Nebraska’s becoming a better place for entrepreneurs, according to a new report. Today’s NET News Signature Story examines the pros and cons of Nebraska’s environment for entrepreneurs.
Nebraska's State Entrepreneurship Index Rankings
2005 - 32nd
2006 - 33rd
2007 - 36th
2008 - 29th
2009 - 20th
2010 - 22nd
2011 - 24th
2012 - 16th
CLICK HERE for the full State Entrepreneurship Index report from the UNL Bureau of Business Research
“Basically what it does is it creates and generates content in a company’s voice for social media posting,” Holly Petersen said.
In other words, helping companies come up with a steady stream of content for their customers on Twitter and other platforms. Petersen said starting companies and creating products is something relatively new for her. She left corporate risk management and human resources to join her husband in these ventures. It’s not easy.
“When you’re an entrepreneur you get yourself out of bed every day,” Petersen said. “You kind of make your own destiny and you decide what’s priority. You’re the one creating your paycheck.”
With Cinnamon Post, they had a little help. Last year they were chosen for NMotion, a Lincoln-based start-up accelerator program. That meant an opportunity to present Cinnamon Post to a group of investors, mentors and community leaders. It also meant a little seed money and expert advice.
Lincoln supports entrepreneurs exponentially compared to many other communities that I’ve lived in before,” said Petersen, who has also lived in Atlanta, London, Dallas and southern California.
That support extends statewide, according to University of Nebraska-Lincoln economist and Bureau of Business Research director Eric Thompson.
“I think it’s a state where people have a good understanding of entrepreneurship,” Thompson said, “and understand that it includes failure as well as success. So I think we’re an accepting and welcoming place for entrepreneurship in that sense.”
“I see people really willing to help each other,” added Theresa Welbourne, director of UNL’s Center for Entrepreneurship, “and probably much more than I’ve seen in other communities. Seeing your entrepreneurs (who are) helping junior entrepreneurs (who are) helping students, and they’re getting things done.”
Experts say this is one reason Nebraska has become a better state for entrepreneurs, at least according to the latest yearly study by the Bureau of Business Research. Nebraska ranks 16th in the State Entrepreneurship Index for 2012. That’s the highest-ever position for the state in this measure that’s been around since 2005. In past years Nebraska has ranked anywhere from 36th to 20th.
The index is made up of components that measure things like how much entrepreneurs make, how many new businesses and how well they’re doing, and numbers of patents. Thompson says Nebraska jumped ahead of a lot of states because we were especially strong in measures of new business formation and new business success. This happened during a time when Nebraska’s overall economy was healthier and impacted less by the recession than other states. But Thompson said even if the state’s jump in the Entrepreneurship Index is temporary, it makes an important point.
“If we can get things right in Nebraska, if we can make our economy stronger, we have the potential to become one of the more entrepreneurial places in the country,” Thompson said. “We’ve at least shown that we have potential.”
“We’re very strong in transportation, a very entrepreneurial state in transportation,” Thompson added. “We’re very strong in finance and services. A lot of people are starting manufacturing businesses; some of that is related to agriculture, some of it isn’t. A lot of people are developing successful technology business, but perhaps not at the rate as a number of other states.”
There are challenges for entrepreneurs in a less populated state.
“It’s going to be a little harder for us to find mentors for specific industries if you have a niche, and that’s just a numbers game,” said Sam Nelson, associate director of UNL’s Center for Entrepreneurship. “Is that something I think is holding us back now? No. I think just getting over the stereotype that the rest of the country has about Nebraska can be a down side.”
But Nelson sees these downsides having less and less of an impact.
“If you want to be in more of the flashy place where there’s more going on, then you’re going to have to get out to one of the coasts,” Nelson said. “But if you really just want to make a go at starting a business, you want to find a mentor who can help you and you want to find capital available, it’s all here.”
Money available for entrepreneurs is a pro and a con in Nebraska.
“I think there’s money for start-ups. There’s not as much of venture capitol community here as you might see in other states,” Welbourne said. “If you look at the East Coast and the West Coast, you’ve got professional or private equity venture capital firms that are bringing a lot of money to the table, and we don’t have as much of that here in Nebraska. There’s a lot of seed money. So there’s a lot of opportunities for people when they have their initial ideas.”
“One thing that makes those states that are entrepreneurial, sort of magnets for entrepreneurship, is they have deep pools of venture capital and angel investors,” Thompson added, “and not just people with money, but people with expertise to help. We have people like that in Nebraska, but perhaps not in the abundance that you see in states like Massachusetts or Texas or California, or even the Minneapolis area. I know that’s something a lot of people in the state are working on and we’re making strides, but that’s an example of something that probably can only change slowly and improve slowly.”
“I think we have quite a few things going for us,” Thompson continued. “We’re not a center for entrepreneurship like maybe northern California would be or the northeast or Texas. I don’t know that we have entrepreneurs moving here from other states. I think we have our own entrepreneurs here in Nebraska.”
Like the Petersens, and their digital marketing company. Holly Petersen says they like the support they’ve gotten in Nebraska, and the attention.
“Here in Lincoln and the surrounding area there’s a little more recognition when something starts-up. People are like, ‘oh, wow, what are you doing?’ They want to talk to you about it. They want to know. They want to see you succeed.”