My first brush with what I now call “coastal myopia” came in 1996 as I fruitlessly tried to explain to the Madison Avenue account manager on the other end of the phone line what D Magazine was, and why we might have the temerity to request ad materials for one of our clients. Finally, I found the code: “It’s like New York magazine for Dallas.”
“Isn’t that cute?,” she snickered. “Dallas has a little magazine.”
I found myself in deeper straits when, in 2007, I had a major Palo Alto VC fund on the hook to make an investment in my local media startup, Pegasus News. The hitch? They wouldn’t pony up without a local co-investor to watch over us. The irony? It was my failure to find a viable Texas VC fund willing to invest in us that has led me to make a last-ditch trip to San Francisco to drum up capital. There were only two serious candidates in Texas. One was waning and I couldn’t get the other one over the hump.
Now maybe that was because I was a lousy fundraiser — but the fact that I only had two viable options for that scale of investment at home stacked the deck against us.
I’m pretty well immersed in Dallas’ start-up community, and I’ve noticed a sea change in the last couple years. We may not have the flashy, high-profile buzz-making scene that you’ll find in Silicon Valley (or Alley), but investments are happening. I think that’s partly because we’ve had to make it without the mutli-million dollar seed rounds and gut through on wits and angel investment — not the kind of stuff you find on AngelList, but friends, family, industry pals, doctors, lawyers and oilmen.
My pal Trey Bowles, co-founder and CEO of The Dallas Entrepreneur Center (The DEC), says that by his math there were $40 million in deals in Dallas this summer.
“The VC model is broken anyway,” he says. “The volume of transactions is more important than the dollars on any one.”
Because these deals don’t make headlines, you have to dig into a site like FormDs to see the scale of investment. Run the numbers and you’ll see that the deal volume, if not size, is comparable to what’s happening on the coasts.
And in local, I see another big difference (and perhaps advantage): We don’t build our products to deliver value only in San Francisco.
I was spurred to this line of thought a few weeks ago when a developer friend of a friend posted on Facebook:
(The comments thread contains some interesting analysis too.)
I’ve ranted about this phenomenon for years: The tech press lazily and breathlessly touts a new app that geo-customizes some user experience and could be The Next Big Thing™. Screenshot always depicts something in the Bay Area chock full of whatever data is to be delivered. I download, open and find nada in Dallas, or worse a smattering of Houston places without any user interface cue not to expect any results in my area.
(Maddeningly, when Pegasus News released the first location-aware app and cityguide in the Apple App Store on the first day it opened, complete with transit routes, thousands of events and hundreds of places – and proclaimed its parameters loudly in the “Dallas/Fort Worth” title, we were pilloried in app store reviews because our app didn’t work elsewhere.)
At one point, I started keeping a roster of these local-if-you’re-on the coast apps, but they became so frequent as to be impossible to follow. Seriously, examples abound. An appmaker reached out to me after my last column to show off his app. Might be cool. I couldn’t tell, because he had no significant data for my area. Today’s entry in the local app derby from Techcrunch is Tastemade — an app that, funded with $10 million, delivers a lovely UI and no results closer than 73 miles from my Dallas home.
I get that it takes time to scale and I don’t really blame the appmakers for taking premature press. But an argument you’ll hear me make frequently is that the best UI/UX in the world isn’t worth a dime without good, meaningful, deep data. And that’s the problem that is still largely unsolved.
I’m not ranting just for the sake of it — I have some actionable solutions in mind:
- App makers should test their tools out of town: If it doesn’t work in at least the top 25 markets, you need to do some more work. And if you think a “minimum viable product” only includes a couple cities, then make it clear to the user.
- The tech press should stop being lazy: It’s pretty easy to spoof a location or, in a real pinch, use a writer from another city, to tell whether a company has done a good job of covering the U.S. And, maybe do more roadtrips to check out the startup ecosystems in other markets for more than a day at a time. While not explicitly tech, I found a recent analysis of regional bias in NPR’s coverage validating of my theories that our market gets short shrift.
- Investors should open their eyes to more “middle america” opportunities: Really, is putting a couple million into a well-thought-out startup with a proven entrepreneur whom you like who is out-of-town that much riskier than throwing $40 million at something as daft as, say, Color?
- People like me should quit ranting and make stuff: Maybe it’s an advantage to be off the coasts, without the distractions of VC visits and a major developer meetup schedule that rivals an Alcoholics Anonymous meeting grid. In Dallas, we’ve quietly done pretty well lately. Remember when Zynga bought Words With Friends? Checked out ShopSavvy? Noticed that most of your favorite news apps were built by Bottle Rocket? Caught the buzz on Lavabits, the secure email provider shut down because Snowden was a client? All of that came out of the DFW area. And even on a smaller scale, anytime I find myself wishing for a SAS tool that I think doesn’t exist yet, I almost always find someone in town working on it. Just last month I stumbled upon what I think is one of the most promising local commerce models I’ve seen in a while (prelaunch).
Also, this isn’t really about Dallas – it’s just the example I know best. There are lots of interesting things happening all over the country, in pockets of innovation big and small. Ask Forbes where the best place for business is? Des Moines.
In our hyperconnected world, we should be able to see that the action can be anywhere – but that to scale at anything local, you have to be everywhere.
Mike Orren is the president of Speakeasy, a content marketing and social media firm that is a joint venture between Slingshot and The Dallas Morning News (who is also a client). He is the founder of Pegasus News, which he sold to Fisher Communications (who resold it to what is now Townsquare Media, who resold it to The Dallas Morning News). He has served in senior leadership roles at American Lawyer Media and D Magazine and has consulted for many local media companies, including Examiner.com, CBS Local, and SourceMedia.