There are two prevailing perceptions about innovation and start-ups: first, they are all tech driven, and second, they originate from just a few regions — chief among them, Silicon Valley. I’ve seen firsthand that innovation can happen anywhere, and that it is accelerating in places that typically don’t grab headlines. And I have met hundreds of entrepreneurs living in cities in “flyover country” that are building great companies and creating jobs in a wide range of industries.
Entrepreneurs in these regions are innovating in ways specific to the economic heritage of their region. While many Silicon Valley entrepreneurs (and investors) have a “hits” mentality — if they don’t strike it rich quickly they often quit and move on to the next thing — the Midwestern work ethic leads to a more patient approach. This approach should bode well in the third wave of the Internet, where patience, perseverance and partnerships will play more of a role. We’ve already seen some huge companies in the heartland built this way: e-mail giant ExactTarget in Indianapolis, social shopping’s Groupon in Chicago, yogurt power Chobani in upstate New York, and fast casual dining king Chipotle in Denver.
In this next wave we will see revolutions in health, education, energy, and food — but they’ll likely happen in evolutionary ways. The African proverb “If you want to go quickly, go alone — but if you want to go far, you must go together” will animate the next phase of innovation, and that will play to the strengths of the “Rise Of The Rest” entrepreneurs.
It’s worth remembering that 250 years ago America itself was a start-up. It was just an idea. Now we have the premiere economy and lead the world. That didn’t happen by accident. It was the work of entrepreneurs who led the agricultural revolution, then the Industrial Revolution, and more recently the technology revolution. In the process, they built America — and built some of America’s greatest cities. Now we’re seeing these “rust belt” cities reemerge as vibrant innovation hubs.
Over the next decade, innovation and investment will accelerate in “flyover country” for five reasons:
- Advancements in technology are enabling start-ups to take shape for a fraction of the cost it took just a decade ago.
- Increased mobility enables “Rise of the Rest” start-ups to more easily attract talent — often by luring people back to Midwestern cities for lifestyle reasons, and by tapping into expertise all across the world via by leveraging networks.
- Lower cost of living enables investment capital and paychecks to go much further. The major start-up expenses such as salaries and office space cost less, and the cost of living is considerably lower for employees.
- Local support is building with the creation of accelerators and greater engagement from the leading local companies, universities, and government officials.
- Greater access to capital is making it easier for companies to start and scale. Local angel investors are emerging to back start-ups and strengthen their communities. Crowdfunding is widening the circle and enabling entrepreneurs to reach national investors. And venture capitalists in California and New York are starting to pay more attention to what is happening in the other 48 states.
It is great to see the momentum now building around start-ups in “off the beaten track” places. Silicon Valley will remain the pride of America and the envy of the world, but what’s happening in places all across the country is striking. I saw this firsthand when I traveled the country as chair of the Startup America Partnership, and more recently as we launched our Rise of the Rest road trip with visits to Detroit, Pittsburgh, Cincinnati and Nashville. Next month we’ll hit the road again, visiting Madison, Minneapolis, Des Moines, Kansas City and St. Louis.
The start-up momentum in these cities helps drive growth and job creation — and also funds the services that a thriving community needs. But the story at play here is bigger than that. In order for America to remain the leader of the free world, it must have the largest and most robust economy — and that requires that it continue to be the most innovative and entrepreneurial nation. That will enable us to maintain our global lead — but also enable us to grow our economy faster, and create more jobs — particularly good middle class jobs.
To achieve this, we can’t rely on just a few region — we need all 50 states to support start-ups, so we will have a broadly dispersed innovation economy. That means civic leaders and business leaders (even in major companies) and citizens in cities and towns across the country need to get involved. They need to support the agenda of connecting colleges to communities; of building great STEM programs in our schools; of passing comprehensive immigration reform.
Large companies can source contracts to local start-ups to give them a chance; local authorities can help site and support accelerators. Everyone can help create and celebrate a start-up culture in their community.
The entrepreneurs in “flyover country” are gaining momentum. The rest is indeed rising. But there’s still more to be done — so let’s all do what we can to startup America.
Case is chairman and CEO of Revolution, a D.C. based venture capital firm, co-founder of AOL, chairman of Up Global, a member of the President’s Ambassadors for Global Entrepreneurship and chairman of the Case Foundation.