In what’s become an annual event, earlier this week Revolution hosted a summit in Washington, D.C. of 125 startup ecosystem builders, funders, cheerleaders and promoters from Rise of the Rest cities across America. Not getting the same attention as more mature (coastal) communities, these towns deserve a champion and over the past four years, Steve Case has evolved into their able spokesman. (You can read more about the time he visited StartupCincy three and a half years ago and my take on last year’s Summit here.)
The emphasis/theme this year centered around funding, funds and micro VCs. In total, 57 cities were represented. The average fund size of those in attendance was $25 million (some as small as $2 million, none larger than $100 million) – a varied group with a shared mission to make an impact not just on their neighborhoods, but in fact, the nation.
The event was again expertly put together by the Revolution team (nod to Anna Mason!) and PACKED with stellar content — a great mix of outside speakers as well as participants themselves. With so many unique voices, it’s impossible to list them all, but you can browse #ROTRSummit on Twitter and bounce through the agenda. Following are the highlights from my vantage point and action items I’ll be executing not only for the benefit of Cintrifuse/StartupCincy, but also to play a bigger role within the ROTR ecosystem writ large.
“If you want to go fast — go alone. If you want to go far — go together.” It’s a favorite Steve Case quote and never more evident than at the Summit. If you’re interested in the long game, if you’re playing to last, you need to find a partner. This isn’t about quick wins or fast results. The quote itself is attributed to an African proverb, but it pertains to those of us building startup ecosystems.
Embrace Your ExPats
Cincinnatians are not alone when it comes to embracing the folks they call ‘boomerangs’ — the ones that come back to their hometown after an outward journey for years/months/sometimes decades. Midwestern cities in particular seem to be awash with these prodigal son-like stories. I’m a boomerang myself, careening back to Cincinnati after a two-year stint with The Walt Disney Company in Florida.
What a cool title (ExPat in Residence) and fresh approach – embracing those who have left your ecosystem and (want to) come back and invest in the future. @JillFord313 #ROTRSummit pic.twitter.com/6MQ6j0XAST
— Eric Weissmann (@eweissmann) February 27, 2018
This phenomenon is a big advantage smaller (than Chicago…) towns have and we should be intentional about the effort to bring these folks back, get them involved and engaged in the tech scene in meaningful ways. Jill Ford, now with Toyota AI Ventures, but formerly with Detroit’s office of Innovation and Entrepreneurship shared the story of Detroit Homecoming — a vehicle by which influential former Detroiters (Detroitians?) are encouraged to invest in startups in their hometown. Take a look at their pitch competition last September, which awarded over $40,000 to four startups.
However, it’s not always an easy sell to get ExPats back to their roots. Chris Olsen, partner at Drive Capital recalls when he was growing up (in Cincinnati, no less), “there was no version of the world where I’m coming back to Ohio,” Olsen told the crowd on Wednesday. Now that Drive has setup shop in Columbus, he sees that all the raw ingredients for successful, scalable, profitable startups are here (in the Midwest), but nobody’s catching it yet. That’s why we — not just StartupCincy, but all of the Midwest — need to make an effort to pull ourselves up TOGETHER, not relying solely on outside help. It’s great to land an investment from a Silicon Valley VC, but it’s even better to land a partner, a founder or a luminary that used to call the Midwest home.
We Need To Bridge Gaps In Geography
It’s not up to the coasts to bring ‘the rest’ together. It’s up to us, the communities that make up flyover country. We have to start thinking about how we can syndicate deals between funds. And, perhaps, Revolution becomes the glue that connects a deal together. As Steve and fund managing partner JD Vance reviewed, they don’t always need to lead the round or take a board seat, but the foundation is in place for them to serve as the mortar binding all these building blocks together across the middle of the country.
— Charlie Brock (@cebrock) February 28, 2018
Leveraging the region’s network of colleges and universities also presents an opportunity unique to the Midwest. Just think of all the students who ATTEND Ohio State, or Rose Hulman, or Indiana University but LIVE in Cincinnati. Shouldn’t they be immersed in the startup ecosystems of BOTH communities— the one where they go to school and the one where home is? Of course we in StartupCincy would love for UC/Xavier/NKU/Miami students to stick close to their alma mater after they graduate, but what would happen if we put forth an effort similar to the ExPats referenced earlier? Surely there are ways to fuse together our ecosystems through college campuses — we just need to facilitate, cross-pollinate and be the sherpas.
Diversity Is In Our Favor
You’d be hard-pressed to find a hotter issue in the tech scene than diversity and inclusion — and it appears the center of the country is poised to be a leader in addressing the matter head on. Part of the answer is simple geography. Mature (coastal) ecosystems are built on relationships, which after a while become interdependant and closed off. Even Kate Mitchell of Scale Ventures admitted sheepishly, “I’m going to drive 10 miles to a deal I already know, to the circle of friends I can easily interview.” Especially ironic given the fact that Scale’s most profitable investment was in Exact Target of Indianapolis (later acquired by Salesforce for $2.5 billion). The Midwest provides fertile ground for favorable valuations.
— Jeremy Shure (@JeremyShure) February 28, 2018
Of course, gender and race are still concerns when you look at the percentage of VC deals that go to female founders (4%) and founders of color (1%). Arlan Hamilton, the charismatic founder and managing partner of Backstage Capital summed things up regarding her view of the situation and resulting investment thesis of her firm, “These (minority-led) businesses have always been here, but been overlooked and undervalued for so long — it’s a goldmine!” I think the Midwest can lead the way as far as intentional inclusion goes and proud of recent strides we’ve made at Cintrifuse to address the conversation.
This game we’re playing — startup ecosystem building — is full-contact. It requires limitless energy and an unflappable constitution. There are rocky days for sure, but it’s not rocket science; it still comes down to human interaction and relationship building.
My old MacBook Pro is dying and with it will go the sticker that was my nametag on that ROTR Road Trip to StartupCincy back in 2014 (same year as the World Cup, thus the US Soccer emblem in the corner!), but I’ve proudly kept it on as a memento of that day in July almost four years ago and a reminder of how far we’ve come as an ecosystem.
While there’s still much work to do, we’re not alone. Many hands make light work and networks like ROTR (and Techstars, Kauffman Foundation, Google for Entrepreneurs, Venture for America, et al) only make the connections more accessible and, therefore, the finish line appears to get a little closer. Cintrifuse and its partners across StartupCincy can be maximalists by leveraging these exchanges, making an introduction here and there and taking advantage of this renewed attention to our efforts.
I’m proud of the role I’ve been able to play in making things happen and the mechanisms we have in place that will write the chapters to follow. After gatherings like the ROTR Summit, it’s easy to envision a connected infrastructure across the center of the country of startup ecosystems, investors, customers and mentors. The meaningful work starts now; let it begin with me.