Why Omaha Startups are Successful

GUEST MENTOR Julie Mahloch, co-founder of Bloom.com, Omaha: The recipe for building a successful business is pretty universal; you need a good idea, a smart team with strong execution and of course, in most cases, capital. Location, especially in this technology-driven age, isn’t necessarily a deal breaker; however, there are big advantages to starting a business in smaller Midwestern cities. That might surprise some people, but entrepreneurs are discovering that places like Omaha are right in the sweet spot when it comes to building businesses from scratch.
Most of my business history revolves around e-commerce and social media, so that certainly makes location less of a factor, but having GiftCertificates.com, Hayneedle.com and now Bloom.com headquartered in Omaha comes with quite a few perks.

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First of all, while more and more startups are drawn to Omaha, it’s not quite as saturated with competition like New York City or Silicon Valley. That makes new businesses strong magnets for talent who are looking for fresh opportunities. Not only is it easier to recruit local talent, Midwestern transplants on the coasts are often looking for opportunities to come back home, where the cost of living is lower.
This is something my partners and I experienced when recruiting top talent for Hayneedle.com, one of America’s largest online furnishing companies. Just recently, Kiplinger ranked Omaha the No. 1 place to raise a family. Omaha is currently ranked seventh in the 2013 “Top 10 Healthiest Metros for the Housing Market.”
Omaha was recently mentioned by CNN Money as one of the six cities where startups are thriving. That’s because the cost of doing business in Nebraska isn’t as painful as it might be in other parts of the country. Rent and production costs are much lower, giving businesses an edge over their coastal competitors without sacrificing quality.
There’s an incredibly strong work ethic in the heartland. People aren’t afraid to dig in deep and make things happen. The community support for local businesses is also pretty powerful. Omahans are our biggest cheerleaders; I can’t imagine how hard it is to drum up strong word-of-mouth loyalty in larger cities. When we started Bloom — a beauty inspiration photo-sharing site and mobile app that connects consumers to brands and beauty professionals — we had incredible support from the community and local beauty schools, salons and professionals.
Hometown loyalty also contributes to the fundraising process. Omaha has a growing and vibrant capital source, with VC funds like Dundee Venture Capital, Nebraska Global and Nebraska Angels. It’s also drawing larger, multi-billion-dollar firms, like Capricorn Investment, which was founded by eBay's EBAY +0.34% first employee, Jeff Skoll. Capricorn recognized the lively entrepreneurial spirit in Nebraska, looked past the “flyover country” stereotype and set up shop in Omaha.
Not only are investors seeing opportunity, startups such as Bulu Box, the first supplement-subscription sample box company, recently relocated to Nebraska from California to take advantage of funding and all the benefits the area offers.
Omaha is one of the wealthiest mid-sized cities in the country — home to Warren Buffett’s annual Berkshire Hathaway BRKB +0.05% meeting, which draws tens of thousands of attendees. We’re also seeing a surge of energy with Silicon Prairie News’ Big Omaha — a conference that attracts world class speakers, creatives and entrepreneurs to celebrate innovation and entrepreneurship.
Regardless of where your business is based, the key is to take advantage of your community’s strengths. Businesses are thriving in Omaha because it offers a healthy and dedicated talent pool, low living and business costs, community support and growing venture-capital sources.