Startup founders throughout the Midwest are doing something new: staying

https://story.californiasunday.com/indianapolis-tech

by prostoalex • 8 years ago

289 187 8 years ago

story.californiasunday.com

carrja99• 8 years ago

No.

munk-a• 8 years ago

Seconded.

jonathankoren2• 8 years ago

sure Silicon Valley sucks from a housing stand point, and you’d think that you can fire up an AWS instance from anywhere, and you can. However SV has one thing no place else has, a density of talent and capital unrivaled in the world. That’s why it continues to exist.

Compare it to Hollywood. Sure you can make movies anywhere, but you don’t.

https://www.scientificamerican.com/article/why-silicon-valle...

majormajor2• 8 years ago

You do "make" movies anywhere (well, a few places: Atlanta, Vancouver, etc).

But so far the companies, business, and performers are still based in Hollywood.

Question is: after a distributed generation or two, does that still hold as a natural law?

ghaff• 8 years ago

Not so much a natural law but definitely a natural tendency for a lots of types of businesses to cluster. It's probably particularly pronounced in industries where there is a lot of in-person deal making, "power lunches," etc. (Which is one of the reasons why traditional publishing tends to be pretty centralized as well.)

As you say, actual filming has become somewhat more distributed though that is somewhat constrained by the whole ecosystem of associated trades that are needed to setup and do filming.

acchow• 8 years ago

You usually need to get a ton of people physically together to shoot a scene.

Programming isn't like this.

sedachv3• 8 years ago

Not only that, but smaller, non-union productions also do everything at the last minute. This is possible in Los Angeles, where there is enough work to go around to support a lot of people in all the specialties - you can call your contacts and someone will be available. Getting custom props or set design on an 8 hours' notice is possible. Only larger projects can afford to have all of the production requirements planned in advance, something that you need if you are planning to film somewhere without a well-established film industry.

wpietri6• 8 years ago

Hollywood's not a great example. Their centrality to the movie industry has been declining for decades. E.g.: https://www.thewrap.com/louisiana-california-movie-making-ca...

Or an article from this year listing LA as the 3rd-best place, after Atlanta and Vancouver, for moviemakers to live: https://www.moviemaker.com/archives/best_of/best-places-to-l...

One important factor at work here is the Internet. Effects companies, for example, are all over the place, including London, New Zealand, Vancouver, LA, and even here in San Francisco. Big movies will often use multiple companies, something that would have been very challenging 30 years ago.

Silicon Valley does have capital and talent. But it's not like that capital is in doubloons in a vault. It's purely digital. A big reason it's not more mobile is that VCs wouldn't deign to stop in a flyover state. Talent isn't quite as mobile, but a) advances in technology mean talent is less necessary, and b) the rise in remote work means the location of talent is less and less meaningful.

jrs95• 8 years ago

The talent is also considerably more expensive and not substantially better unless you need people in a specific niche. And if you really need talent from SF, you could always hire them on remotely.

mixmastamyk6• 8 years ago

Much of this is due to unfair tax credits in various areas. And instead of competing, the geniuses in Cal/LA have been raising taxes.

ashwinaj• 8 years ago

Well put! Instead of downvoting the authors comment, take a moment and think about it...

The same analogy can be made for NYC with the finance industry.

sdca• 8 years ago

a density of talent and capital unrivaled in the world

The Four Asian Tigers have already surpassed SV on that. There's obviously a government-related cultural gap that won't win them any popularity contests.

delecti• 8 years ago

I would posit that the overwhelming majority of startups don't require "unrivaled density of talent". Most computing problems just need a decent availability of moderately competent engineers. Additionally, locating elsewhere reduces the need for such an abundance of capital.

jonathankoren2• 8 years ago

The density isn't just about how much talent and capital you can get, it's about how easy it is to get talent and capital.

Erlangolem• 8 years ago

Silicon Valley needs tech, not the other way around. Tech needs investment though, and often flocks to where the money is. Right a lot of people are throwing a lot of money around Silicon Valley, so a lot of tech (or bullshit masquerading as tech) lives there.

wpietri6• 8 years ago

To me this is heartening in a variety of ways.

One is that we're finally making good on the promise of the Internet. The hype was that it made location irrelevant. And it did for a lot of things. But somehow VC-backed web and companies were immune to that, even though money and software are both digital.

Two is that this is great news for founders everywhere. Before they often had to choose between family and success. Now they can have both. (That didn't matter to me much when I was 25, but now it's easier to see costs of that.)

Three, I think this is great for customers and users. A frequent and frequently valid critique of Silicon Valley startups is that many only make sense in our hothouse atmosphere. E.g., Juicero. There are real-world needs out there that we're missing because we don't see and spend time with the people who have those needs.

