Your business will grow where you water it. Dan Murray, who owns a tech business in the Midwest, explains how he expanded his company.
I've started and grown six hyper-growth tech businesses – including two that have IPO'd – where I grew up in Ames, Iowa. And if you think that sounds unbelievable today, you should have heard the responses when I told people I was building another company in a small town in the Midwest a decade ago.
At that time, I heard a lot of jokes about farmers and flyover country, but the truth was, venture capitalists largely stuck to the coasts. My company didn't get much interest from professional investors until we'd been operating for several years and had nearly $100 million in revenue.
But things have changed. My current company, Vertex, is just one year old and 57 people strong, and I get at least five unsolicited emails a week from some of the biggest investors in the world. Interest from venture capitals in the Midwest and other nontraditional tech environments is spiking, and some of the most innovative and promising businesses are developing far away from the usual tech hubs.
Mentoring is great; building is better
That didn't happen by accident. A lot of great local organizations have been consciously trying to grow the startup ecosystem here. Accelerators and incubators like Global Insurance Accelerator, the ISU Startup Factory and the Iowa Startup Accelerator in Cedar Rapids all play an important role. I've worked with many of these organizations as an informal mentor and advisor when asked.
But the best way to foster tech success in your region is to build cutting-edge tech companies and attract smart people to the area to help you do it. At Vertex, 20 percent of our workforce has been recruited from out of state. We've attracted people from Silicon Valley, Boston, Chicago and Houston with the promise of working with bleeding-edge tech and a product that will be an industry game-changer. Relocating, I hope, will be great for their careers, but also for Iowa's tech ecosystem.
At my past business, Workiva, I recruited a talented employee from Microsoft. He picked up and moved with his young family from Seattle to Iowa. Six months later, he asked to meet for a coffee. "Dan," he told me, "I am so glad that you convinced me to come here. The people here are nice. The cost of living is low. There are so many things to do. Seattle's a great place, but Ames is the best-kept secret in the country."
I was happy his family got to take advantage of everything Iowa has to offer – the great quality of life and excellent schools – but highly skilled and compensated people like this engineer discovering our region is also great for our community.
Growing the next generation of entrepreneurs
Not only does building businesses attract intellectual capital to the area, it also builds it among native workers, giving employees from both far away and the next town over a chance to see up close how a hyper-growth business is built. There's cross-pollination of ideas between newcomers and locals, and a new generation of leadership learns the ropes of how to create and grow an early-stage business.
My hope is that building my businesses in my hometown and being conscious about hiring employees who want to put down roots here will help people learn enough about scaling a business to do it themselves one day, right here in Iowa.
I remain involved in mentoring and investing in early-stage businesses, but when I really look at it, the best way to foster tech success in a nontraditional tech environment is to get out and build a tech company. The startup bug is contagious, and if you gather great talent and keep them close, some of them are sure to catch it.
Edited for brevity and clarity by Sammi Caramela.