You’ve likely heard the stories of a simpler time, when all it took to finance your startup was your word and a handshake.
In 1975 a pair of entrepreneurs was looking to purchase a nearly bankrupt manufacturing company in a small Iowa community. As retold by one of these founders, the bank President said "as long as you keep your manufacturing in our town, we’ll loan you the money."
No 25-slide pitch deck, no venture capital - just his word and a handshake.
Today this company still builds its product in the small town and ships globally to customers like Yankee Stadium and the Bahrain International Circuit.
Modern Day Fundraising, 40 Years Later
Fast forward forty years - another startup, another bank, same small town: in this case, startup founders needed cash to fund inventory production.
The banker’s response: "bring us a purchase order and we’ll provide a line of credit to cover your manufacturing costs."
Again, no pitch deck, no venture capital - just his word and a handshake. Plus, production for this brand new product would be done by a manufacturer across town on a just-in-time, fill-the-PO basis. Again, no minimum order, no credit check - just his word and a handshake.
Really, in our small-town startup community it still works this way. But it’s not simply about friendly, loose-with-their-money bankers (they are bankers after all); it’s more about the entrepreneurial mindset and the solid startup ecosystem connections that exist here.
Small Town Symbiosis
The ecosystem of money, manufacturing, and new ventures here is symbiotic. Significant banks needed to support large manufacturing and a thriving agriculture industry. Next, large global manufacturers with production and management facilities headquartered in our area are responsible for much of local employment, and also much of the money that flows into local consumption. Many of these companies began in this town, so entrepreneurial roots run deep. Together, finance and manufacturing lay a solid foundation on which a vibrant startup community stands.
What’s happening today in this small town, much like in communities throughout the world, is like-minded people banding together to energize the community to grow our next generation of startups, one connection at a time.
Building the Entrepreneurial Stack
A healthy entrepreneurial ecosystem is not owned and driven by any one entity - it’s the community that drives it. In his book, Startup Communities, Brad Feld writes a community must have a philosophy of inclusiveness and ecosystem engagement from all aspects of the entrepreneurial stack.
Let’s boil this all down to one simple idea: create an intentionally connected community.
The two stories of the bankers and the entrepreneurs are testament to the fact small communities are really good at this. Both tales are not about quick and risky deals: they are about connection - people who know people.
Feld writes of two other principles for startup community building which are also in play here. Entrepreneurial ecosystem building requires a long-term commitment (Feld says 20 years from today) and it must be led by entrepreneurs.
Here are three ways our small town of Muscatine, Iowa - population 23,000 - creates entrepreneurs and drives intentional connections. Whether 20,000 or 20 million, these are great lessons any community can put into practice.
Ecosystem drivers in Muscatine (entrepreneurs who’ve been here a long time) saw a need to bring creatives, entrepreneurs, economic developers, small business owners, and corporate types together for simple conversation and connections. OPEN COFFEE at The E-Center was established and meets informally each month for coffee with 15 to 25 people attending. Of course there are regulars, but over 18 months OPEN COFFEE has seen nearly 300 people attend creating over 60 unique connections.
Next, an evening meetup opportunity to reach a broader audience was established through our Startup Grind Chapter. Not only does Startup Grind Muscatine connect local community members with one another, it brings Muscatine into the Global Startup Community. Startup Grind’s fireside chat & networking format combines a formal interview series with informal networking for the perfect mix in a meetup event. Startup Grind Muscatine connects 20 to 30 individuals each month. That’s a number that rivals any other major startup city throughout the Startup Grind global community.
Telling the startup story of Muscatine - current and historical - is a key component to maintaining momentum. The Muscatine History & Industry Center, known locally as The Button Museum, tells the story of the deep and rich entrepreneurial roots of this town. Plus, it’s a cool venue and a willing host for all sorts of startup story telling events.
History not only plays a big part in our story, but it also is an important element to quality of life in our community. The Muscatine Convention & Visitors Bureau launched a campaign, Made in Muscatine, promoting the ‘unforgettable experiences to be discovered here’. Simply put, selling quality of life means selling startup opportunity.
In addition to coordinated campaigns by local organizations, individual members of the startup community tell our story whenever the opportunity arises. Whether it’s at the local Rotary Club meeting or at regional events like EntreFest or the Midwest Educators Forum on Entrepreneurship, or a blast of social media, Muscatine startup community drivers talk about what’s happening with anyone that will listen.
Every entrepreneurial ecosystem, big or small, needs strong, establishment-type entrepreneur support programs. In our small community, Eastern Iowa Community Colleges, the Muscatine Center for Business Development (The E-Center), the City of Muscatine, the Greater Muscatine Chamber of Commerce & Industry, and SCORE all provide excellent programs and services to support local startups and entrepreneurs. Two programs worth noting include The E-Center’s great coworking facilities available for use by the community and the City of Muscatine’s Forgivable Loan Program which has helped over a dozen businesses in the last 12 months.
Yes, building a healthy and thriving entrepreneurial startup ecosystem in a small town takes work. Doing so is just like building a startup. It’s not easy, but it is simple. The key is to create an intentionally connected community. Connect individuals. Connect companies. Connect the establishment. Be intentional about who and what those connections mean. And, as connections are made, the story unfolds and the connections become clear. Connect and tell your story. Simple, right?