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The State of Tech in Minnesota

You won’t find a bigger “homer” – someone with a passion for and a strong rooting interest in the place they are originally from – than me.  The Twin Cities area of Minneapolis/St. Paul is a truly wonderful place to live, work, play, raise a family and more.  In the tech world specifically, the list of companies and innovations originally from Minnesota is as long as it is distinguished.  Supercomputers.  Pacemakers.  Seatbelts.  Scotch tape.  Post-it notes.  Best Buy.  Hearing aids.  Open heart surgery.  And much more.

Innovation
But these days I’m concerned about the local tech scene.  I’ve followed the landscape closely the last several years, and Game Changer has consulted and worked for several companies and tech entrepreneurs in the area.  It just seems to me like the market lacks the spark and “sexy” factor it used to have.

I think there are a few reasons for this:

  • Most mature tech companies in the market went public, were acquired, etc.  Dell’s relatively recent acquisition of Compellent for nearly $1B is just the latest example of how the area’s strongest mid-size and large tech-oriented companies of the last 10-15 years are today controlled by people and driven by factors from the outside.  As a result, we can’t really claim these companies – and others don’t associate them with us.
  • Funding dried up.  The Great Recession sure had something to do with it, but even before that there was less investment in local tech than in the years before.  It’s hard to say why, but I’ve talked to many angel investors and venture capitalists with deep connections in the Twin Cities and they all feel this way.  The good news here is that I’m seeing and hearing more about how the purse strings are starting to loosen up again.  But I’m not sure we’ll be able to shake concerns in this area until big dollars start flowing again to Minnesota start-ups from the rest of the country – and until some of these newly funded start-ups make it big.
  • Community isolation.  In some circles, Austin became what the Twin Cities used to be, and in others the fast-growing city of Rochester, Minn. could be the next Austin.  Yet the regional and national tech communities tend to overlook and/or isolate the Twin Cities.  Case in point – there’s a movement among techies in Kansas City, St. Louis, Omaha and Des Moines to dub the area the “Silicon Prairie.” It makes a lot of sense – pooling resources to generate attention for all that’s going on in the area.  The national media have caught on as well; even the Wall Street Journal wrote a story earlier this year extolling the virtues of the prairie tech scene.  Don’t get me wrong – there are lots of great things happening, and their success deserves to be celebrated.  But when I recently asked several people at the forefront of the movement why they haven’t involved the Twin Cities and greater Minnesota, I heard two answers loud and clear.  First, they’re “so far away” from the other cities (that’s debatable, especially with the area’s quality of talent and pedigree/reputation, but I digress). Second, they’re not “sexy” anymore.  There’s a “what have you done for me lately” mentality in the tech world, and the Twin Cities just don’t appear on the radar.  It’s unfortunate, really, but it is what it is.

I can personally attest that there’s a ton of tech talent in the Twin Cities, and lots of great ideas just waiting for their fair shot at success.  There are some really great local resources to help incubate and develop tech companies as well – Minne*, the Minnesota Cup competition and Tech.mn are just a few.  It’s my hope that these people, ideas and companies can become the next great economic drivers for the Twin Cities, and that as a by-product the area’s tech reputation rebounds to what it used to be.  If there’s anyone reading who shares this passion and concern, let’s work together and figure out what we can do to help our local companies succeed and raise the profile of the market as a whole.  Feel free to contact me anytime.

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