Four, I believe that this is good news for both our cities and our startup community. The flood of money has driven up prices just like it did during the gold rush era. That's certainly a problem for people outside of tech. But I think it's also bad for entrepreneurs: it keeps getting more expensive to build a team and a company here. Turning down the heat a little will make it easier for us all to succeed without having to take gobs of money.

zitterbewegung• 8 years ago

Why Silicon Valley is effective at startups is because the insitutions and people that can help you have already formed and there are strong networks and resources to get stuff done. Sure some jobs can be done remotely but being face to face with both talent and VC is still something important. A bunch of these articles pop up with this premise but it mainly is an advertisement for local cities or other places in reality.

dogerjoe• 8 years ago

To add on, none of these articles seem to talk about the racial diversity in the Midwest. Yes, there is a problem with diversity in Silicon Valley and tech in general, but the West and East Coast seem to advertise themselves to be friendly towards immigrants whereas this and many other articles seem to only gear towards White (and maybe Indian, but it seems to be execs not engineers) as shown in the pictures.

Edit: I mean that it's curious that the Midwest never seems to advertise toward immigrants or minorities in tech. What motivates minorities to move to the Midwest if it seems the culture doesn't seem to support racial integration?

freehunter• 8 years ago

I would be very interested if there are statistics to back up the idea that Silicon Valley startups are more successful than startups created elsewhere. I guess that would also mean defining what "successful" actually means.

s73v3r_• 8 years ago

Is it? Or has it always been that the VCs preferred it that way, and so that's how it went?

jt2190• 8 years ago

The hype was that [the internet] made location irrelevant. And it did for a lot of things. But somehow VC-backed web and companies were immune to that, even though money and software are both digital.

montrose did a good job of summarizing a recent Wall Street Journal article ("Why Cities Boom While Towns Struggle", March 13, 2018) about this very phenomenon: https://news.ycombinator.com/item?id=16611042

To summarize his summary:

[R]emote exchanges of ideas are no substitute for the elemental human process of face-to-face communication. Innovators don’t do their work in isolation; they stimulate one another. -- Enrico Moretti

edit: Here's a link to a non-paywalled interview with Mr. Moretti about his book, "The New Geography of Jobs" (2012): https://www.gsb.stanford.edu/insights/enrico-moretti-geograp...

aaron-lebo5• 8 years ago

[R]emote exchanges of ideas are no substitute for the elemental human process of face-to-face communication. Innovators don’t do their work in isolation; they stimulate one another.

Historically, many have. And today, when you can ping almost anyone in the world, it's not an obstacle. Not to mention, most big cities have a research university (if not multiple). Nobody is lacking for input. The claim about "elemental" processes isn't based on anything concrete. I work in multiple remote teams and it's never been an issue. We get more work done than if we had to see each other every day.

That's hardly an endorsement for SV alone unless SV has all the talent in the world (it doesn't). I think your post and some of the other posts advocating for SV have knowingly or not accepted a belief about how things work, but they are essentially mythologies.

Some work as loners, some work in groups. The biggest mythology of all is that it takes hundreds of millions in funding and unethical behavior to build cool stuff - it doesn't. That seems to be the SV way, many of us don't want that.

wpietri6• 8 years ago

I agree that innovators don't do their work in isolation. But I only partly agree that matters much in software.

Where I think it does matter is within the context of a company. There's still nothing better for innovation than getting the necessary people in together in a room. The high-bandwidth, low-latency collaboration enables creativity in a way that digital tools can't currently replicate.

But I think it matters less and less between software companies. Contrast it with physical manufacturing, where there's a real benefit being near your suppliers: you can show each other parts, work out issues, visit back and forth.

But in software, cross-company collaboration is almost all digital regardless. We don't know where our servers are. We don't know where our vendors' servers are either. Even if our offices are in the same city, we'll probably work out technical issues via digital means. I was just building something with Twilio, for example. They're blocks away, but I would never think about visiting them if I needed to talk with someone there.

AFNobody• 8 years ago

They are not but ultimately, a farmer's problems are best solved by interacting with the farmer...not suburban SF techies.

People still need to meet but it doesn't mean every company needs to be in the same city for one industry.

dpweb• 8 years ago

Technologists dont need proximity as much as investment bankers do.

jordanbrown• 8 years ago

Amen!

specialist• 8 years ago

Small, young businesses are the (significant) job creators, grow the economy.

This isn't rocket science:

Nationwide broadband, Medicare for All, strong coffee, ready access to capital (eg SBA, grants).

Boom. Economic miracle.

