Let's get Warren Buffett out of the way first. The investing guru and “Oracle of Omaha” manages to draw tens of thousands of attendees to the annual meeting of his company, Berkshire Hathaway, while also delivering 76% returns in the last decade (against the S&P’s 11.3%).
But shareholders who gather at the company’s annual meeting, dine at Buffett’s favorite restaurant (Gorat’s) and shop at Borsheim’s are just skimming the surface. There's also Big Omaha, a conference for entrepreneurs and investors, and Silicon Prairie News, which tracks and celebrates the doings of startups in the region.
Omaha isn’t just Berkshire Hathaway, thanks to people like Jeff Slobotski, who runs Silicon Prairie News and Big Omaha, and Mark Hasebroock, a two-time Omaha entrepreneur. Through his investment firm, Dundee Venture Capital, Hasebroock is instituting a more structured way for Berkshire millionaires (who are plentiful in the area) to learn about and invest in startups. Hasebroock spoke with Fast Company about what makes Omaha’s startup scene unique.
What makes Omaha a great place for startups?
Mark Hasebroock: Omaha has got a really exciting young dynamic culture that's starting to embrace starting their own businesses. It's a laid back lifestyle. It's really easy to live here. The cost of living is super low. We don't have great big booms. We don't have many busts. It just kind of floats along under the radar.
How does the Warren factor affect the town and the startup ecosystem?
Well, he's an icon. There's no doubt. In fact, my office is in his grandfather's old grocery store, right in the heart of central Omaha. He is an investing icon and ironically, not a startup investor at all. Particularly not in technology or tech related companies. But he is definitely the thing that people recognize about Omaha.
I would imagine there are a lot of Berkshire millionaires around Omaha.
That's very true. There's something like 100-plus people that are a hundred-millionaires in Omaha. No one really knows that. They could be standing right next to you and you just wouldn't know. Tapping that and creating the platform for people like that to participate is really important. That's what I'm trying to do with Dundee Venture Capital. You don't have to put tens of millions of dollars into things, but you can participate in creating some really unique companies. And letting people know there's a way to invest in startups around here if they want to do that. There's just really no structured platform for anybody to invest in. There's a Nebraska Angel Group, but it's really fragmented.
Would you say there are particular types of startups that do better there?
There's kind of a retail focus to Omaha. That's why I think some e-commerce businesses will thrive because of that. It comes from companies like Nebraska Furniture Mart, Omaha Steaks. We see things like that convert to online presence. Some payment systems are starting to pop up. Some early technology in agriculture, architecture, engineering, construction, software. The whole sustainable agricultural market is really growing. The unique thing I'm seeing is people saying, “All right, so what’s the answer? Let's create something.” Versus, “Well, who does that?”
How is Omaha better or different from other cities for entrepreneurs?
I think the work ethic here is really solid. I think you’ll find it's something that's baked in over the last century or so. Nebraskans in general are very much a hard working group. So when there is a team of people that come together with an idea, they will work hard for very little. It's kind of creating an entrepreneurial revival if you will. There’s access to a lot of smart people that are extremely hard working. For instance, at HayNeedle we've hired something like 350 people. I'm amazed at the talent level we have around here. Both coming out of undergrad, but also coming out of experienced companies like Union Pacific, and First Data, some really talented programming. Both front end and back end. The talent, in a way, is kind of cooped up. They want to jump out and start their own thing.
Where is there more talent, in engineering, sales, or other areas?
Omaha has been, from the 1960s and 1970s up through the early 2000s, a call center environment because of Strategic Air Command putting big pipes in here. Call centers sprung up everywhere; West Telemarketing, and in-bound out-bound type stuff. So you had this infrastructure for customer service. If you wanted to set up a call center environment, there were thousands of people to choose from that were very talented. That goes on today. I would say there is strength here in back-end support. But front-end developers are a real shortage.
The thing I notice when I look at these startup ideas, it's typically always the tech side of the equation that has the idea, but there isn't anyone to sell it. So how do you get this to market, how are you going to price it? What's the differentiator? It may be great technology but there still needs to be that “how do you execute and sell it?”
For more from this series:
- Why you Should Start a Company in...Austin
- Why you Should Start a Company in...New York
Why you Should Start a Company in...Los Angeles
- Why you Should Start a Company in...Chicago
- Why you Should Start a Company in...Boston
Laura Rich is a freelance writer and co-founder of Recessionwire.