Venture Beat's In 5 years, the Midwest will have more startups than Silicon Valley covers one of my favorite trends - the rise of the Midwest as a source of tech startups.
The author of the article is a partner at Drive Capital, a VC firm based in Columbus, Ohio.
They feel pretty strongly that tech entrepreneurs should consider a Midwest location for their startups.
Key quote from the article:
"We also believe that if you are an entrepreneur with a fledgling company in 2016, you are an idiot if you don’t consider building it in the Midwest."
What makes this statement more compelling is the fact that the founders of Drive are former partners at Sequoia, the elite Silicon Valley VC firm. Like many others, Drive's founders fled Silicon Valley in search of new opportunities.
Key quote from their website:
"The Midwest is the opportunity of our lifetime."
This is in large part due to the size of the Midwest's economy coupled with how little attention the region gets from VCs. Again from the Venture Beat article:
California is the eighth largest economy in the world. The Midwest is the fifth. The Midwest is also bigger than Brazil, Russia, and India, each of which had recently caught many a venture capitalist’s eye.
The Midwest receives 25 percent of all research dollars in America and graduates more computer science degrees than any other region or country on planet earth. There are gobs of tech exits at valuations just as large as other places, and yet, the Midwest receives just four percent of the annual venture dollars in America.
I think there is a touch of hyperbole in this - China graduates a lot folks with computer science degrees - but the fact that Midwestern companies only attract 4% of America's VC dollars is pretty stunning.
The Midwest has a number of advantages as a place to start tech companies. Costs are much, much lower than in Silicon Valley, you can be closer to key customers and there's a lot of talent available.
Gallup also believes the Midwest is the most livable region in the U.S.
So we clearly agree with the folks at Drive Capital that the Midwest is an excellent place to start a tech company.