Extra credit:

Then increase teacher pay to attract young families. Because families absolutely do relocate to choose better school districts. (Teacher pay mostly means cutting out all the middle men, waste. May mean more funding for schools in some areas.)

Lastly, subsidize child care, elder care. So people don't have to choose between family and work.

Oh, obvious afterthought, sorry:

Debt jubilee on all student loans. Pay for everyone's education going forward.

cirgue• 8 years ago

Silicon Valley has a radically different viewpoint and set of priorities than the rest of the world. This discrepancy still has not been exploited to anywhere near its full potential.

Edit: To clarify, I think SV is increasingly insular, and there is untapped innovative potential outside the bubble.

IAmEveryone• 8 years ago

The singular success of SV might point to some of its values being linked to its success. “Correlation is not causation” doesn’t even apply, because regardless of causality (a->b, b->a, or even x->a && b) it would seem that it’s difficult to have one without the other.

It’s also important to note that the high reaches of other creative industries espouse values very similar to those of The Valley.

jerf• 8 years ago

Times change. The "SV values" of 40 years ago are noticeably different than the ones of today. Heck there's been a pretty noticeable shift even in the past 5 years. If SV did have the right values for success 20 years ago, I'd at least put out the suggestion that that opens the possibility that it doesn't have the success values today.

asabjorn• 8 years ago

It might also mean that the hard work of the people creating interesting things has not yet been outweighed by other negative factors in its environment. The old school hacker culture is very contrarian to the current dominant SV viewpoint due it’s nerdiness and focus on what you can create above all other values.

arthurcolle2• 8 years ago

Apologies for the tangent - I have never been to the bay area, but I am frequently reminded many times when I meet a “pure tech company” ala google, msft, amzn, fb software engineer (I’m only 3 years out of school, studied CS) of this self-righteous and condescending narcissism that I haven’t seen repeated across other workers in other industries and a kind of deep sense of self-congratulatory entitlement. It is a little bit akin to what you see with Ivy League students -> Banks/Mgmt Consulting, but infinitely more detestable given how flippant toward the rest of the world the tech attitudes can be.

Silicon valley is obviously the new wall street in terms of attracting the big brains and bringing a focused collection of hard working or brilliant individuals - yeah, we need the infrastructure to make the world spin faster but it can really bring out the worst and most myopic visions even from the “best and brightest”. I like automation and disruption, purely for its own sake, because we can. But the hyperaccumulation of wealth driven entirely by advertising is absurd and is effectively non-productive and I hope more people refuse to take classical VC funding and instead opt for organic growth and/or pure public raises. The only reason a web app development company (basically all these startups) that is 6 months old needs 5 million bucks is to create a legal fiction that from its inception is designed to create liquidation events that make VCs extremely wealthy, done in a way that gives the impression of “risk taking” without any real risk being taken because of the ability to create unicorns from deliberate successive raises - all of these entities exist within the same monoculture, with huge overlap in board of directors and investor groups.

I think that ICO related innovations can help in potentially mitigating the development and solidication of this monoculture as we have seen in Wall Street, but unfortunately the criminality of some of the newer players in this field is staggering and equally disappointing

Tech almost certainly doesn’t need Silicon Valley and a decoupling of peoples thinking in those terms will be very useful step in the right direction

aaron-lebo5• 8 years ago

There's a lot of truth to what you say, but you are preaching to the wrong audience.

sneak• 8 years ago

It is very difficult to get a person to understand something when their salary depends on them not understanding it, or so the quote goes.

influx2• 8 years ago

What would Microsoft and Amazon have been without Silicon Valley?

irrational• 8 years ago

Do you mean because they are located in Seattle instead of Cali?

influx2• 8 years ago

yes :)

aaavl28212• 8 years ago

They also raised very little venture capital (Amazon did one round led by KPCB I think, Microsoft took only like $1M in venture money)

twblalock2• 8 years ago

I suspect that when Silicon Valley loses its dominance it will be to China, not to other parts of the United States.

gowld• 8 years ago

Does China export consumer webtech? The unique "Chinese characteristics" as they call it would seem to make it hard to export consumer services.

gaius• 8 years ago

No one knows if Chinese consumer sites/apps like Weibo, Tencent etc can compete in an open market. Maybe they can but if so, why hide behind the Great Firewall?

zachguo2• 8 years ago

Many Chinese tech companies are expanding overseas, just not much in North America, mostly in high growth areas in Asia. They also own and control many well-known mobile game studios. TBH, apps like Facebook and even Snapchat copied features from Chinese apps like Wechat and Alipay.

