Revisiting the question of who’s the No. 2 startup in Des Moines
About the author: Geoff Wood is the COO and main connection point in Iowa for Silicon Prairie News, the co-founder of VolunteerLocal and founder of Eggcrates. For more on Wood, see the note that follows this post.
Des Moines startups, Geoff Wood says, can be divided into three tiers: established, rising and emerging.
Last December, I wrote a post asking “Who’s the No. 2 startup in Des Moines?”
In that post, I shared the results of an informal (and unscientific) poll that I conducted around the community to seek out which companies were the "top startups." While Dwolla was a unanimous selection at No. 1, there was no consensus on No. 2 or even what makes for a "top startup." The folks I talked to clearly felt like Dwolla was doing the correct things to be at the top even though most people didn't necessarily have a concrete opinion on what those "things" were. It seemed it was Dwolla and then everyone else.
Fast forward to today, and progress within the local startup scene has helped bring greater clarity to the question I posed in December. Rather than defaulting to one company to characterize the startup community, I see that three different tiers have developed. I'm calling them "established," "rising" and "emerging."
Established Tier: Dwolla, WebFilings, Social Money and Banno
Starting at the top, we have the "established" tier. While I recognize that "startup" and "established" may seem contradictory, these companies are the most mature tech startups in the area. They're making news inside and outside the region with their technology, and most have raised significant external capital. They’re all frequent winners of the Technology Association of Iowa’s Prometheus Awards. They each have more than 25 employees, and they're looking to add more. Not coincidentally, each has seen the need to open a second office.
This group all comes from one industry: financial tech. While it’s too early to call this an economic cluster, it makes sense that one would develop in what has always been characterized as a finance and insurance town.
Rising Tier: Goodsmiths, Torsion Mobile, Hatchlings, FreeBeeCards, BitMethod
The most interesting ones to keep an eye on may be these companies in the middle tier who are on the rise. Their headcounts generally range from 4-10 employees working full-time on the product. Many of these companies are seeking external capital or have some level of angel investment already secured. They have a dedicated office, have launched their product and should be seeing some revenues.
Interestingly, this group represents both very new companies like Goodsmiths and FreeBeeCards and those who have been around awhile like Hatchlings and BitMethod. The latter two join this group due to significant efforts in the past six months to refocus their team around new product.
Emerging Tier: Everyone else
I’m calling the final tier “emerging.” These are the companies that are just, well, “starting up.” Many are still ideas, and others are side projects being worked on at night and over weekends. Some have started their trek towards “rising” with founders and early team members taking the risk to make a go of it full time.
While the total number of startups in this tier is impossible to nail exactly, I’d estimate that we have several dozen on our radar. A few making recent moves are ShareWhere (recent team expansion), Tikly (great national press coverage) and Bawte (launched with Kum & Go as a marketing partner).
I wrote in my December post, “In many ways, the Dwolla of (November 2009) isn't the Dwolla of today,” referencing how fast the company had evolved since we first wrote about it. That sentiment holds true today not only for Dwolla but for each of the startups in the top two tiers.
Which “rising” startup do you see cracking the “established” tier first? Which “emerging” startup will be next to join the “rising” tier?
However things shake out, it sure is exciting to watch.
Credits: Photo from Government Press Office on Flickr.
About the author: Geoff Wood is the COO and main connection point in Iowa for Silicon Prairie News, an organization working to increase the notability of the Silicon Prairie region – Des Moines, Omaha, Kansas City and surrounding area – as an innovation center and startup hub. In addition to a daily news blog, the Silicon Prairie News team also produces events like Thinc Iowa and Big Omaha. Wood helps organize Barcamp Des Moines and DSM Startup Drinks.