Innovation in the Midwest: Entrepreneurship outside of Silicon Valley

Innovation in the Midwest: Entrepreneurship outside of Silicon Valley

Kara Swisher, the doyenne of technology, recently interviewed entrepreneurs in Indiana about what makes the Midwest so special (brainpower), why the rest of the country should pay attention (special knowledge of certain industries needed to solve some of the biggest problems of our time), and what Midwesterners can do better to grow prosperous economies (position for innovation).

https://podcasts.apple.com/us/podcast/recode-decode/id1011668648?i=1000457516162

The Super Heroes of Middle America

The Super Heroes of Middle America

As Waymaker closes up a three-day tour with generous Midwestern hospitality provided by the leaders of the Cortex Innovation Community, it sinks in deeply: innovation leaders in the middle part of the country are made from a special kind of mettle. Leaders of Cortex, a 200-acre model innovation ecosystem built in the heart of St. Louis, started with zero resources and lots of resistance. I’m certain every breakthrough innovation leader would say the same, but St. Louis offers some unique and inspiring lessons for the rest of the middle U.S. Our takeaways from the trip can be applied to any of us pursuing advancement through technology and innovation: Champions and champion-level investments are required. While on the ground, much credit is given to founding partners BJC HealthCare, the Missouri Botanical Garden, St. Louis University, the University of Missouri-St. Louis (UMSL) and Washington University in St. Louis; not enough external recognition is given to the visionaries who “sold” the project and its required initial investment of $29M. William Danforth and the administration of Washington University strike me as the superheroes in this narrative, with later leadership coming from Donn Rubin of BioSTL; Dennis Lower of Cortex, and others. I left with astonishment as the true level of sacrifice and tenacity came into view.

Reinvention is a long game. Rushes to find partners, make commitments, or set trajectories will be met with certain failure.
Cluster strategies don’t always apply. Leveraging a market’s natural strengths makes sense for some, but not all markets in the middle U.S. Strengths in declining industries don’t always translate into success in innovation ecosystems, so new strengths must be imported and built. Place matters. I know we’ve all heard this, but it can’t be repeated enough. Next-gen workers rate environment much higher than former generations. Catering to their needs is not optional.

No One Can Do It Alone is Cortex’s slogan and its rung in my ears for weeks. Single entities (municipalities, universities, corporates) who have invested independently of one another in innovation efforts are already finding the error of their ways. While it’s understandable—this is a new game after all—institutions becoming inter-dependent will become the new skill, art, and key to success.

While St. Louis folks will tell you they’re still fighting for more growth, more inclusive prosperity, declining populations, and unequal access to education, they’ll also tell you there’s never been a better time to be in St. Louis. I would have to agree. To be affiliated with a project that has, against all the odds, made such progress in such a short amount of time tells me the flywheel is spinning and the future super bright. Kudos to the unsung innovation superheroes of St. Louis, Missouri.

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.

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.

 

 

On Grit & Motivation

On Grit & Motivation

To say I didn’t have much experience in tech before becoming the CEO of the Austin Technology Council is an understatement. To be quite frank, I had never worked in tech. Thankfully, however, I was qualified. My work experience ranged from banking, to business and marketing. But what I really believe made my work at the Austin Technology Council so transformative was something I learned growing up in Illinois: grit.

Unlike many of my peers in the technology sector, I spent my formative years working on my family’s farm in Central Illinois. The Midwest invented grit. It was an inherent part of the culture and everyday life to wake up at the crack of dawn, work your tail off, overcome setbacks (perhaps the greatest skill) and wake up to do it all over again. Midwesterners are natural-born optimists.

So when we lost our family farm during the 1980’s economic recession, I learned on a whole new level what it meant to persevere, to adapt, and to pick up the pieces and carry on. Midwesterners are born entrepreneurs — a topic we’ll be exploring in great depth in the months to come.

When I started at the ATC, our organization was going through a fairly significant shift. It was clear Austin’s economy had a growing strength in the tech industry, and it would only make sense that an organization like the ATC, designed to connect tech leaders and resources, would be part of that growth. That was not the case, however. It was my curiosity about the ATC’s struggle to gain a foothold in Austin’s tech scene that lead me to take the job as CEO. That curiosity, and my Midwestern work ethic and perseverance, lead to our success in turning around the organization. More importantly, we worked alongside other key influencers to create a real impact on Austin.

How does this relate to our current economic development across the country? Specifically, what can we learn from the tech landscape in Austin and the transformation of the ATC? These are questions that stick with me as I continue my work with tech leaders and innovators across America. Stay tuned here to learn more about what I believe will be the next American Renaissance — a resurgence of the Middle American entrepreneurial economy.