dangerbird2• 8 years ago

While China is well on its way to becoming a key player in fields like AI, by far the greatest thing preventing it from becoming the "next Silicon Valley" is censorship and protectionism of the Chinese government. The fact that online social platforms in China have to play by the CPC's rules makes it extremely difficult for a service to have both a mainland Chinese and international market. Places like the E.U. and large democracies like India have a huge competative advantage due to the fact that there are very few bureaucratic and political hurdles to get a business started.

chaostheory8• 8 years ago

It's not just censorship and protectionism. China is just too used to attempting to centralizing everything. There's a cost. The reason why is because central offices will eventually lack needed localized knowledge to make optimal decisions, resulting in inefficiency, less creativity, and slowdowns when it comes to changing in response to problems or other new conditions. It's a bit ironic that the country that revolutionalized guerilla warfare fails to see this.

seanmcdirmid• 8 years ago

China is the best place in the world to start a startup if...you are chinese focusing on the chinese market. China’s outright hostility to immigration and the lack of much international diversity means that it will necessarily be a closed system for the foreseeable future. That’s not even to mention the great firewall and still wicked pollution problems.

paulddraper• 8 years ago

As long as your product does not need to cross the great firewall, you might be right.

zachguo2• 8 years ago

It may not be China, but it's very likely somewhere in Asia. Asia Pacific market is huge, next billion middle-class will mostly be in Asia.

rdiddly• 8 years ago

Betting now that Peter Thiel's recent "move" is mentioned. Now off to read the article.

EDIT: Well I lost that one. It's about the Midwest. They did mention Thiel though, just not in that way.

EDIT 2: And now the title has been changed (an improvement), making me look like (more of) an EEEDIOT!

yesimahuman8• 8 years ago

The headline is clickbaity. The point isn't that Silicon Valley isn't a major force in tech or that other parts of the US will "beat" it. Rather, it's that you can build valuable tech companies outside of it, and that the Midwest in particular is ripe for more tech companies. I know first hand, I'm building my VC-backed (including coastal $) startup in Madison, and we've stayed put. I realized the pressures we felt to move early on were our own insecurities and the bias of tech/investor media (which I've noticed has changed recently, we're not seen as so crazy!)

I'm glad we stayed put, especially as we've started to focus on real revenue and scaling, and less on trying to be hot for the purposes of raising a big early round. I feel like the market for engineers around here is becoming an advantage for us, and we're not having to fight the same talent wars as those on the coasts. That matters.

dang2• 8 years ago

We changed the baity title to the less baity subtitle.

sidlls2• 8 years ago

Madison has a lower cost of living, but my experience there (working and looking for work), admittedly dated by half a decade, is that the variety and quality of engineering work pales in comparison to that available in bigger hubs. It's mostly very mundane work for one of the many insurers there, maybe Epic, etc. It's also generally very poorly compensated relatively.

yesimahuman8• 8 years ago

That’s a slightly ancillary point to mine. Regardless, a lot has changed in the last two years even (and we’ve had to raise salaries to compensate). It has a ways to go but I’d like to think we’re proof of the potential that is there today. (We didn’t even exist 5 years ago anyways!)

Also I’d like to think what we’re working on isn’t mundane!

driverdan• 8 years ago

That just means more opportunity to hire people for an interesting, funded startup.

seawlf• 8 years ago

Having just moved to SF from Madison, I have to say that the engineering competence of teams there is disappointing in comparison to the Bay Area. Not only that, but Madison companies really do not pay well at all. You can't expect to keep talent if you aren't paying for it.

yesimahuman8• 8 years ago

So far it’s working out and we’re excited about growing here. Our data says we’re competitive on compensation and I’m proud of our retention. I’m very happy about the level of our engineering talent and this team is building a successful product used around the world right here in Madison.

I’m sorry you didn’t have a great experience with your last team.

strictnein• 8 years ago

These seem like related complaints: low pay doesn't attract top talent. Most of the people looking for higher pay would likely go to Minneapolis or Chicago.

pascalxus2• 8 years ago

when you factor in the cost of housing in the bay area, I'd be willing to bet anywhere outside the bay area will compensate you much better.

This might not matter if you're a 20 year old deciding between renting a 8' room for 1500$ or 200$. But it most certainly will matter once your in your thirties with a family comparing buying the 3 million dollar crap whole in palo alto vs a nice decent house at 300K (in madison).

I think the best way to go is spend 5 years working in the bay area, save as much as you can. And then get OUT while you still can before you set down roots and meet someone.

aphextron• 8 years ago

I'm glad we stayed put, especially as we've started to focus on real revenue and scaling, and less on trying to be hot for the purposes of raising a big early round. I feel like the market for engineers around here is becoming an advantage for us, and we're not having to fight the same talent wars as those on the coasts. That matters.

