During the recession, Lincoln topped lists for the lowest unemployment in the nation. Now Lincoln is drawing attention again as Exhibit A for the promise of the Silicon Prairie.
In March of this year, NPR ran a story on the Silicon Prairie, featuring Lincoln -- “a surprisingly strong tech startup community.”
Last month, Bloomberg Business ran another story on the Silicon Prairie, covering much the same ground (affordability, quality of life, strong talent pool), while describing Lincoln has something of a post-college paradise.
“Any software engineering salary, even starting level out of college, will be plenty to live OK just about anywhere. It’s just a matter if you want to live in a small apartment with the bare essentials, or live in a nice condo with a big TV and nice alcohol every week,” a Hudl intern was quoted as saying in the article.
More impressive is that most of the biggest recent venture capital raises in Nebraska this year have been for Lincoln companies. Bulu Box, Nobl, Travefy and opendorse all had raises near $1 million or more, while Hudl’s $72.5 million Series A raise broke all state records.
Behind many of these rounds are two venture investors committed to Lincoln -- Nebraska Global and Nelnet. While incubators like VentureTech continue to operate mostly under the radar.
Many entrepreneurs in the region who visit Lincoln come away remarking on the Lincoln magic.
What makes Lincoln special
1. Long runways, slow burn
What makes Lincoln a good example of a “Silicon Prairie” community is its affordability. Office space is inexpensive, particularly in comparison with the costs, which means more money goes toward growth instead of operations.
Not only does that mean early stage companies have longer time to gain traction, it also makes it cheaper to fail. While that might not sound impressive outside of the startup world, it’s key to creating a thriving ecosystem of experienced entrepreneurs.
2. Ideal location
Lincoln is less than an hour from Omaha and less than three hours from Des Moines, Kansas City, Topeka and Manhattan, Kansas. All within an easy day. You’d be surprised how many Kansas City folks find their way to Lincoln events and vice versa.
A location nestled between Omaha and Kansas City allows Lincoln to tap into nearby talent and experience pools. Both Travefy and Hudl maintain satellite offices in Omaha for this purpose.
There’s one magical word you pick up quickly around startup happy hour small talk: density. Startup communities are perpetually seeking that close proximity of talent, companies and investment, which can lead to chance encounters and collaborations that nobody could’ve predicted.
Of all the startup communities in the region, Lincoln is perhaps the densest, with much of the activity happening in the Haymarket district, anchored by Nebraska Global and the NMotion accelerator. Hudl’s decision to build its new headquarters right in the middle of this ecosystem at Canopy and P streets will only make serendipitous encounters more likely.
4. One university system
Another factor that centers the community is the University of Nebraska-Lincoln. Nearly every major part of Lincoln’s startup community loops through the University somehow. Although rarely mentioned, the NMotion accelerator is a University-backed project, as is Turbine Flats, as well as the Nebraska Innovation Campus.
Unlike Iowa, Kansas, and Missouri, there’s only one state university system in Nebraska, which means that most of the state’s homegrown talent is funneled toward Lincoln, one way or another.
Hudl, Elite Form, opendorse and Bugeater Foods are just a few of the companies where the university has been both an important partner and a talent pool.
5. A lock on young talent
Universities are underrated talent engines. But the Lincoln startup community, particularly at Nebraska Global, has a lock on great talent coming out of UNL. Exceptional young talent is discovered, fostered and retained. Talent that stays moves from one startup to the next, only deepening the available expertise.
The Jeffrey S. Raikes School of Computer Science and Management has also helped keep in town some of Lincoln’s brightest lights. From the NPR story:
"CEO and co-founder David Graff says the company could have moved anywhere, and had offers to relocate, but it stayed in Lincoln because 'we really like the access to the University.' Hudl has 35 interns and most are from the Raikes School (named for Nebraska alum and former Microsoft executive Jeff Raikes)."
6. A supportive but not too aggressive chamber
Unlike those in other communities, the Lincoln Chamber of Commerce seems to be enjoying the grassroots growth of the startup scene, rather than forcing it along. For a city dominated by institutions (the university and the legislature), the energy and growth of Lincoln feels more authentic and less top-down than other places.
It also means the startup community has much more cosmopolitan flavor. Lincolnites regularly attend Omaha events, Iowa events, Kansas City events. It seems like there’s hardly a month of the year when the Lincoln community isn’t heading outside of their smaller community to share their experiences or cheer others on.
7. More on the way
Even more remarkable is that Lincoln isn’t even running at full strength yet.
Nebraska Innovation Campus is just beginning to open up. Some have questioned the long timeline to launch, but with a new $750,000 grant for biotech startups just last month, we haven’t seen Lincoln max out its potential for tech innovation.
What’s the limiting factor for Lincoln?
With all that said, unanswered questions remain, particularly when it comes to talent. It’s true that companies can launch in Lincoln, but can they scale there? A low unemployment rate is a sign of a strong economy, but it can also mean a lack of available talent. The key factor is a deep-enough talent pool. Hudl’s new seven-story headquarters in the Haymarket is moving headlong into that question.
Lincoln has plenty of young, gifted students, but at some point growing companies like Hudl need to attract national-level executive-tier talent. That takes more than a big salary. It means selling outsiders on the Lincoln community as a whole.