Annual Report: Big Companies Techies Can Spin Off From

Adam D’Angelo, an ex-Facebook employee who founded Quora in June 2009, spoke at Y-Combinator‘s Startup School earlier this year. Photo by Ernest Semerda via Flickr.

Over this next month, we’ll continue to expand on each of the items that are to be included in the upcoming “Silicon Prairie Annual Report,” which we’ve described as a “look back at the previous year in the Silicon Prairie region, taking into account such metrics as company formations, product releases and developments, investment and M&A activity, and community building.”

Today, I’m going to jump ahead to number four in our “Six Tenets of an Entrepreneurial Ecosystem”:

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Culture of Risk Taking
Wild, Almost Naive Ambition
Access to Capital
Big Companies Techies Can Spin Off From
Universities
Vibrant Social Scene

Right off that bat, I know that our region will struggle a bit with this tenet. Sure, we have big companies. According to the Greater Des Moines Partnership, our top five are Wells Fargo, Principal, Iowa Health, Mercy Medical and Nationwide. The Greater Omaha Chamber ranks Alegent Health, Offutt Air Force Base, Omaha Public Schools, Nebraska Medical Center, and Methodist Health as Omaha’s top five.

The question is, can they help spur innovation? Do they contribute to the entrepreneurial ecosystem in a positive way?

Many of each city’s top five fall into the industries I wrote about in our post last week – insurance and financial (see: “Annual Report: Culture of Risk Taking“). They’re bolstered on this list by healthcare companies (Iowa Health, Mercy Medical, Alegent Health, Nebraska Medical, and Methodist Health) and government entities (Offutt Air Force Base and Omaha Public Schools).

While these aren’t the types of companies that regularly spin off tech companies (see: companies founded by former Googlers and ex-Facebook staff in Silicon Valley in the last few years or even further back in the Seattle-area from Microsoft alumni), it can happen, albeit often indirectly.

(Left: The “what startups founded by ex-Googlers” question was posted on Quora, the site created by ex-Facebooker Adam D’Angelo.)

One example on the Omaha front is Êelios Inc., a technology offshoot of 21st Century Systems, a software company that has grown from defense technology that was refined at Offutt Air Force Base. Offutt, itself, didn’t spin this technology out but it wouldn’t have happened here if not for the presence of the base.

Here in Des Moines we frequently write about SmartyPig and Dwolla, two financial services startups. While neither company spun out of a local bank, in my opinion, it’s no coincidence that the ideas were formed and executed in a city that is known for finance.

I asked SmartyPig co-founder Mike Ferrari about this over a year ago and he said Des Moines is a “hub” for technology in his industry:

I don’t think that people really truly realize the technology hub that we have here in Des Moines through certainly the financial industry and the insurance industry and all the resources that come together here

We’d like to hear from you: Do you know of technology companies that have “spun out” of larger companies anywhere in the Silicon Prairie?

I started this post with the top five largest employers in each city but I don’t want to discount other large companies which are more technology or research driven, such as First Data and PayPal in Omaha or Meredith Corporation and Pioneer Hi-Bred in Des Moines. Please leave your thoughts in the comments below.

While you’re at it, take a few minutes and nominate someone for an “Innov8 Award” who you know led or has been a part of a startup that spun off from a big company.