Would you say there's any other advantage to your location besides being able to pay people less and having cheaper rent?

yesimahuman8• 8 years ago

Your question sounds pretty sarcastic, but yes, I do think we’re able to focus on building a big company and not getting caught up in the high burn, rocket ship or bust game that is dooming a lot of valley companies and resulting in many premature acquisitions (or worse). People think midwesterners think small, but I don’t relate to that.

aaavl28212• 8 years ago

The abundance of startup jobs and VCs in Silicon Valley is not matched anywhere else, and this makes quitting a stable job and working for a startup / starting a company a far less risky proposition than if you lived in an area where there were maybe 1-2 startups big enough to hire reliably. In those places people just don't make careers of working in startups because there aren't enough jobs / funding

That said, there are a lot of complicated industries where domain expertise trumps tech ability (healthcare is a prime example). Most successful health tech companies are not in CA (epic in Madison and cerner in Kansas City as two big examples). As more people learn to code I think there will be a growth in startups with relatively simple tech that is just well suited for the problem it addresses. Solutions that don't scale to millions of users / are not optimally performant but are designed by users can win in a lot of sectors

arca_vorago2• 8 years ago

I think this conversation is missing a big piece of what made SV in the first place. Namely, the military industrial congressional complex. I can't remember the author but he gave a good Google talk on the origins of SV from war engineering.

I think since the type of warfare of the future is largely informational, and governments are increasingly neo-fuedal and authoritarian, in the future SV will be seen as a base of operations of the enemy of tech. Not only does tech not need SV, but they are going to largely be at odds. SV will probably still have the highest concentration of VC to IPO cycles but the problem is so many of them aren't solving problems with products or services and are generally focused on how to turn customer data into an advertiser money pit while they angle for the IPO boom and exit (betraying users more and more the closer the exit is)

I'll tell you what tech does need though... non SV big money representation on the hill.

That said, there some good things in SV like the EFF, and I don't have much knowledge of the area other than riding my Harley up 1 to visit a friend a few times. I do know Pelosi is a a horrible authoritarian in democratic clothing and it surprises me SF hasn't gotten rid of her yet.

pfarrell• 8 years ago

Was it Steve Blank's "The Secret History of Silicon Valley"? https://www.youtube.com/watch?v=ZTC_RxWN_xo

arca_vorago2• 8 years ago

Indeed it is. Thank you.

One thing I forgot to mention is how bad, constitutionally speaking, NSL's and other pressures from the government are. We just don't know how prevalent it has become, perhaps the government is NSL strong-arming companies left and right at the moment... Which is why the legislation that enabled NSLs is unconstitutional imho.

EADGBE4• 8 years ago

But she was hesitant to move. She’d grown up in Northern Indiana and studied communications at DePauw University. She and her husband, a commercial real estate developer, had built a life for themselves and their two kids near the capital city.

This is an important aspect that I can't assume is only important to the Midwest, but something that I come across myself here, also in the Midwest.

Occasionally an over-enthusiastic recruiter will reach out about a relocation opportunity. I sometimes can't help but reply "No. I love it here." Much to what I assume is confusion.

We can still move fast and break things out here in Fly Over Country. And our salaries can afford us better opportunities in comparison. I think a lot of 'Coasters have a hard time even rationalizing that. No technology I've encountered is locked down to a location.

Spooky23• 8 years ago

It’s weird to me that the myth is that you need to be in the Valley... until you open your development center in Hyderabad.

tjr2254• 8 years ago

I dunno...I make a lot more out here on the coast...I graduated from school at the end of 2014 and I make 2.75x more than my first job offer out of school back in my home state of MI. The weather is a lot more mild and pleasant. There are also things on the coast that you simply can't get in flyover country- mountains, ocean, vast empty national parks, for instance...I swear it feels like I'm on vacation every other weekend. OTOH I don't really want to buy a house out here just because it's a daunting prospect but there are pros and cons to living and working in each area.

tannhauser23• 8 years ago

Yeah, when you are young SV makes a lot of sense. But once you start a family? It gets very tough to stay here, very tough.

closeparen• 8 years ago

mountains, ocean, vast empty national parks

None of which are relevant if San Francisco's transportation policy is effective and you go car-free.

EADGBE4• 8 years ago

I graduated from school at the end of 2014 and I make 2.75x more than my first job offer out of school back in my home state of MI

I started my first development job in 2013 and I'm making 2.4x more, now (without school). In comparison, (as you know) my cost of living is significantly cheaper.

I get where you're going, but just to give you more perspective...

