For years, I have seen people, mostly jealous governments, try to replicate Silicon Valley. Expressways have been named “Silicon something”, or “High Tech Highway”. Since I have started this blog, I have written about my disgust with trying to replicate what is going on in California. We can’t. We never will.
When we started Hyde Park Angels in 2007, one of the first things I was asked by virtually everyone was, “Is this like Silicon Valley?”. My answer was “No.”. However, one of the goals of Hyde Park Angels was to educate the midwest investor on what it was to be an angel. It didn’t compute here. If you remember programming with computer punch cards we’d call it an “endless do loop”.
Tomorrow along with a couple of friends that are on the same mission as myself, we are doing a lunch at the Union League Club. Tickets are still available, but we have 200 or more people signed up. That wouldn’t have happened back in 2007. The fact that we are doing this event at the Union League Club is amazing. One of my goals when starting HPA was to spread the word through the club community of Chicago. It was a target market of ours. We have come a long way in Chicago, but we have a long way to go.
Yesterday, my wife came across Brad Feld’s post on this same topic. He has a bigger bully pulpit than myself, so I am glad he is writing about it too. It needs to be said. It is time for us to lead the horse to water and see if it drinks.
I am in the process of knitting the midwest together. There are many ways to get this done, and I have a few ideas. Last week, I was in Nebraska and I didn’t fly over there, I drove. Nebraska, Iowa, Michigan, Minnesota, Indiana, Ohio, Wisconsin and yes, Chicago, Illinois are all fly over country to people on the coasts. For me, it’s drive over country and I try to drive to places and meet as many people as I can. There is a spark here, but it needs a lot of help to become a prairie fire. And it will not be Prairie Silicon.
Here is a hint on building a great start up community around your city. Figure out why that city exists in the first place. What’s the core business DNA around it? My good friend Paul Hilliard recently sent me a book by another mutual friend, Don Miller. It’s a fascinating read. I am learning a lot. For example, the Chicago machine political system wasn’t invented in the 20th century. It was invented back in 1830 by William Ogden.
Chicago exists for a reason. The first being the canal dug by immigrant labor. The second because of the railroads and the Chicago Board of Trade. Being able to warehouse grain, and get a warehouse receipt, was a huge leap forward in agribusiness. But, it’s not just Chicago. All the other cities in the midwest exist for a reason. From Omaha to Cleveland, there is a core DNA that can be leveraged to create an entrepreneurial community. The trick is finding the right way to position it so it can explode.
Midwesterners are pragmatic. We don’t like to pound our chests and talk about success, and we don’t like to talk about failure either. Failing is tough. But if you are going to create an economic engine that relies on entrepreneurship, you better be prepared for a lot of failure. The key is to learn from it, pivot, and keep at it. That’s why the Lean Start Up mentality is so good for the midwest.
Many midwesterners will be too conservative and say things like, “It’s not proven.”. Or, “There isn’t a track record.”. Sometimes you have to go with your gut. When you are blazing trails in places that no one has really gone before, there isn’t a clear path to success. It’s a lot of trial and error.
Have the courage to try and fail. Talk to people. Tell them what you are doing. To the folks on the coasts, you might want to parachute in and rent a car. Driving around the midwest will give you a better idea of the mentality here than flying from point to point.
One thing I neglected to mention is the midwest is full of Private Equity investors. Angel funding and seed stage investing is NOT private equity. It’s not anywhere close. The networks are different, calculations to value a company different, and the vision/perspective is far different. That’s for another post.