Why do you think that is the case in the Midwest and how would you see it changing in the short /medium term?
edit: I ask this because in Portugal we also lack the entrepreneurial mass to match the tech talent.
edit: I ask this because in Portugal we also lack the entrepreneurial mass to match the tech talent.
The problem is what you'd expect in fact: network effects, hyper concentrated talent pools, extraordinary expertise, very large amounts of capital tilted toward higher risk / higher return pursuits.
If you're in Kansas and have the next big tech idea...
- If it requires significant venture capital, you're not going to be able to locate that capital in Kansas. The capital available in Kansas, isn't interested (it's only interested in hindsight; Silicon Valley capital is actually often interested a decade or two before an idea / business concept is ready to boom, which produces a constant cycle of being early with things, which finally only work years later). If you're in Kansas and need to raise $100m or $300 million over six years to build the next great fast growing technology business, you will not be able to find that scale of VC there, period. I can't emphasize that enough, there is no scenario under which you will ever raise that capital in Kansas - it did something like $13m in total traditional VC deals in 2016.
- If it requires the most talented engineers (and lots of them) to scale big + fast (ie the engineers that are among the best in the world at that thing), you're not going to find that talent in Kansas. The hyper concetrated talent pools available in California, give you that critical mass for almost any given technology focus. You see similar effects for eg biotech in the greater Boston area (which gives that area vast advantages for the next great biotech start-up as opposed to somewhere in Ohio).
- If you need exceptionally talented managers, with experience at building large, fast growing, cutting-edge technology companies. You're not going to find very many of them in Kansas. There's an immense experience advantage in Silicon Valley, generations of it has built-up in fact. These people make a critical difference during any kind of meaningful ramp growth phase.
- If you need the world's best venture capitalists, to help steer your new tech company through all the typical dangers for such a company, you're not going to find them in Kansas. The best VCs can help you recruit in a huge way, for both executives and engineers; they can steer you through all sorts of problems in fund raising and public relations; they can push through political obstacles with their connections and wealth (ie pick up the phone and get someone politically powerful in Washington DC on the other end of the line). A VC in Kansas has no ability to do most of those things.
The list just keeps going.
In short: the risk capital isn't there, the hyper concentrated large talent pools for a given expertise are not there, the management experience is not there, the venture capitalists are not there. There are plenty of entrepreneurs to go around, and if they want to create the next great tech company they usually have to leave for all the previously listed reasons.