Johnny5552• 8 years ago

We can still move fast and break things out here in Fly Over Country

But can you find an investor there that will fund you to spend 2 years breaking stuff with 50 engineers on staff and no revenue?

Some startups are much harder to launch outside of Silicon Valley where an investors are willing to make speculative investments on expensive ideas that may never pan out and where the investor can keep a close eye on his/her investment.

EADGBE4• 8 years ago

There are startups here; I've worked at one :).

It was cool at first, but annoying secondly as the product became an ever-moving target designed to fit an assumed goal the current pitch deck was tossed to.

I liked the swivel chairs, though.

Honestly there's probably more [startups] here, but I haven't looked since my second kid. As hinted in previous comments, it's really geared towards family here. If I didn't have one, I'd probably be elsewhere. Though - to be honest - I'd also probably not be in development, either.

danschumann2• 8 years ago

I live in Oshkosh, Wisconsin. We used to make kids clothes, now we make trucks(military trucks). I've been writing animation software for the past 2 years. I work 3 hours a day freelancing to pay the bills ( my rent is 540 / month for a 2 bedroom ). When the software is done, it could be a multi million dollar thing, but for now I'm living on beans and rice. It's quite a hard thing, quite giant project for one person to do. Hopefully I think it was all worth it, if and when I get through it.

dang2• 8 years ago

Good luck! I hope it works.

antoineMoPa• 8 years ago

I just hope for you that this software has something different from other existing software.

drb91• 8 years ago

Wow that rent though, a great place to live frugally. How is your health insurance (if you don’t mind my asking)?

danschumann2• 8 years ago

It's $500 a month but I pay $.16 after tax credit. (my income is pretty low due to only freelancing as little as possible)

pnutjam4• 8 years ago

In my experience, health insurance is no cheaper in the midwest, but you have lower quality care in many areas. Care can be especially difficult in rural areas.

For comparison, I pay about $600 / month for a High deductible plan that pays nothing until I pay $6k. This is through a company with about 300 employees. I'm in an urban area (Indy).

chaostheory8• 8 years ago

She was running into the same issue that Case had observed in other cities. It had been easy enough to scrounge up seed money and desk space in Indianapolis, but the venture capital she’d need to bring her company to scale was much harder to find locally.
Case acknowledged that the investment culture of Silicon Valley is unique. It “encourages fearlessness,” he said, “and that’s something to be admired.” It can also be difficult to replicate elsewhere.

This is one of the many things that keeps SV dominant. Unless this changes in the MidWest, things will stay the same. It will still be more beneficial for your company to move to California than stay if you need money. Investors in other parts of the country (and the world) are just less risk tolerant than California.

PhilipA4• 8 years ago

As a Danish company who a year ago moved to Minneapolis, I can tell you that there is hidden gold in the mid west.

Especially in Minneapolis there are tons of universities and cost of of living is much lower than the west coast. It makes it a lot easier to keep your employees once they want to start a family, something far too many companies neglect.

dsfyu404ed3• 8 years ago

Unless you want a bunch of people from CA to show up and ruin it you should stop bragging about how great it is.

Sincerely, Denver

twblalock2• 8 years ago

Yeah, that's the irony of other cities trying to compete with Silicon Valley. If a city succeeds at this and a lot of well-paid engineers move there, that city will end up a lot like Silicon Valley, including the high housing prices and the traffic.

PhilipA4• 8 years ago

I doubt they will last through our the winter. It is still in the best interest that the area continues to grow.

duxup2• 8 years ago

We have Little Canada.

We'll just have to found a Little Valley and store them all there.

majos• 8 years ago

I thought the tech scene in Minneapolis revolved almost entirely around healthcare. Is this incorrect?

PhilipA4• 8 years ago

I must admit I am a bit too busy to network a whole lot, so that might be the case. I am more looking at it from a talent perspective.

HeyLaughingBoy2• 8 years ago

Not really. It's more that healthcare is probably the single largest software industry around here. But there's a pretty good mix.

cozuya• 8 years ago

Huh? There's UHC/Optum sure, but also Best Buy, Target, and a bunch others. Most of the people I know don't know or care about the healthcare scene here.

jdhn• 8 years ago

As someone who went to school in the Midwest, moved away, and then moved back, I think it's good that this is happening. That being said, I plan on moving away from the Midwest for good later this year, as there are better opportunities (and weather) elsewhere.

swanson• 8 years ago

If you happen to be an Indianapolis-based (or surrounding area) developer reading these comments, please tweet me @_swanson and I'd be happy to get you invited to our local Slack instance.

aidenn04• 8 years ago

I graduated from Purdue in '04 and the job market in-state was terrible. The best offer I received in Indiana was a one year contract @ $35k in Fort Wayne. Several talented people I knew took software jobs at $40k or under to stay close to family.

