A new wave of entrepreneurship is taking hold in communities across the U.S. and outside of traditional startup hubs like Silicon Valley, New York City and Boston.
Successful startups like Waitr, the Louisiana-based technology-driven restaurant delivery brand that was acquired in May in a $308 million deal, have managed to attract both capital and customers far from the usual hotbeds for technology companies.
The trend is only beginning, argues Alice Loy, co-founder of Creative Startups and author of the new book “Creative Economy Entrepreneurs: From Startup to Success: How Startups in the Creative Industries are Transforming the Global Economy.”
Loy shared some insights into why startups are popping up across the country and how communities can attract and cultivate these companies, which have the potential to reshape a region’s economy.
Loy says smaller communities can make themselves more attractive to entrepreneurs by emphasizing the attributes they offer that appeal to millennials, including connectedness, culture, the outdoors, great food and authentic experiences.
As an example, she cites two creative entrepreneurs in Canada — chef Mandel Hitzer and architect Joe Kalturnyk, who created a temporary tasting room on a frozen river during the coldest months Winnipeg has to offer. They have since expanded their Raw:Almond idea into an annual festival, which has spread to multiple locations around the world. Loy says their passion and embrace of the city’s sub-zero identity led to a cultural event that has brought young residents to the city, attracted by its authenticity and connectedness.
“Creative entrepreneurs — with their diverse, innovative storytelling products and services — help communities capitalize on the branding of their heritage and present a golden ticket to the future,” she says.
Loy says communities can help kick-start a creative tech entrepreneur ecosystem by focusing on attracting entrepreneurial talent from cities where costs have become so high that startups can’t get a toehold. “Start with entrepreneurial talent and the investors will follow,” she says.
Loy says that when communities consider how to support the creation of new technology businesses and create thriving entrepreneurial ecosystems, it helps to take a step back and expand what they mean by “technology.” She notes that all sorts of products we use every day are based on innovative technologies that aren’t necessarily inside a computer or mobile device.
“Your Yeti mug has technological advances built in,” she says. “Your smart luggage, high-tech outerwear and organically farmed tomatoes are all created with technology somewhere in the value chain.”
She says smaller communities can also attract businesses that naturally thrive in their region due to cultural, natural or civic assets. For example, she says Winnipeg now attracts companies like Boeing to test equipment in below-freezing temperatures, which has in turn prompted a wave of new startups related to aerospace. And Missoula, Montana, has become a hotbed of small online publishing companies related to the outdoors — which in turn has drawn startups related to digital media, photography and videography.
Investors have taken note of the proliferation of successful startups outside traditional tech hubs, most notably AOL founder and mega-investor Steve Case, who has spearheaded the Rise of the Rest seed fund. Case has been perhaps the most vocal advocate for the idea that the most compelling investment opportunities in the coming years will likely emerge from startups throughout the nation.
Loy points to Case’s recent investment in Mixtroz, a business networking tech startup that relocated to Birmingham, Alabama, from Nashville, Tennessee. She says the mother-daughter founders are a perfect example of creatives who sought a more connected community with a smaller-city vibe.
“[Case] is visionary and is spot-on in seeing the potential of smaller cities: They are affordable, navigable and accessible,” she says. “Entrepreneurs need to move fast and gather resources — human, capital, social — fast. Smaller cities make this easier.”
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