It’s been nearly three years since we sat down and talked about building a startup incubator in Des Moines.  It’d be fair to say that in the last three years, we have been through multiple chapters of the journey and have learned and grown and pivoted a bunch.  We pride ourselves on being very low ‘spin’, so what follows is going to be a pretty sober reflection of the entrepreneurial climate in Iowa, specifically Des Moines and StartupCity Des Moines.

Chapter one, more of a preface actually, could be summarized as a year of talking with friends and colleagues and raising money.  This is the part that few people saw as we were trying to get a home for StartupCity, as well as dancing around the rather contentious politics in this space in central Iowa.  We were fortunate enough to draw the support of the City, County, State and Greater Des Moines Partnership, as well as a number of mentors who leaned forward to guide and counsel the startups.

Chapter two was the creative energy of conception.  We opened our doors in October 2011 with Tikly, Present.io, PikuZone, Meidh, and ShareWhere.  Real Estate Fan Pages joined us shortly thereafter as did, for a brief turn, MyLocalCoop.  Applications we received during the fundraising year plus the initial opening were considerable, and we turned away many ideas lacking efficacy to the incubator or mentors. While the economy was in a mode of recovery, the entrepreneurial activity remained on a upswing. We also created StartupIowa during this time, and had a number of events and new tools that we created as a result.  The local and national press, led by Marco Santana at the Des Moines Register and Kyle Oppenhuizen at the Business Record were able to give voice to the stories of Iowa technology entrepreneurs. Things got rolling.

What was evident during the first year was that the nascent companies’ struggle to either execute on product development, marketing and sales , and ultimately capital.  Our initial provision that people focus 100% on their startup proved unrealistic as entrepreneurs worked multiple ways to make ends meet.  We had, at an early juncture, decided that we would rather see a vibrant private seed and angel investor community thrive rather than the incubator subsidize the startups with seed capital. The seeding model is the model at most accelerators.  Many of the startups in SCDSM had side work that provided needed income, but those other commitments often turned their startups into hobbies, or moonlighting.

Another element visible during the first year was the open-ended time allotted for the startup to be built. Nationally, accelerators allot 12-weeks for ideas to go from presentation to demo-day, an event billed as a way for the nascent company to demonstrate a pilot product, announce a pilot customer, present a pitch-deck and possibly deliver a minimum viable product.  Though we differed in initial seed investment and this arbitrary 12-week window from other accelerators, we are not indicting the model quite yet as the discussion on accelerator viability nationally is pointing to flaws in the competing model concurrently. With the number of successful companies graduating from accelerators remaining at a very small count, there is still a search for the optimal model.

Chapter three saw the upswing in the national economy and the city return to its negative unemployment in the tech sector. As the economy began to improve during StartupCity’s second year, individuals seeking entrepreneurial ventures found lucrative job options surface and applications to the incubator dropped.  We responded by doing two things:  First, Tej and Christian worked with Mike Colwell at the Greater Des Moines Partnership and Brown Winick Law Firm to develop the Plains Angels investment group.  This filled a large hole in our local funding ecosystem of bankers and (few) venture firms.  Second, we added co-working to StartupCity in order to drive more density of entrepreneurs in the same physical space.  We have always believed that successful companies come from good ideas being sharpened by contact with other smart entrepreneurs, and wanted to ‘increase the heat’ and energy in the incubator. Several entrepreneurs, previously working from home offices found this option useful and became a part of the StartupCity co-working environment.

We also stepped forward and made some hard decisions.  We lost or let go a number of startups from the incubator for a myriad of reasons.  We revisited our mentor pool and narrowed it down to active participants.  We rebooted our events and curriculum.

While watching the events roll at neighboring incubators and co-working environments, this became the hardest chapter.  One of the basic tenets in Brad Feld’s book, Startup Communities, is that entrepreneurial ventures are best seeded by and led by entrepreneurs themselves. We are painfully cognizant of the dearth in our community of that particular asset. The recent adoption of the orphaned Big Des Moines conference by local entrepreneurs shows the dearth disappearing and the signs are pointing to a growth in the entrepreneurial assets of this ecosystem.

We are just now opening the page on our fourth chapter.  We have one more year of funding that can fund operations of StartupCity DSM through September 30, 2014. A great number of supporters remain committed to the long-term vision that has been in motion for three-plus years. A number of co-working companies make their home at StartupCity and interested parties communicate their interest in learning about our model from near (Midwest) and far (Europe, Asia).

As Techstars pivoted by adding Hackstars, Plains Angels pivoted in its membership, Startup America pivoted by merging with Startup Weekend, and Startup Weekend pivoted by adding Startup Weekend NEXT to its service offering, so has StartupCity. Passing the torch is as welcome to this industry as a pivot and StartupCity’s fourth chapter is sure to see one or the other.

–Tej and Christian

Edited: corrected date to Sept 30, 2014