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Will more startup hubs help or hurt Omaha’s startup scene?

Omaha startups aren’t clustered in one area like most succesful startup communities. Instead, the community is spread out all over the city. Here is a map of some of the startups “hubs” in Omaha.

The announcement of a proposed Technology Village at Crossroads near 72nd and Dodge streets in Omaha has brought equal parts excitement and concern from community members worried about density and the health of a dispersed startup community.

While some startup communities carve out an area of town with surgical precision, Omaha seems to be using a shotgun approach. 

By 2017, there could be five or more tech or entrepreneurial “hubs” in Nebraska’s largest city. Many of them would be many miles apart.

Among them:

  • The Mastercraft in North Downtown, where Flywheel, MindMixer and support services live.
  • Aksarben is home to SkyVu and Scott Technology Village, an incubator for tech businesses, Interface School and Straight Shot accelerator. 
  • A renovated antique store at 39th and Farnam that could house 10 startups or small businesses when it opens later this fall.
  • The proposed 100,000-square-foot “Technology Village” at Crossroads. 
  • Rumored to be in the works, two other tech/startup-centered developments elsewhere in the city.
  • Various co-working spaces, incubators and accelerators also are throughout the city. 

The proliferation of entrepreneurial hubs around the city makes it harder to create startup density in any one place, preventing the serendipitous interaction that entrepreneurs thrive on, says Dusty Reynolds, the entrepreneurial director for the Omaha Chamber of Commerce.

Reynolds (right) and other leaders in the Omaha community are excited developers are embracing entrepreneurs and startups as part of their developments, but worry there aren’t enough Omaha startups to saturate any one of those hubs.

Omaha is on the path to an identity crisis.

Startup leaders like Brad Feld, author of “Startup Communities,” regard density and the resulting “random collisions” as a one of the many driving factors in a successful startup community.

Lincoln is a good example of this with nearly two dozen startups all at the same intersection in the historic Haymarket.

Nathan Fryzek, executive director of Fuse Co-Working, said the community has it easy in Lincoln. Most startups and support services are within walking distance.

“If I need anything, like design for a business card or flyer, or I know someone who needs help with code, odds are there is someone within the building or across the street who can help.”

Just like cities plan their growth and development, many leading minds in the startup world think startup communities need deliberate and thoughtful planning by entrepreneurs.

Atlanta and other cities are also experiencing the same problems with multiple hubs.

Shane Reiser, co-organizer of One Million Cups Omaha/Lincoln and founder of Startup Genome, says a community can survive with five or six tech hubs, but it isn’t ideal and none are likely to thrive. 

“We will continue to hobble along if we have five different areas, but if we wanted to come together we have to do it in one area,” he said. “Sure, we have a community, but if the goal is to grow and strengthen, then we would benefit by pulling people together.”

A grand plan for dozens of startups, fast Internet

Developer Rod Yates of OTB Destinations finished the successful Gretna Nebraska Crossing outlet mall project last year. 

Now he’s hoping to redevelop another suffering Nebraska property, the nearly-vacated Crossroads Mall at 72nd and Dodge.

He hopes to craft a Tech Village that will lure dozens of startups. It will come with 10-gigabit Internet from CenturyLink.

Reynolds said that amount of bandwidth is so unheard of that “it’s almost silly.” He said it’s a major advantage of the project.

The Tech Village would be on the top three stories of a four-story building with ground level retail and aims to bring medical and technology startups and early-stage companies, according to the Omaha World-Herald, which covered the project in February.

This photo, taken in 2008, shows the empty storefronts of the once-popular Crossroads Mall at 72nd and Dodge.

The Village is a part of the larger $400 million redevelopment of the Crossroads Mall. It calls for demolition of the mall and building new restaurants, new-to-market retail like REI, a boutique hotel, apartments and offices.

While many of his projects have some technical aspect—the Gretna mall came with free public WiFi and a mobile app—it appears it’s the first time OTB has done a tech village.

There doesn’t appear to be a similar project on OTB Destination’s website

Yates (right) didn’t respond to voicemails requesting more information.

Construction could begin as early as this summer if voters approve a $50 million bond issue on May 13 to pay for the public utility work, the World-Herald reported.

The city signed on for $161 million of incentives while $235 million of private money would be used.

The Tech Village would likely open in June 2016.

Feld hypothesizes entrepreneurs, not property developers, should lead entrepreneurial communities. 

“Central, top-down planning… doesn’t work. Hierarchical planning, whether driven by government, university or other organizations doesn’t work. There is no president of a startup community,” Feld told Atlantic Cities in 2012. “Startup communities are networks—glorious in all their messiness and chaos. However, they aren’t simply organic phenomena. You have to have leaders who are entrepreneurs.” 

Reynolds of the Omaha Chamber said he also backs the idea of entrepreneurial-led communities. 

