The Des Moines Business Record hosted a Power Breakfast panel discussion last Thursday focused on “Innovation Acceleration.” Each panelist represented a different sector within Iowa’s startup ecosystem.
The five panelists were:
- Stephanie Atkin – Vice President of Marketing at Dwolla
- Craig Ibsen – Managing Partner at Next Level Ventures
- Megan Milligan – President & CEO of the Iowa Center for Economic Success
- Jeff Russell – President & CEO of Delta Dental of Iowa
- Geoff Wood – Founder of Gravitate
Here are some of the key takeaways from the event:
Iowa plays to its strengths
Two sectors where Iowa outperforms the national average are in agtech and insurtech, said Ibsen during the breakfast.
In recent years, two industry specific accelerators have started in Des Moines, the Global Insurance Accelerator and the Iowa Agritech Accelerator.
“We are seeing some statistics that show that employment levels in those areas are 30% better than the national average,” Ibsen said. “We’re seeing new company formation and investment dollars growing in those two sectors, both from within the state and from out of the state.”
Startup activity can be hard to measure
“It’s really hard to understand what startup activity is in Iowa. When I try to dig into the rankings that come out, I can’t make heads or tails of them. And I live this every day,” said Wood.
“When you look at a lot of these businesses, some of the reasons they’re not included in the statistics is that so many people are still innovating out of their their basement,” added Milligan. “Part of what we have to do is welcome inclusivity. But those people aren’t going to come to use. We have to go to them and bring them to us.”
“One change we have seen since 2009, when I moved back to Iowa, is capital investment,” Wood said. “When Dwolla first raised $1 million it seemed like so much money to raise here. They filled a coffee shop to celebrate. It was like a rock concert. Now, companies are raising a million dollars, at least quarterly, usually monthly.”
We track this at Clay & Milk and through the first three quarters of 2018, over $90 million has been raised by startup companies in Iowa.
Rural Iowa needs better access to resources
“One of the reasons Iowa is underrepresented is because we have a rural population that is disproportionate to the rest of the United States,” said Ibsen. “The vast majority of venture capital is going to urban areas. And speaking as an investor, I see most of the dollars flowing into the Ames-Des Moines, Cedar Rapids through Coralville-Iowa City corridors, and that is a challenge. And it’s a challenge that I don’t really have an answer to.”
“I think part of the rural urban divide is infrastructure,” added Russell. “If you don’t have broadband of any significant speed in rural Iowa in certain places, you know, you’re as lost as if you didn’t have a road. How do you have broadband in rural Iowa so that when these kids go to college, they want to come back and start a startup business in these small towns?”
Geoff Wood is the co-founder and Publisher of Clay & Milk.