I understand the feelings toward the midwest, but you also made a reference that its not like the "coast" do you think there are other areas that are well suited for startups, such as boston, NYC, or Atlanta?
I don't think that is the authors point. I think the point is that the _majority_ of startups you see on the coasts wouldn't _likely_ succeed or originate in places like Chicago, Omaha, Kansas City, Minneapolis because people are less open to risks of that nature. There are new businesses / startups in the Midwest but the majority worry about the business plan from the outset, rather than later. I didn't read the article as negative on the Midwest, rather, showing the differences in the areas.
If you are really good at what you do, and if you understand how real startups work, it becomes clear that location is the most irrelevant factor to success. I second Jason's views. If someone isn't going to work with you because you refuse to move to South End, Mountain View, or Brooklyn, then they can go fuck themselves. I travel to these places quite a bit though, and I love having a career that brings me to both coasts often.
The Midwest is the perfect place for a startup. Now that being said, Chicago has an entertaining startup scene. Entertaining in that I feel like they are trying too hard to be like San Franscisco.
I grew up just outside of Cinci. I've lived in New York, and it's nice. Lived in Boston for a while, always a lot of fun activities and good food. Currently living in South Carolina, and the weather is great and people are pretty friendly.
But my heart will always be in the Midwest. Wide open spaces, friendly people, affordable <everything>, tolerable seasonal patterns.
I don't have any experience with the startup scene, I imagine it's not fantastic =/
I've only recently started investigating Chicago as a place to startup anything, but I'm not looking in the sectors where you are looking. I don't have any frustrations to vent; I like the midwest.
I like to believe the midwest is actually a better place to do a startup than NYC or SF primarily because the cost to bootstrap is much lower here. What about just building your prototype in the midwest and taking it to the coast for funding? I don't feel like capital is really confined to specific regions anymore, and Chicago is only a 3-hour flight from NYC.
There are startups in the midwest, but it's very hard to get funding here: Exec teams have to spend a lot of time traveling to raise money. Still, there are sectors where the midwest is a clear competitive advantage: You can build a biotech startup working on agriculture in California, but if you need to hire crop scientists and test equipment in farms, you are better off in a midwestern metro, 45 minutes away from large corn and soybean operations.
You might want a small office in Boston or San Francisco too though, just to cut exec travel to see investors.
As a midwestern startup-y guy, with coastal exposure, and a number of friends and acquaintances who are trying to, and/or have landed vc, some of whom have moved to the coasts, some who have not: I think this article is more self-congratulatory bullshit from coastals who thing the sun shines out of their nether regions.
Some points:
1. It's _very_ hard to raise vc out here. We like it that way (at least I do). There, I said it. The pie in the sky bay area nonsense ideas just don't hold water here. Nor should they there, but they do. Twitter couldn't happen in the midwest, it shouldn't have happened anywhere else either.
2. Stealth mode. anything you do here is stealth mode. Probably forever.
3. LOTS of startups move from here to the coasts when they start to pick up.
4. As a midwestern startup, you need business presence on one or more coasts, so there are significant efficiencies to be gained by moving your entire operation there. Unfortunately, everyone else has the same idea, so rents are huge, and the giant money you have to pay the local talent just winds up in landlords' pockets in the end.
5. If you can do startup-y stuff from the midwest, for coastal clients, you will live like the king of france, in your giant, and incredibly cheap house.
6. Many people dislike California, and/or Californians.
7. If you can make it here, you can make it anywhere.
8. Many natives of the coasts have never even been to the midwest. Ever. The midwest is an enormous geographical area, full of enormously different people. To paint the midwest with a single brush is incredibly ignorant and patronizing.
9. Many midwestern families haven't lived on farms for hundreds of years. Just thought I'd mention it.
10. Working insane hours just means you're young. Kids do that in flyover country all the time, usually to make up for the crap quality of their code in volume.
I’m in a weird situation in that I started my education and career on the West Coast, but ended up on the Midwest a decade later for personal reasons. I do have to say that the business culture differences are astounding. Obviously I’m generalizing, but Midwest business culture is incredibly risk averse and VC money tends to flow to niche high research fields that the investor either came from or understands really well (e.g. Biotech). I’ve started to see some small changes with some funds looking to invest in “general” startups, but the capital is astonishingly weak.
Honestly though, I’ve come to appreciate it (even though it can drive me batty - Midwest “nice” is a real thing and can be a severe hindrance to effective communication), as I think it forces a level of creativity and resiliency on me that I didn’t need in the West Coast. Finally the tech community out here is so small that people really genuinely seem to look out for one another and be genuinely interested in what other people are doing as you never know where the next job is going to come from.
Sadly, no. There are definitely entrepreneurial/startup-minded people in the Midwest, but they are scattered and not organized, there's nothing approaching the concentration of talent and events that exists in the Bay Area.
