Sunday, January 09, 2011

Rust Belt Talent Dividend

Silicon Valley is the wrong place for your startup. With Google and Facebook hoarding all the "top talent", firms are looking elsewhere to grow. No surprise to me, the Rust Belt is emerging as an entrepreneurial hot spot:

Just three years later, the 29-year-old Ohio native -- he's the one in the hooded sweatshirt and jeans -- has built an Internet radio software and hardware maker whose customer list has ballooned to include Target, Sears, Costco, and home-shopping big-leaguers QVC and HSN.

Now [Jake Sigal] is set to feature his firm's work at the International Consumer Electronics Show -- the world's largest consumer technology trade show -- in Las Vegas on Friday, showing off the latest Livio Radio products conceived and engineered just south of I-696 in Ferndale.

Livio produces devices that tap into your home Internet and allow you to listen to free Internet radio stations from around the world. It's content you can get for free elsewhere, but his boxes make it easier for the average consumer to simply turn on and press "Play."

Economic conditions here in the Rust Belt proved an important catalyst for Livio, which was able to attract engineering talent in the early days at a fraction of the cost -- all Sigal's start-up budget allowed.

Ironically, shrinking cities are full of greenfield opportunities. Costs are low and talent plentiful. It is ideal for companies such as Livio.

A trend of large scale gentrification is under way. Creative workers can have Brooklyn on the cheap. But the geographic arbitrage is in terms of talent. The supply of employees is more important than sources of venture capital.

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