Iowa Startup Collective Roundup
Entrepreneurship through the lens of Iowa writers and creatives
One key stat: The new rate of entrepreneurs in Iowa
Lately, I have been digging into data to update the Iowa Innovation Dashboard. One of those statistics originally tracked by the Kauffman Foundation is the new rate of entrepreneurs. The indicator measures the percentage of adults who start a business each month.
In his latest update, UCLA researcher Robert Fairlie shares the Indicators of Entrepreneurial Activity for 2023. Note: This data is different from the number of business filings the Iowa Secretary of State puts out every month, as it uses microdata from the Census Bureau to qualify a new business owner as someone who works at least 15 hours or more in the business.
Where does Iowa stand?
In 2023, 0.19% of the population started a business each month. Or said differently, 190 out of 100,000 adults created a business each month in Iowa.
Compared to some of our Midwest peers, we are all fairly close in percentage and rank towards the bottom of all 50 U.S. states in entrepreneurial activity—Minnesota: 0.17%, Kansas: 0.18%, and Wisconsin: 0.18%.
In the middle of the pack— Nebraska: 0.25%, North Dakota: 0.21%, South Dakota: 0.30%, Illinois: 0.30%, and Indiana: 0.32%. The national average is 0.35%.
What states are the top for the new rate of entrepreneurs? Florida: 0.60%, Texas: 0.47%, and California: 0.47%, had the highest new entrepreneurship rates in 2023.
Iowa and the Nation
Kauffman started to show each state’s data since 1996. As most might remember, the pandemic had a big bump in the rates of people starting businesses. Iowa saw the new rate of entrepreneurs jump to 0.31% in 2020. However, the state’s highest year was back in 1998 at 0.40%.
Nationwide: If you spend time in the report, you’ll find that immigrants start businesses at a much higher rate at 0.67% compared to the native-born population at 0.28%. For ethnicity, Latinx Americans far outpaces Asian, Black, and White at 0.60%. The gender gap in entrepreneurship continues to persist with men starting businesses at a higher rate of 0.44% compared to women at 0.26%.
Changing the Cultural Perception of Entrepreneurship in Iowa
What led to this Substack happens to center around understanding how we can change the cultural perception of entrepreneurship or those seeking it as a career. Iowa has one of the strongest opportunity rates for entrepreneurs starting a business by choice vs. necessity compared to the rest of the nation.
Why do we see a lower rate of entrepreneurs starting a business each month compared to the nation?
The answers vary, but might have to do with a strong work ethic (we are good employees), low unemployment (necessity), risk appetite, and Iowa’s population matrix. Des Moines’ foreign-born population continues to outpace the nation as the fastest growing, however, it doesn’t reflect the rest of Iowa’s mostly native-born and white population.
For a small group of us, it’s why we started to put pen to paper and write. Let’s tell the stories and make sure entrepreneurship is part of the conversation. Iowa has the ingredients and resources for business creation, but we need more people living or moving here to see that their career path can include creating a business. From what we know by way of asking 5th graders the question of “what they want to be when they grow up”, cultural perceptions change after being exposed to a new way of thinking or being.
I’m curious what do you think Iowa and the Midwest should keep, stop, or start as it relates to growing the number of risk-takers and entrepreneurs? Comment below! Thanks for reading and subscribing to the Iowa Startup Collective. Please follow the writers below and share their stories as a simple way to support our work and change the cultural norm in Iowa.
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Following Carbon Robotic’s patent infringement case, Mikayla Mooney tests any founder’s dilemma on whether they should open source the way they build their business or keep innovation protected. There’s no one-size-fits-all answer — but through this great read, an entrepreneur can start to understand how the choice to protect intellectual property or keep it open will be one of their most strategic decisions to make.
Sree Nilakanta shares about the threat to sustainable innovation due to funding cuts at the National Science Foundation and other STEM programs’ impact on international scholars and innovators. He points to how here in Iowa, a state striving to cultivate its innovation and startup ecosystem, the stakes are particularly high.
Story link | The Chilling Effect: Visa Uncertainty & Funding Cuts
In his latest cultural tech founder spotlight, Tej Dhawan uncovers the story behind the duo who leveraged Iowa talent instead of moving a call center to India. Rick Grewell and Sheldon Ohringer came together to start Caleris in 2004, leveraging over 400 Iowa employees while saving blighted buildings from manufacturing woes. Iowa Network Services would acquire their company in 2014, and the pair continue to leave a lasting legacy in startups, prairie restoration, and philanthropy, to name a few.
Story link | Outsource to Iowa, not India
Jay Cooper writes about his hope for the next five to ten years is to see organizations across the state embrace the idea of a statewide ecosystem rather than localized startup communities—that deconstructing the silos will depend on the larger organizations’ willingness to look outside themselves and realize that they are not in direct competition with one another.
Story link | The Hindrance of Silos
Sharing his entrepreneurial journey, Clayton Mooney encourages us to see that it’s never been a better time to build a startup company. By looking at the cost of accessing learning resources and comparing it to the overhead costs to start a company, the reality of turning an idea into a prototype to revenue in less than one month is here.
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IOWA PODCAST CORNER
Building real customer relationships with Lana Fox, CEO & Co-Founder of ClinicNote (The Iowa Podcast, Kaylee Williams)
Lana shares her entrepreneurial journey, highlighting her transition from running an exterior painting business to becoming the CEO of ClinicNote.
Fish Stories with Jackson Kimle (The Entrepreneur’s Ethic Podcast, Kevin Kimle)
Entrepreneurs tell stories. Sometimes fish stories. Kevin’s most recent interview is with Jackson Kimle, CEO of Midland Co., a business that’s developed land-based seafood technology and a business model aimed at scaling shrimp production.
Startup Stories with Claimable (Diana Wright and Tej Dhawan)
Claimable, founded by longtime friends and colleagues Zach Veigulis and Ben Goerdt, is tackling one of the U.S. healthcare system’s most frustrating and painful problems: insurance claim denials.
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