That's one of the main reasons why I'm dropping everything and moving to San Francisco in about a week to work on my startup. As much as I like Chicago, the connections and resources just aren't there yet.
As a Boston resident, but former midwesterner, I wish the story was "Midwest competitive with East and West Coast for venture totals". I think it's a real problem that venture capital is highly concentrated in just a few places.
I think pinning this on a "Midwest mentality" is really missing what is probably the biggest reason. _There is no tech industry in the Midwest_ If your starup fails there isn't another cool startup down the street you can work at instead (a la SF, NY, Boston, etc...) Startups here (I'm in Kansas) are real small businesses that either make money and allow you stay or fail and force to you move. You simply can't wait two years to figure out your business model or hope for a buy-out. It's just that simple.
Agreed, I understand the reasoning for basing so many start ups on the west coast, but not everyone wants to live there. It would be nice to have some more focus on the east coast...
Atlanta feels more like Chicago than SF to me -- the sprawl is worse, the weather is better (but it's certainly not the California coast), and the meathead culture is substantial although I'm not sure I can compare it to Chicago's.
The Olympics were a good thing for the downtown area, and there is some government willpower to make it more appealing to entrpreneurs -- notably in biotech. With the CDC, Emory, and Georgia Tech, things could certainly be worse for startups, but I still wouldn't pick Atlanta as a likely new startup hub. The same government support that keeps the city afloat also feels a bit stifling. Poverty in the city center and sprawl everywhere else is depressing. And the general perception of Georgia in the existing startup hubs is even worse than the area actually is; offering a group of hackers $1 million to move to the deep South sounds like a mind game or a social experiment, not a serious offer.
Compare: When the last tech bubble burst it seemed like a lot of engineers left the Bay Area and resettled around San Diego. La Jolla has UCSD, a pool of biotech serial entrpreneurs and angels, even better weather than Palo Alto, and decent burritos and pho. Public transportation could be better, and it is getting better. So, it would take some extreme persuasion to keep me from heading right back to the west coast when I finish grad school.
As a former midwesterner, most places don't have nearly the density of schools, people, infrastructure, etc to support a large startup environment, or even a medium sized one. Too spread out, too little emphasis on education. Pittsburg and Chicago are a notable exceptions.
There is a huge difference between founding a startup in the midwest and being an engineer in the midwest. I believe that gets lost in a lot of the rhetoric from both sides. I love hiring engineers in the midwest. Consistently great work ethics, etc, etc.
On the other hand, if you're an entrepreneur, you don't live in SF and you're building a consumer internet startup, you're fucked. Primarily because your access to capital is so limited it's ridiculous. Most people that live in the midwest aren't able to put in the time required to build out the relationships needed to successfully fundraise in the Valley.
Large Midwestern cities like Minneapolis and Chicago are quite liberal and have a lot of rich people who could fund startups. We actually do have a lot of tech in these places, but generally only because large companies are in these places and they need a lot of engineering.
The startup culture is not here of course, but the reasons are not the ones you list.
I live in Madison and believe it or not we have coastal VC-backed startups (including my own and a SoftBank-backed unicorn or two) and lots of professional engineers. A lot of people on the coasts are frankly just not that knowledgeable outside of their bubble and that’s okay, it really doesn’t mean that what the Midwest has isn’t significant. I have actually grown to quite like being an under the radar city for all the benefits that brings and having a different perspective on America
>If flyover states didn't produce these startups during the last decade of easy capital, I am struggling to see how there would be a new breed of startups when capital eventually tightens in the next few years.
The cost of living is lower here (the Midwest) and outside the coasts in general. It's easier to bootstrap. There's plenty of successful startups that started in the Midwest, they're just not the Big 3.
>individually any one of them lack the capital and talent concentration to compete with coastal cities. A much better strategy is probably to focus the entire investment portfolio in Chicago or Detroit
And create another SV situation where all of the talent is squeezed into one small geographic area (granted, with less insane building regulations than SV), in an age where we can effectively work from anywhere in the world that we want to? Hard pass.
>Finally, when you scale your startup to 10s of billions, you will need to attract immigrant talent. Which is much easier to do in the coasts.
I'm not convinced that we actually lack Americans capable of doing the jobs we need to do. Immigration has been increasing in the past 10 years or so in the Midwest though, despite still lagging behind the coasts, for whatever that's worth.
So I might phrase it as "the Midwest is a great place for a startup to grow in" because what you said about families and startups is very true. When a company is ready for steady loyal employees, they can come to the Midwest and find them. As many companies are starting to do.
I read somewhere that the one thing all the startup hubs had in common was that they were a desirable place to live. This does not seem to describe just about anywhere in the mid-west with its bad climate and shrinking cities.
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