Why Kentuckiana Matters

This is a post I posted on my company’s blog over at BlueSky Network.

Midwest Matter

As Louisville prepares itself for what is shaping up to be an incredible gathering of thought leaders, entrepreneurs, do-gooders, makers, and culture mavens from September 21 – September 30,  it seems appropriate to step back and smell the roses that many community members planted several years ago.  Incredible programs including Idea FestivalMakerFairVillage Capital/Venture Well finaleNuLu FestStartup WeekendIdea Mornings are all happening in the same week. What’s more, is many of the leaders behind the events are more than happy to work together and figure out ways for the programs to complement each other– A tell tale sign that an ecosystem is thriving.

The excitement extends beyond one week in September too –  Velocity recently capped its successful inaugural class of startups,iHub and PTY Coffee  are bustling daily, and  XLerate Health is in the thick of their program.  By some standards, Louisville might just be ready to plant its flag as a fantastic, mid-west leading, budding ecosystem for startups.

But Kentuckiana has far more to offer the world than an good place to do a ‘startup’. As recently mentioned by several folks around town,  we don’t want to be the next Silicon Valley.  This is true- and we don’t want to be like every other mid-size city across the US do we?  Pounding our chests about cost of living.  Complaining about “brain drain”.  Let’s take the high road:

What if we focused on our real, innate, time-proven strengths instead?  Let’s focus on how our region could support real, scalable, impactful businesses in addition to supporting the startups.  As Stephen Reiley said at a recent dinner at his home “Louisville is small enough to care, but big enough to matter.”   He was speaking to Kentucky’s unique position to solve some of the world’s most ominous agriculture and food economy problems.  Afterall, the commonwealth has the greatest number of small shareholder farms in the US- many of which are sitting unfarmed.  But I think this statement can, should, and will ring true outside of ag and food.  I believe our region can make a great impact in what I call  the new widget economy.  ’Widgets’ could be super-high tech hardware electronics or simple items that just need ‘built’ – watches, plastics, games, even clothing.  Building widgets is easier than ever thanks to companies like Arduino, MakerBot, and KickStarter.  Building a business based on widgets is a bit harder. Luckily, that’s precisely what the midwest is good at.  We have two huge regional strengths that stand out among many others:

First the easy one:  Logistics.  Amazon, Zappos, GILT, Cafepress have decided to call Kentuckiana home for obvious reasons.  But these are behemoths that came for tax advantages on top of the relative location to UPS and FedEx.  But there’s a whole new class of  companies that need this same strength.  Enter:  The Hardware Revolution. 

The second major strength of the region, and a major value add to growing widget companies:  access to customers.  Real customers.  No other city in the country is within a 2.5 hour drive or 2.5 hour flight from such a large percentage of the United States population. This was so profound to me, I made the handy visual aid at the top of this post.  The reason I make the distinction of real customers is the fact that there are a lot of people in San Francisco.  A lot of tech savvy people.  This is both a blessing and a curse.  It is a blessing because having open-minded consumers makes it easier to take a wild chance on new products.  The curse is that some things that stick on the west coast will never make it in the “real” world.  More than a few VCs I’ve met with out here concur.  Customer validation (thanks to the Lean-Startup methodology) is hot right now and Kentuckiana has customers.  Real customers.

If Kentuckiana (yes, Indiana is important here) can focus on goals beyond software apps, and early stage funding – we might see just how bright the regions future could be.  Its easier than ever for a hardware widget company to sell devices.  Money is on the coasts.  Acceleration is on the coast – Fine.  But what about manufacturing?  Not iPhone-volume manufacturing.  But what if you had 10,000 units to build?  No chinese CM is going to touch this.  And you can’t build that many devices in your San Francisco office.  Vegas seems to have caught a whiff of this opportunity with their recent announcement of 25,000 square foot facility for hardware startups to manufacture their goods.  There is no reason why Kentuckiana couldn’t capitalize on the changing tide of manufacturing.  Its not all blue-collar labor either.  Louisville’s culture makes it a perfect choice for companies to set up their second office next to manufacturing.  Southern Indiana offers some of the ripest space and labor for manufacturing, not to mention a great culture scene of its own – sometimes even referred to as the “Brooklyn of Louisville.”

The entire picture for Louisville and Southern Indiana looks bright.  Software startups get a lot of the attention sure… But lets not miss the forest through the trees – or bluegrass.

About the author: Madison Hamman is a Project Manager for BlueSky, transplanted from Louisville to San Francisco to focus on new trends  for BlueSky that could benefit the Kentuckiana region.  Prior to BlueSky, he helped start Mavizon, a Louisville-based connected car startup.