Many of my closest friends in the Twin Cities metro tech community ask me for my perspective of what it is like to build a tech business in greater Minnesota.
Founding W3i eleven years ago in St. Cloud has certainly had its advantages and disadvantages. Rather than answering this question solely based on my experiences alone, I interviewed several other greater Minnesota tech entrepreneurs for their feedback on this subject.
With so much thoughtful input, I decided to answer this question in a three post series: the first post will focus on advantages, followed by a second post on disadvantages and the third and final will focus on how the Twin Cities tech community can support greater Minnesota tech hubs — and vice versa.
Part I: The advantages of starting and growing a tech company in greater Minnesota.
The most frequent advantage mentioned? Hiring & retaining talent.
Many areas outside of the Twin Cities are home to Minnesota colleges and universities that lend themselves to proactive recruiting — something that we have taken advantage of in the past.
Gordy Meyer, President and CEO of St.Cloud-based eBureau, mentioned there is “less competition for tech employees resulting in better employee retention and lower cost of talent.” Wade Beavers, CEO of DoApp in Rochester, says tech companies outside of the Twin Cities “tend to attract people who want to live in the community that your business is in and they seem to have a sense of wanting to stay for longevity. It keeps attrition low.”
Another advantage is lower operating expenses like rent and salary, considering that money goes further where cost of living is lower. Less commuting time and more open space can also relate to levels of employee satisfaction over long periods of time.
For independent contractors it may be easier to get the business off the ground due to less competition. According to Cris Weber, owner of CVW3 Design in Brainerd, “It can be a lot easier to get on your feet when there’s not dozens of people in town who do what you do.”
Justin Wampach found that relationship building with business leaders is easier and has its advantages. “There is less competition when it comes to finding local investment dollars,” says the President/CEO of St. Cloud’s Adjuvant Technologies.
Scott Bergs, former COO of Mankato-based Midwest Wireless which sold in 2005 to Alltel for $1.08 billion, had this to say:
“I believe that it enhanced our ability to build strong relationships with key community stakeholders and educational institutions that enhanced our talent/recruitment efforts, enabled us to develop creative solutions in collaboration with MSU, Mayo Health Systems, City of Mankato, Regional Economic Development groups, etc. These relationships in turn, enhanced our ability to build a dynamic organization capable of making necessary business changes (to retain our competitive advantage and react to the market) very quickly. Likewise, these relationships often lead to loyal key customers, which further enhanced our credibility in all of the markets we served; yielding greater penetration.”
“With the web and all the tools available, physical location is not as important. We are currently doing business in nine countries via web, Skype, etc.” states Bruce Hagberg, CEO at St. Cloud-based RTE Inc.
Personally, I think an advantage to being located outside of a larger tech community in MSP is the avoidance of the “echo chamber” group think that can become pervasive. This refers to the tendency to lose touch with the average user or customer when surrounded only by a dense concentration of technologists or early adopters. “Usually much more prominent in tech meccas such as Silicon Valley, but can apply here to” adds Zach Garbow, Y-Combinator grad and Co-founder of Rochester startup Funeral Innovations.
There can be advantages to starting and growing a tech company in greater Minnesota —less competition for tech employees and less attrition, lower overhead, easier relationship building and less of a hive mind — but there are several disadvantages, to be covered in part II. Leave a comment if you are starting and growing outside the Twin Cities Metro, I’d love to hear your thoughts on this series.