Go North, New Techies
Here’s a very Minnesotan confession: I’m always curious why people move here. Even though I know this is a great place to live and work, and can make a compelling case to anyone about our resources, supportive business culture, and quality of life, I still find myself wondering what prompts a business founder—who could, conceivably, set up shop anywhere—to head north. And stay.
You can read about two recent examples of Minnesota’s magnetism in The Tech 20. Inspectorio and Branch are software startups that came to town to participate in the Target Techstars incubator program, and both decided to stay. I couldn’t help myself; I asked their founders, “Why Minnesota?”
“Minneapolis is the best-kept secret in America for entrepreneurs.”
—Fernando Moncayo Castillo, Inspectorio
“Minneapolis is the best-kept secret in America for entrepreneurs,” says Fernando Moncayo Castillo, co-founder and managing director of Inspectorio, which makes supply chain inspection software for retailers. He and his brother Luis Moncayo Castillo moved here from Ecuador; a second brother and Inspectorio CEO Carlos Moncayo Castillo lives in Hong Kong. They employ 150 people around the world and continue to add to their sales, marketing, and management team at headquarters in Minneapolis.
Inspectorio’s work is bolstered by Minnesota’s cluster of retail innovation, thanks to Target, Best Buy, and 3M, Castillo says. He appreciates that the cost of living is lower in the Twin Cities than it is on the coasts. His family likes it here. He likes the quick flight from MSP to NYC, almost as much as he likes dodging winter by using the downtown skyways. “Everyone says it’s cold, but where I really feel the cold is in New York, when I have to walk outside.”
Most of the $13.5 million Inspectorio has raised comes from investors the team has met locally. But they’ve had plenty of outside interest. Castillo estimates he’s been contacted in recent months by 50 VCs from the coasts.
“Access to money is not based on location. It’s based on results,” Castillo says. “If you’re going to change the world, you can do that anywhere.”
For Branch, that could have been sunny Los Angeles. But when founder Atif Siddiqi moved here two years ago to develop his mobile scheduling service with the help of Target Techstars, he found “an ecosystem of talent”—and opportunity—that extended beyond the incubator program.
“For business-to-business enterprise software, Minnesota is a good place to be,” Siddiqi says. “There are a lot of underserved companies looking to early-stage tech to solve things.”
Siddiqi had two employees when he moved to Minneapolis. Now, Branch employs 50 and plans to hire at least 30 this year. “We’ve been able to relocate people here successfully—from the coasts, from anywhere.” Investors too, he’s found, have an appetite for expanding their geographic reach.
So with many of the usual complaints about Minnesota debunked—our singular focus on medical devices, our talent shortage, and our difficulties competing with desirable locales like northern California—I asked Siddiqi to tell me the biggest hurdle to growing a tech company locally.
“Getting exposure for the opportunities,” he says. “The Twin Cities was traditionally dominated by a large-company culture. But this is a viable place for a startup to succeed and grow.” To that end, Branch is a sponsor of Twin Cities Startup Week, an annual fall event, and mentors other early-stage founders. That’s the kind of investment that builds more than a successful company; it builds community.
Of course, we can’t talk about the local tech community without giving credit to Scott Litman and Dan Mallin. In this issue, senior writer Burl Gilyard profiles the serial entrepreneurs (See Fast Companies), who have not only built and sold three tech companies, they created MN Cup, the nation’s largest entrepreneurial competition. MN Cup also provides a support system for innovation across industries in Minnesota.
Highlighting the vast network Litman and Mallin have built for Minnesota feels like the perfect foundation from which to launch The Tech 20, our roundup of some of the most exciting tech inventions happening across industries in the state right now. Gilyard and digital editor Sam Schaust spent weeks whittling our long list down to 20—a good problem to have. We did it by focusing on tech products and services poised to seriously affect our lives and work in the very near future.
If you know of a person, company, or invention deserving mention on this list, tell us; we’re just getting started. And at the rate that development is occurring, we won’t need to justify “Why Minnesota?” much longer.