I didn't even have to go to a tech hub to get more than double that $35k job offer.

As an aside: I will never work for Caterpillar after seeing the way the recruiters treated students at the job fair. An actually overheard sentence (and whatever tone you are hearing in your head is likely less harsh than what was used): "Our requirements list a minimum 3.5 GPA, why are you wasting my time with a 3.2?" this was not a particularly egregious example either, but rather the typical way they talked to candidates once they found a reason to throw away their resumé.

Trundle• 8 years ago

With your opinion on Caterpillar, I feel like I need to share that I once spilt the contents of about 10 beers on top of some of their bigwigs.

You're welcome.

AndrewKemendo• 8 years ago

Did you graduate from the Engineering College?

I am on the Engineering Accreditation Board now and this is the feedback that we need from alums.

aidenn04• 8 years ago

I graduated from the College of Science. Since that time there has been a huge increase in software openings in the Midwest.

I was looking at software jobs, with a preference for embedded. At the time there were very low paying jobs in the Fort Wayne area and some startups in Indy.

Now Cincinnati is booming, with Indianapolis falling not too far behind. Big 10 wise, Madison and Ann Arbor both seem to have more of a tech hub than Lafayette. The company I currently work for recruits fairly heavily from Illinois and Rose Hulman. I can track down some recent grads if you want recent midwest job-hunt info.

froindt• 8 years ago

While I was in school from 2011-2015 I noticed the GPA requirements seemed to drop significantly! Cat, John Deere, and Boeing all had 3.5+ requirements when I started. Last I heard, John Deere was at 2.8, and the others dropped as well.

aidenn04• 8 years ago

At the time Cat really knew they were the belle of the ball.

They were local and they hired from pretty much all majors in the College of Engineering. IIRC they weren't particularly interested in entry-level software people at the time despite listing it as an opening.

lowpro2• 8 years ago

I'm currently at Purdue, and these companies currently have hard requirements of 3.0. If you're below the system won't take you. Other companies have soft requirements and will take you below 3.0, which is becoming more accepted I believe.

crb002• 8 years ago

Did some custom AutoCAD software for CAT back in the late 1990s. Their IT department auto-deleted our package, had to drive our tech back to Illinois to re-install it.

andscoop• 8 years ago

While 34k is and probably was very low, Fort Wayne Indiana is one of the lowest CoL cities in US. I wish they would tech take more seriously there, but they're in for an uphill battle if they do with Detroit, Indianapolis and Chicago competing for talent in the close proximity.

I think there is a real opportunity for state side digital nomads who want to live cheap while starting a business. Places like fort Wayne Indiana give them access to a lively downtown, cheap housing and access to 1st tier cities in a few hours drive. Source - I grew up there.

tschellenbach• 8 years ago

Boulder is actually getting quite close to SF in terms of engineering salaries. This is article is a bit late with spotting the trend.

whalesalad• 8 years ago

Does Boulder count as the Midwest? Plus... Colorado/Denver/Boulder has a lot more sex appeal than Des Moines IA or Columbus OH so I’m not surprised it isn’t facing the same salary challenges as the actual Midwest.

shagie• 8 years ago

Colorado is in the West - Mountain region in the Census ( https://commons.wikimedia.org/wiki/File:Census_Regions_and_D... ).

It isn't part of the breadbasket / midlands culture ( https://www.washingtonpost.com/blogs/govbeat/wp/2013/11/08/w... )

It doesn't have the midwest linkages in Facebook ( https://petewarden.com/2010/02/06/how-to-split-up-the-us/ ).

It isn't part of the hopelessly midwestern culture ( https://www.youtube.com/watch?v=L3B9iu3QAwM ).

So nope... Colorado isn't midwestern.

omot• 8 years ago

Kind of an irrelevant tangent, but I think the reason why Snapchat is suffering is that HQ is in LA. I noticed that you have to pay great developers/designers more to relocate away from the Bay Area. You also get slower iteration on new hires since they have to fly to/from SF/LA for interviews. It's great that these founders could stay in the Midwest, but if they're ever to compete against the giant companies, they'd probably have to relocate to the Bay Area or Seattle.

hokumguru• 8 years ago

I live in Lincoln, Nebraska and this has been clear to us for years. We've a few startups and agencies of decent size and reputation that have made their home here.

Quite interestingly, it's not been that terribly difficult to find tech jobs paying 80-110k here where one might find a good rental for 600-700/m (I should add home ownership in Nebraska is quite large).

