While tech startups have become synonymous with urban areas that offer improved access to talent, resources and infrastructure, the reality is that rural areas are also home to startups.
This may come as a surprise to those who have moved away from rural areas specifically to find a job in the tech industry, which accounts for more than 6.7 million jobs in the United States alone. Population loss is a real issue for much of rural America; some states, such as Nebraska and Kansas, have introduced tax incentives to fight back against this trend. Others are turning to technology to counter the trend.
States are starting to recognize the importance of supporting and developing opportunities for rural counties. In the state of Washington, the Department of Commerce has been encouraging business plan competitions in rural areas with “at least 10 competitions in rural areas that we have promoted and supported,” stated Maury Forman, senior manager of the rural initiatives and innovations at Washington State Department of Commerce.
This foresight is necessary to support tech startups and the entrepreneurs behind them — tech startups tend to grow quickly in their early years, which offsets “job destruction from early-stage business failures,” which in turn leads to a more robust job market.
Live. Give. Save. Inc., is a financial tech startup based in the city of Red Wing, Minnesota, home to a little over 16,000 people. “Red Wing has a history of pioneers … and inventors. There’s a rich, rich beautiful history of arts, culture and innovation,” said Susan Sorensen Langer, CEO, Live. Give. Save., Inc., a financial tech startup that is creating a mobile platform to boost retirement savings through charitable giving.
Langer moved out to Red Wing after her contract ended with her last employer and was introduced to Neela Mollgaard, Executive Director of Red Wing Ignite, a nonprofit organization that develops and promotes next-generation technology services and applications. “I was blown away by what they were doing in Red Wing,” Langer said, and spoke to the desire to change Red Wing’s image into a place that would become known for startups much like Austin, Texas.
Access to internet hasn’t really been an issue actually. C. Skyler Young
Support from the community to provide the necessary resources and infrastructure has been invaluable to the success of tech startups such as Live. Give. Save., Inc. In 2012, the city of Red Wing and Hiawatha Broadband Communications (HBC) formed a public-private partnership to bring gigabit broadband to Red Wing. For entrepreneurs such as Langer, who have virtual teams, having access to fast internet is crucial.
While other rural areas may not have the same support Red Wing has, technological updates and developments have been on the rise. Certain companies have specifically focused on bringing broadband internet to rural America. “I am often asked if the difficulty of running a company in a rural area is high-speed internet. It’s not,” said Ken Levy, CEO and co-founder of 4-Tell, which helps increase sales for online retailers by 17.1 percent with big data.
C. Skyler Young, owner of Site Savvy, a tech startup that provides managed websites and online marketing for small to mid-sized businesses based in Yakima, Washington, has a similar experience to Levy. “Access to internet hasn’t really been an issue actually,” said Young. “There are a few dead zones in town; some of the communication infrastructure dates back to the 20s,” Young said. “However, it’s been updated a great deal in recent years. It’s not at all hard to find good connections these days.”
While Yakima has a larger population that what is typically considered to be rural, the land is undeveloped and used mostly for agricultural purposes. Known to locals as the little sister of Seattle, Yakima offers plenty of opportunities to enjoy the outdoors, with mountains and bodies of water surrounding the area.
In terms of access to talent, Levy has credited the Columbia River Gorge area with attracting “a personality type that is perfect for startups, and employees want to move here.” Levy stated that “the Gorge has created a high-tech hub with over a thousand technical employees centered around Insitu (a division of Boeing) and related software and hardware companies.”
The assumption that rural areas cannot support tech startups is coming under fire.
While both Young and Langer spoke about the difficulties they’ve faced in getting talent to move to rural areas, they credit remote employees and having a virtual team as filling this gap. “After this [product] kickoff, what I plan is to get a couple of developers to move to Red Wing,” Langer said. Young noted that although finding talent was still a struggle, “it’s becoming easier as time goes on … as people work remotely and choose to live more comfortable and sustainable lifestyles in the countryside.”
And the advantages to having your tech startup based in a rural area? Plenty. Young was full of praise, citing “low cost of living, no traffic, elbow room, and easy access to the outdoors.” In a similar vein, Langer talked about how Red Wing is a great place for those with a love of the outdoors, its close proximity to both Minneapolis and St. Paul, as well as only being 45 minutes away from the nearest airport. “Red Wing is the perfect mix of small town and big city,” Langer said. “It’s a wonderful place to raise children. It’s got everything.” An important factor Levy brought up was access to quality education. The Gorge has access to quality schools and “employees for a high-tech company want the best schools for their kids.”
Although challenges still exist for rural startups, the assumption that rural areas cannot support tech startups is coming under fire. Because of the initiatives of state organizations and private companies, as well as the opening of co-working spaces, rural areas are being given the attention they need and deserve to develop and invest in opportunities that will allow business as a whole to grow and succeed.