News cycles have not been good for tech talents in the Heartland lately. Amazon's choice of New York and Arlington for its new headquarters sparked many food for thought that plunged into the quality and quantity of tech talents between the shores.
However, whatever problems their tech companies are holding back (and access to talent is one of them) Many of Heartland's emerging tech hubs have seen sizeable growth rates for investors. And Amazon has selected Nashville for its Operations Center of Excellence, an investment of more than $ 230 million expected to generate 5,000 high-paying full-time jobs.
"My first visit to Nashville was last May," Monique Villa said. She fell in love almost immediately, decided to leave Los Angeles, and found ModernCapital, a VC-focused company in the southeast. "It felt like home."
Would Villa have felt at home in Nashville if Amazon had already been there? The influence of such a large company could repress the cultural uniqueness of a city of this size ̵
It's time to talk about the value of culture.
Culture attracts talent, drives growth
This year, Powderkeg launched the US Tech Census Initiative, a research initiative aimed at meeting the challenges and opportunities of emerging tech hubs between shorelines. The project surveyed more than 1,000 entrepreneurs, investors and technical experts in eight cities: Boulder, Chattanooga, Cincinnati, Denver, Indianapolis, Knoxville, Memphis and Nashville. Looking at these markets, two trends are striking.
First, all have growth rates that are worthy of VC dollars. For example, the 33 Cincinnati SaaS startups interviewed show an average annual recurrent turnover (ARR) growth rate of an average of 100 percent, averaging 110 percent.
Second, tech talent attaches importance to the corporate culture. The startups, which achieve high growth rates, recognize this and attach great importance to the creation of exciting working cultures. Meanwhile, culture continues to create liabilities for coastal companies.
"[Diversity and inclusion] is missing in Silicon Valley tremendously," said Courtney "Coko" Eason, founder and CEO of Milk the Moment, Nashville. "I think these tech hubs are emerging in other places so you can create your own culture."
Think about it for talent. Would you rather go to Silicon Valley and fight the entrenched Brogrammer culture, or would you rather go somewhere else and help build a community culture from scratch?
The data shows that the talent wants the last. The corporate culture is the most important reason why the tech experts interviewed choose their employer. This corresponds to an average of 27 percent of all answers in all US Tech Census Markets. The passion for the product or service follows closely behind. The compensation was never higher than the third.
This makes cultural innovation a breeze, especially when recruiting and attrition costs can exceed a medium-sized launch round. According to LinkedIn, technology has the highest sales of all industries with 13.2 percent.
So is it as easy as investing in culture, and tech talents are coming? Not exactly.
How can technology companies build a magnetic work culture?
The transformation of the Rust Belt into the Robot Belt is not accidental. Also, the rise of logistics software companies in Chattanooga or of marketing tech startups in Indianapolis after the acquisition of ExactTarget by Salesforce is not over. To see a pattern?
The companies in these emerging tech hubs are playing to their strengths, using not only existing industries, but also what makes their cities culturally unique. This makes it much easier for community resources to emerge and roam around their local tech ecosystems.
In each market surveyed, most of the tech workforce grew and attended a college outside the state. More than 70 percent of Denver respondents and 60 percent of Boulder respondents have grown up and / or attended college outside Colorado. What attracted you?
A local technology culture that prioritizes the work-life balance. This speaks for the work of local organizations to showcase how the marginal spirit of Denver and Boulder, and the love of nature, flow into the tech community. The same thing happens in Memphis, where many see technical entrepreneurship as a natural evolution of the city's creative energy.
"When you think about Memphis, think about music," says Gebre Waddell, CEO of Memphis & # 39; Soundways. "We have found a way to turn the creative energy into technology in our city, which was the birth of [blues, soul, and rock n’ roll]. You can see it in the UI, in the UX.
The Beginning of a Talent Boomerang
Today's technical experts recognize that they have something they did not have before: options
People who have left Heartland to start their business Career at the The West Coast is starting to come back, and those who have never considered the Heartland are looking at business opportunities that are worth pursuing.
"We see first boomerang for executives," says Charlie Key, CEO of Cincinnati-based Losant. "These people go to the coast, collect experiences and then return. There are people who can create products and companies that can compete in any part of the world. "
In each market surveyed by the Tech Census, low cost of living and low business costs were a key factor in attracting talent and founders. But cheap options usually do not win by themselves.
Capital and Talent: What follows?
Not far from Cincinnati, several experienced Silicon Valley investors have created Drive Capital in Columbus and see the opportunity for a lifetime in the Midwest. "Monique Villa felt the same way in the Southeast with the founding of ModernCapital in Nashville.
" At the macro level, we see this great shift in which talent becomes the strongest magnet between capital and talent, says Villa. "Traditionally, we've seen talent follow capital, and now we see talents as talents. I think that's why people are going to build businesses everywhere. "That's great news for the Heartland. Those who do their best near the Blue Ridge Mountains or the Great Lakes should not choose between New York or Silicon Valley. And investors seem to agree. The more emerging tech hubs embrace their local culture, the more talents they attract and the more investors will bring their presence (not just their dollars) to the heartland.
Matt Hunckler is the CEO of Powderkeg, a connectivity engine for startups between the coasts.