I quite like the idea of the west-coast salary in a midwest cost of living. Hoping it stays that way :)

If interested you could check out http://siliconprairienews.com/

Tempest19812• 8 years ago

I see 2 companies with looking for software developers on your Jobs page: D3 Banking, and Proxibid. Is that typical?

tortasaur• 8 years ago

If you're asking if it's typical of the area, no. It appears that job board only has two companies posting to it. Indeed or LinkedIn are better indicators of the market.

uptownfunk• 8 years ago

The internet I would contend didn’t make location completely irrelevant. I think the existing gap lies in access to capital. And while we do not have crypto done anywhere near correctly, the true democratization of capital will do a lot more for the redistribution of wealth displacing the SF VC CF that currently exists today.

_bxg1• 8 years ago

Hopefully this will reduce some of the techno-elitism that's been on such a sharp rise for the past decade. It's heartening to see an intersection of the progressiveness of tech with the groundedness of people outside The Valley.

lettergram• 8 years ago

As a startup founder who moved to the Bay area and moved back. I can see why, literally I own a house, with better internet, 5 minutes from a store, with no traffic, no distractions, and can communicate with anyone online...

Honestly, location matters to an extent, but it's really what you make of it. I know people across the country, they intro me to others. Many I never meet in person, yet we all help one another. I think it's more than possible to grow connections in the absence of presents, just harder.

lowpro2• 8 years ago

I grew up in Fishers, and currently go to Purdue (an hour north). I can say from what I've seen that tech really is coming here, it isn't trying anymore. I know there is a lot of 'Silicon Valley of X', but I don't think Indy is trying to be the next Silicon Valley. It feels like the people here are content at solving problems big and small, and not as focused on capital and business. Personally I think this a good thing, and prefer it. And of course as the article states, a little Midwest politeness pervades the area.

Salaries are also way higher in the area then they used to be (expect maybe $50,000-60,000 in the area, at least for new grads in the area for larger name companies). It's not SV wages, but it's not city living either, and the area is great.

To follow some of the people in the area, I'd look at @DonWettrick [0] on twitter, he's an educator in the area and a lot of his students are a part of Launch Fishers and are coming into the local start up scene. If you care about the next generation, definitely a class to keep up with!

[0] https://twitter.com/DonWettrick

lotsofpulp• 8 years ago

In my experience, if you like working and you're top 10%, you will do well in a big city. By the time you're 26 to 28, and you have an MBA/JD/MD, I see my friends making $200k+ easy. If you're in this group, then you're household income is $400k+ easy, but the big difference is the connections you're making which can enable you to go up to 7 and 8 figures or more. Really depends what you want to gamble on, but if you're top of the class and want to make money I would definitely try out a major city.

TulliusCicero2• 8 years ago

Poring over the available data, Case discovered that plenty of Midwestern and Southwestern cities were leveraging tax incentives to stanch local brain drain, and a few, such as Pittsburgh and Indianapolis, were cultivating their own robust startup scenes.

Tax incentives means competing on price, which is a loser in the long run. Lower taxes sounds good until you consider the implications: less money invested in the society itself.

“We have a lot of quality-of-life advantages: not a lot of congestion, good restaurants, low home prices,” he said. “It’s a place where a young family won’t bankrupt themselves buying a house with a yard.”

* Not a lot of congestion just means they have car-dominant sprawl that hasn't hit a huge economic boom yet. That's a downside to me.

* Somehow I really doubt their restaurants are significantly better than the bay area, NYC, or Boston.

* Home prices aren't so much a quality of life advantage as a cost of living advantage.

briandear2• 8 years ago

Lower taxes sounds good until you consider the implications: less money invested in the society itself

Or, perhaps the Laffer Curve? Maybe revenue actually increases? Look at Texas: huge budget surpluses and lower taxes and public schools ranked higher than California.

I am not trying to debate which state is better, but I am trying to make the point that lower taxes does not correlate to a lower quality state. A poorer state does correlate: such as Mississippi for example, but low tax “rich” states do just fine.

TulliusCicero2• 8 years ago

Yes, but look at what usually happens. For example, most of the top 10 GDP per capita states are blue (and the ones that aren't are tiny petro states), while most of the bottom 10 GDP per capita states are red. This directly contradicts the conservative mantra of "low taxes spurs economic growth", if anything it looks like the opposite is true.

I am not trying to debate which state is better, but I am trying to make the point that lower taxes does not correlate to a lower quality state.

Well, "quality" is a pretty subjective word, but it does seem to generally lead to certain things being worse, like social safety nets, education, etc.

For example, in the case of Texas, it also has an insanely high maternal mortality rate, and while public schools there may outrank California's, California has an extremely strong public university system.

Startup founders throughout the Midwest are doing something new: staying

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