If Silicon Valley were to define itself in a word, it may well be “disruption.” And for a select few, the definition would fit like a glove, which would likely be fitted with biometric sensors that vaporize cancer cells with the snap of your fingers. But for most young entrepreneurs, the siren call from the disruptive holy land in Northern California has been more of a false promise.
That’s not to say that innovation doesn’t still happen there. Far from it. No longer is the problem, as Peter Thiel put it in 2013, that “we were promised flying cars and instead we got 140 characters.” After all, we got driverless cars. The issue today is that, for every one person engineering the next driverless car, we have a hundred others coding the next Candy Crush. And all these innovators made the pilgrimage to Silicon Valley under the same banner of disruption.
Meanwhile there’s another strain of innovation that offers the next wave of entrepreneurs a more realistic opportunity to, as they like to say, change the world—or if not the world, perhaps a city. Few would brand the startups in places like Asheville and Detroit disruptive, nor would anyone dismiss their ambition to transform these cities for the better. And in recent years, cities like these have fought to keep homegrown talent home—or even reverse engineer the migration to the West Coast.
For the last two years, the personal finance company Nerd Wallet has ranked the top ten cities in America for young entrepreneurs, looking at the availability of funding, networking opportunities among other would-be disruptors, affordability and the local economy. Five cities made the list both times: Minneapolis, Seattle, Austin, Oklahoma City and Omaha. San Francisco didn’t crack the list either year. Nor did other top talent magnets New York City, Chicago, Los Angeles or Boston.
These mid-sized cities across America have benefits that their oversized counterparts can’t offer. Yes, they offer a better bang for their buck. But in an appeal to ambition, rather than just lifestyle, places that aren’t home to booming economic growth engines tend to have problems in need of solutions. In innovator industry parlance, these are places looking—and in some cases, begging—to be optimized.
In Detroit, the story of James Robertson, who walked 26 miles to and from work every day, made headlines of the city’s public transportation woes. But for those in the city, it was not a revelation. In 2012, plans for a light rail line within the city were scrapped. “I was furious,” said Andy Didirosi, a Detroit-based entrepreneur, in an interview with Fast Company. “This train wasn't going to fix everything, but it was going to be the symbol of a new era in Detroit.”
To do what the city couldn’t, Didirosi bought a fleet of old buses with $2,000, remodeled them, and founded The Detroit Bus Company. Through a combination of city tours and public shuttles, his buses transport everyone from 20-somethings out for a night on the town to the city’s underserved schoolchildren to and from afterschool programs.
His story isn’t unique. As Detroit seeks to restore its glory years in the last century, it sees local innovation as a key to the new one, with startup incubators fostering local entrepreneurs and companies like Twitter opening offices to bring a silicon sheen to the Motor City.
Elsewhere across America, entrepreneurs in search of funding may find an unlikely angel investor, one that will pay attention to smaller companies that don’t appeal to most venture capital funds, but carry higher risk than banks are generally willing to take on: the government.
For years, local, state and federal governments have been dabbling in their own brand of venture capital to hasten innovation. With the Silicon Valley ethos of targeting an underserved market, they’re looking at the companies “seeking equity capital in the range of $500,000 to $2 million [that] generally cannot be financed with traditional methods,” according to the U.S. Economic Development Administration.
In 2002, the Ohio Development Services Agency created Ohio Third Frontier, an ambitious, multibillion-dollar project that provides companies in the state with early stage investment capital. Originally planned to be a 10-year project ending in 2012, its success led the state to extend it through 2015 and an additional $500 million investment.
In Youngstown, Ohio, a city once so scarred by violence that it earned the nickname, “Murder Town, USA,” one of the Ohio Third Frontier’s investments has helped made it the unlikely home to one of the nation’s fastest growing software companies.
Turning Technologies is a company that measures audience engagement for educational and business training tools. These are useful tools; they are not disruptive. But they have brought 320 jobs and revenues estimated between $50 million and $100 million to a city that’s long grappled with nation-leading unemployment and poverty rates. Turning Technologies may not be changing the world, but as a beacon of local innovation, it certainly is helping transform Youngstown—and offering hope for cities like it around the country.