Is it too late for Middle America?

Is it too late for Middle America?

For the past 18 months, I’ve been giving Steve Case’s book, Rise of the Rest out to future and current clients. Mr. Case is best known as the founder of AOL but in years past has continued to provide his view into the technology industry’s crystal ball. There are few I trust more to weigh in on incoming technological waves. You can imagine that as his book title attests, his belief is that the middle part of the country, long overshadowed by the invention, innovation, and entrepreneurialism on the East and West coasts, will soon come into its own. And as you also might imagine, I not only drank the Rise of the Rest Kool-Aid but dunked my head in for a nice long soak. Lately, however, I’ve started to ask some questions—mostly around geographically and cultural readiness.

For the past 18 months, I’ve been fortunate to have visited with folks in a number of markets—each with its own personality, history, and agenda: Ann Arbor, MI; Kenosha, WI; San Antonio, TX; Cambridge, MA; Dallas, Waco, TX; Nashville, TN; Chicago, Lincoln, NE; St. Louis, MO; Detroit, MI; Denver, CO; Milwaukee, WI; San Francisco, Portland, Austin, just to name a few.

It’s solidified my belief that there are Tech 1.0 cities and Tech 2.0 cities. In later posts, we’ll talk through some identifying characteristics of each but namely, my concern is for that of 1.0 markets in the middle part of the country.

Granted, my Middle American experience as it relates to readiness has been mixed. I would say that roughly half of those in Middle America has been open, ready for change and hungry to not only compete but transform. But the curiosity and my concern come from the other half that is not. Folks in the center part of the country pride themselves on being risk-averse, careful and slow to embrace change. There doesn’t seem to be a desire to not only get caught up on what the global economy has accomplished in the last twenty years but to surpass it and prepare for the future.

Unfortunately, these are exactly the opposite of the characteristics required to lead innovation economies.

But here is the true problem: as communities discern whether or not it makes sense to jump on the innovation bandwagon, other cities, including those on both coasts, are readying to double down on investment. The more advanced markets (i.e., Boston) have made those commitments already.

If 2.0 markets, in realizing the benefits of innovation-driven activity, are doubling down to compete on a whole new level, and the U.S. continues to see the rise in urbanization (younger populations leaving rural areas to seek opportunities in urban markets), what will this mean for communities still on the fence about positioning their markets?

I am compassionate for these communities. I often joke that they are “my people” having been raised in a very rural area of Illinois. There is nothing more powerful than the drive to help your tribe.

However, I’ve also come to realize that a certain minimal amount of courage is required to jump out of your comfort zone. Time will be our truth-teller in this case but may we see more and more Middle American communities using their courageous selves to indicate that they are ready to change. The future of their economies depends on it.

Engineers: The Next Power Leaders

Engineers: The Next Power Leaders

It used to be that the engineering crowd was often left out of critical strategic or vision-setting conversations. Ask any CEO about the future of business, what it takes to build a company, successfully grow a company, etc., and they’ll have answers and lots of very strong opinions. Technical leaders, trained for years in pattern recognition, problem solving, applied sciences and math, have had answers about the future but not necessarily a seat at the table. Thankfully, smart(er) CEOs today are changing that. More and more you’ll hear about specific strategic advisory functions CTOs take within the C-suite. The speed of digital and innovation disruption have necessitated it.

This particular trend was front and center this week while attending Voltage Control’s hashtag#ATXCTOSummit19 Tuesday. More than 150 CTOs discussed topics you might predict: machine learning, the challenges of scaling, and some new dialogue regarding an Austin diversity and inclusion initiative (https://lnkd.in/es_sN3a). It gave me great hope to watch this group of humble leaders lead discussions with a genuine intention to make the world a better place. It also gave me great hope knowing that our dependence on this category of competent leaders will only continue to grow.

Why the Midwest?

Why the Midwest?

Why will the Midwest experience an economic renaissance through tech? While there is trepidation and concern around the evolution of manufacturing and the rise of a new economic era, there is also excitement within the region. My conversations with numerous employees and industry leaders in the Midwest illuminate a clear intention to evolve Midwestern culture to embrace innovation. The time is ripe for this cultural shift for three main reasons: regional timing, capital efficiency, and grit.
As we’ve seen throughout history, the Midwest has successfully been able to shift into different economic models. In the 1800’s, the Midwest established itself as a farming and agricultural region. During and after the Industrial Revolution, they successfully added, and some shifted, to become a leader in manufacturing as well. However, what most don’t know is that in the last thirty years, the United States has lost five million jobs in the manufacturing sector. This translates to five million families– many concentrated in the Midwest– that have become severely impacted and essentially lost the very simple promise that was emblematic of that era. The promise that if you work hard, you can support your family and live a happy life.

As opportunities in manufacturing have become more and more scarce, there is an overwhelming recognition in the Midwest that it is time for another industry to come forward. Midwesterners are not ready to give up. They are ready for another industry change – a shift. They are ready for tech. The timing in the region is right for a significant economic shift.

So who will lead the Midwest into this new era of tech and innovation? We are going to need cities and companies to lead people through the transformation and evolution of the region. Already, we have multiple cities in the Midwest that will step forward sooner rather than later. Milwaukee, Detroit, and Cincinnati are all stepping forward as innovative economic leaders in the Midwest. Numerous corporations in these states are investing millions of dollars in early stage tech companies both inside and outside their state, utilizing new investment models, including the Fund of Funds approach. These new approaches are the perfect example and a clear signal that the Midwest is ready to make change. They have all of the pieces needed — including grit and capital efficiency — two other critical factors setting the stage for the tech evolution in the Midwest.

 

 

A Word on Resilience

A Word on Resilience

Resilience is one of the most prized traits in business, specifically in Silicon Valley and within any successful tech ecosystem. The new era of the innovation economy requires us to sail uncharted waters and invent creative solutions to unfamiliar problems. Investors are obsessed with finding entrepreneurs and industry leaders who not only have deep domain and technical expertise, but who have also failed before, failed often, and have not given up. The most successful companies are ones that are often led by chief executives, CEOs in particular, that have endured decades of trial and error, bumps along the road, and failure.

What we all know about failure, falls and injuries is that afterwards there is healing, reflection and if we’re fortunate, deep learning that occurs. Deep learning and reflection on past business failures translate into more effective and creative approaches to building companies, best practices in assembling strong teams, efficient and creative paths to profitability, and eventually, desireable wisdom.

Over the last few months, I’ve had the opportunity to reconnect with my Midwest roots since I’ve been practicing being a Texan. One story that is told over and over with varying degrees of scale is, “…we have experienced pain.” Specifically, the painful impact of lost manufacturing and other outsourced jobs, injury from fast-shifting global tides, and shattered dreams from broken work-hard-and-you-will-be-rewarded contracts with our country.

As we acknowledge and learn from the bumps, bruises and pain, I can assure you, this region will rise. Midwesterners invented grit and resilience. They are getting up from being beat down and they’re primed to take back their place on the mantle of American pride about place. Markets who have successfully turned to resilience as a prized, market-propelling attribute will increasingly be turning to the Midwest for lessons, best practices and their earned wisdom. The American Midwest is standing up again – what a powerful lesson for us all at an exciting time like this.