than 100 startups. In my home city of Des Moines, entrepreneur Ben Milnestarted a company called Dwolla which has a massively ambitious goal – to change the way the financial system works by enabling people and businesses to move money via the Internet, at as low of a cost as possible. Milne has been quoted as saying that he wanted to grow his company in Des Moines, instead of in a big city, in part because of the great network of relationships that he was able to build within Des Moines' unique business culture. Some startup CEOs might find that they can get more attention and support from the community in a smaller Silicon Prairie city, rather than trying to break through the clutter and competition of a larger tech scene.

Low Costs: The cost of living and the cost of doing business in the Midwest is massively cheaper than Silicon Valley. For example, according to stats cited by CBS News, the median home price in San Francisco is $1.1 million, but in Lincoln, it's only $158,000. These lower costs translate to everything from salaries to office space, making it easier for young startups to get off the ground with less capital. And starting a business by bootstrapping is very much in line with the traditional Midwestern ethos of frugality and humble hard work.

Great Lifestyle: Many people on the West Coast might think of the Midwest as being “flyover country,” with nothing to see buy cornfields and cows – but the small cities of the Midwest are undergoing a cultural renaissance and are now home to exciting restaurant scenes, great nightlife, vibrant public spaces, and all of the other lifestyle amenities that might only have been found in big cities in previous eras. My home city of Des Moines, Iowa – once known for being a sleepy, deeply un-hip hub of insurance companies and agribusiness – is now home to a thriving arts and culture scene and was recently the subject of a lengthy Politico article called “How America's Dullest City Got Cool.” Midwestern cities are showing a renewed sense of swagger as they compete for jobs, investment and population growth with the rest of the country – and newcomers to the “Silicon Prairie” cities are often impressed at how great the lifestyle can be, especially with a more laid-back pace of life than they might have experienced in a more expensive, more competitive, stressed-out big city.

Could it be that the next Google or Facebook will come out of Lincoln, Omaha, Kansas City or Des Moines? The “Silicon Prairie” is growing fast – and cultivating big ambitions. Now that the Internet has opened up new possibilities for collaboration and investment, great ideas for entrepreneurship can truly come from anywhere. The future is likely to see even bigger success stories from “Silicon Prairie.”

For more about the Midwest startup scene, check out Silicon Prairie News.

Photo Credit: inkknife_2000 (6 million views +) via Compfight cc

 

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