“The idea of creating a development with startups in it is highly romanticized right now,” he said, pointing to another developer, Lund Company that’s also working on a startup project.  “Three to four years ago, if you approached a developer about making a tech village, you’d get a pat on your back and told that was a cute idea.

“But now, young entrepreneurs and those types of people are the ones people want in their developments. I don’t blame anyone for trying it out, but I just hope its best for the entrepreneurs. I just don’t know yet. Given how immature Omaha is right now, I can’t say we can afford multiple hubs.” 

Different communities came together in unique ways

Reiser doesn’t see a grand plan. He doesn’t see a startup hub emerging in Omaha.

The co-founder of Startup Genome, a site that tracks and maps startups around the globe, has lived in Seattle, Des Moines and more, but in Omaha, he doesn’t feel the same gravitational pull of any physical location.

“When I think of a startup ecosystem, I think of a place. In New York, that’s General Assembly or WeWork, in various cities or StartupCity or Amici in Des Moines. We don’t have an agreed upon place where everyone is in Omaha. And we need that.” Reiser (left) said. “We have Mastercraft and a bunch of stuff there, but it’s behind the curve in terms of what’s in and around it. It’s not a conducive area for bumping into people.

“When people come to town to visit or a freelancer asks me where to post up for a day, I don’t have a good answer for them.”

Reynolds, of the Chamber, says North Downtown has incredible potential ahead. 

Reiser said Aksarben could be a good choice with a central location, proximity to the University of Nebraska at Omaha and plenty of apartments, a smoothie and coffee shop and entertainment. He also sees promise in the Crossroads development. 

Every city has had a different path to finding its “sweet spot” for startups. Some depend on leadership in the community while other cities, like Kansas City, came together because of another outside force: Google Fiber.

Fiber brought together a close-knit community that congregated within a few blocks, called the Kansas City Startup Village.

In Lincoln, the Haymarket serves as the major hub with nearly two dozen startups at one intersection because rents were cheap above first-floor restaurants when the trend began. 

And Des Moines boasts StartupCity, an entire floor of the Bank of America building downtown, dedicated to co-working and incubating startups. It was started by a local entrepreneur who saw others entrepreneurs struggle to get off the ground.

“The biggest factor of success is it has to be led by entrepreneurs,” Reiser said. “We’re missing a lot of that here.” 

Matthew Marcus and others have helped do that in the Kansas City Startup Village, along State Line Road, where more than a dozen startups live. 

KC, like Omaha, is a sprawling city and it’s easy for people to be separated by distance, Marcus said. So when they started, KCSV’s primary goal was to purposefully create density. 

One of the first public installations of Google Fiber, the bungalow on State Line Road, helped spur a dense community of startups known as the Kansas City Startup Village.

“We wanted collisions and knowledge share,” he said. “With all these startup spaces in bungalow houses across the street, down the street, it’s been really easy to pop across and ask a question.

“The stats are clear— the startups and entrepreneurs who go through an accelerator or incubator have a higher success rate than those operating out of a basement in their own silo. Same goes for a dense hub of startups. So why not increase your chance of success and be close to others doing the same thing?”

KCSV’s residential area plays into urban studies guru Richard Florida’s theory that density has its advantages and grooms a more productive, more innovative and more energy-efficient city.

An area like KCSV succeeds because it is a 24/7 area where entrepreneurs live and work. 

It also is very small in proximity, which “Startup Communities” author Brad Feld says is essential to his startup ecosystem in Boulder, Colo., and even maintaining communities in larger cities.

Feld writes: “While population is one measure of density, I’ve also started thinking about geography as another. In the case of Boulder, the core of the entrepreneurial community is in downtown, which is a 10-by-4 block area. Downtown Boulder is small, you can walk from one end to the other in ten minutes. And, inevitably, when I walk across town I always bump into people I know. When I stay in New York, I generally stay within walking distance of Union Square. Sure, I end up in midtown or downtown occasionally, but most of my time is spent in a 20-by-8 block area.”

In Lincoln, the hub is at 8th and P in the Haymarket. 

Brian Ardinger, of Lincoln’s NMotion accelerator, said it’s not necessarily like that in other communities. He said while multiple hubs isn’t ideal, communities can overcome the distance barrier with great communication.

“We had a dinner with startup people in a major city where there were two major startup hubs and they had never spoken to one another before,” he said. “They’re working on communication now.”

Reynolds hopes communication will bind the upcoming Omaha hubs together. 

“It’s a good sign to have developers interested in startup communities, but I wish there was more collaboration (on the front end).”

 

Credits: Reynolds, Reiser headshots from Twitter. Crossroads Mall photos from Flickr. KCSV photos from Silicon Prairie News. Startup Communities book cover from Amazon.