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Smaller cities can build a robust startup ecosystem if they work together

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Omaha, the largest city in Nebraska, sits on the state’s eastern border. Head west on I-80 for 45 minutes and you’ll hit Lincoln, Nebraska’s second largest city. Both cities have burgeoning tech-startup scenes, are raising capital and funding, and are making impressive contributions to the Silicon Prairie as a whole.

But what the two cities haven’t figured out yet is how to work together to share these resources in a way that works to the advantage of their individual strengths, while also raising the profile of the entire state and region.

“I feel like you look at other cities and hubs, for example, Minneapolis and St. Paul, or even Indianapolis, Cleveland, and Columbus, there’s some sense of collaboration,” said Jeff Slobotski, founder of Router Ventures and a well-known startup-community builder within Nebraska. “It’s surprising to me that with how close in proximity Omaha and Lincoln are, and the assets that they each have, that we haven’t worked closer together over time.”

Omaha and Lincoln each have their own incubators, supportive chambers of commerce, corporate giants, and state and private university campuses with innovation centers. But Slobotski feels that those efforts could be more strongly connected to one another, especially when it comes to the universities and large corporate leaders.

“I don’t feel like there’s strong enough collaboration within the university systems,” says Slobotski. “[Collaboration] has to be modeled. […] Decisions have to be made at senior levels within corporations and university systems to say ‘We want this to be an important component of our ecosystem.’”

With four Fortune 500 companies and nine Fortune 1000 companies, Omaha has a huge pool of corporate resources. Lincoln, on the other hand, is a larger source of tech talent sourced from graduates of the nationally known University of Nebraska Lincoln and its programs through the Innovation Campus and the Raikes School.

“Lincoln doesn’t need more. Lincoln has a university that cranks out programmers by the dozens, thinkers by the dozens,” says Nate Watson, president of Omaha-based Contemporary Analysis (CAN). “What [Omaha has] is big city thinking, access to capital, and access to sales talent.”

CAN helps startups, Fortune 500 companies, and political campaigns stay ahead of problems through predictive analysis of data. Watson has studied both Omaha and Lincoln’s ecosystems and has built an understanding of each city’s strengths and weaknesses.

“Lincoln has been producing great product-based startups for decades, and Omaha produces great services companies,” says Watson. “If there was a way for us to partner, it would be taking products that are built in Lincoln and selling them in Omaha. […] We need to offer them access to global markets instead of letting them go to Silicon Valley.”

Watson also believes that the disconnect between how the cities view themselves and each other is causing a roadblock. Neither city is exactly small or large, but their individual mentalities differ greatly.

“We think Lincoln is just a smaller version of Omaha, but it’s not,” says Watson. “We love Lincoln, but Omaha is a small big city and Lincoln is a big small town. Until we fix the relationship and we offer [Lincoln] the things they need instead of trying to offer them more of the same, it will never work.”

Grant Stanley, CEO of project planning startup Bric, echoes Watson. As a business owner based in Omaha who seeks out customers in Lincoln, he’s seen how the two cities lack connectivity through that division of small town/big town mentality and community.

“Omaha and Lincoln have two very different goals,” said Stanley. “If you’ve made it in Lincoln, you stay in Lincoln. If you make it in Omaha, you move, and that’s one of the really frustrating things about Omaha. In Lincoln, you can build community.”

Stanley says he’s seen a trend where startups growing out of Lincoln bypass Omaha altogether and head to larger regional cities or the coast instead of seeking help from their neighbor. Lincoln doesn’t see Omaha as a source of help or as a “big city” that is interested in or capable of leading them both.

“I think once Omaha steps into that role [of big city leader], we could work with Lincoln again because we could provide the ‘big city-ness’ that companies in Lincoln really need to be successful,” says Watson. “We have to get that relationship right in order to start building it.”

These issues aren’t unique to Omaha and Lincoln. Across the Midwest, small startup cities that are in close proximity to one another are often tempted to compete against their neighbors to gain ground. (Think cities like Dayton and Cleveland competing to land Amazon’s second headquarters.) But with populations and densities well under those of their coastal counterparts (Omaha and Lincoln’s metro populations combined are under 1.3 million), very few would disagree that these cities couldn’t go further together.

“One of the top indicators of a vibrant and successful ecosystem is density. It’s challenging when you look at that,” says Christina Oldfather, director of innovation and entrepreneurship for the Lincoln Partnership for Economic Development (LPED). “How do you bring these two communities [closer] to bring collisions? Everybody knows that we’re all going to benefit, but it’s the actual implementation. Figuring that out is key.”

Oldfather says there are a few things that can be done, like reducing duplicate efforts, really looking at the infrastructures of the two communities, mapping their resources, and identifying how those resources are readily accessible to entrepreneurs.

“I do think it makes sense to [look at the growth and maturity of the ecosystem] on a regional level,” says Oldfather. “I think it’s going to make us continue to think more outside the box and reach for opportunities, kind of like us punching above our weight, so to speak.”

Oldfather agrees with Slobotski that universities and corporations can take some of the lead on fostering collaboration between the two cities, but entrepreneurial ecosystem community builders will also have to play a big part. She also thinks that the startups themselves need to put their grassroots mentality into action.

“Everyone recognizes the importance of ‘you succeed, we all succeed,’ and that while some of the resources may be somewhat scarce, using them correctly definitely means that there’s more for everybody,” says Oldfather. “Everybody in Nebraska really wants to see others succeed; they bend over backward to help. I think that really resonates strongly in our community.”

Christine McGuigan is the managing editor of Silicon Prairie News, a publication that highlights innovation and entrepreneurship in Nebraska, Iowa, Kansas, and Missouri.

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