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Does Silicon Prairie Include South Dakota?

The New York Times identifies the "Silicon Prairie," an area in the center of America seeing increased capital venturing into tech start-ups:

From Des Moines to Omaha to Kansas City — a region known more for its barns than its bandwidth — a start-up tech scene is burgeoning. Dozens of new ventures are laying roots each year, investors are committing hundreds of millions of dollars to them, and state governments are teaming up with private organizations to promote the growing tech community. They are calling it — what else? — the Silicon Prairie.

Although a relatively small share of the country’s “angel investment” deals — 5.7 percent — are done in the Great Plains, the region was just one of two (the other is the Southwest) that increased its share of them from the first half of 2011 to the first half of this year, according to a report commissioned by the Angel Resource Institute, Silicon Valley Bank and CB Insights.

Fifteen to 20 start-ups, most of them tech-related, are now established each year in eastern Nebraska, a more than threefold increase from five years ago, according to the Omaha Chamber of Commerce. Today, there is more than $300 million in organized venture capital available in the state, as well as tax credits for investors; six years ago there was virtually none, according to the chamber [John Eligon, "Tech Start-Ups Find a Home on the Prairie," New York Times, 2012.11.21].

The big question: did the Times misplace the northwest vertex of that triangle by a couple hundred miles? Can we include Sioux Falls and southeast South Dakota in the Silicon Prairie? And if not, what do we (and all those eager DSU graduates) need to do to draw that venture capital here and provide more high-tech job opportunities?

One other note for those of you who still haven't taken down your Romney-Ryan iconostases: many of these start-ups depend on angel investors, folks who drop seed cash in ambitious dreamers' pockets on the hope that good things will come. With all of our burgeoning wealth, South Dakota ought to have plenty of angel investors looking to float more boats on their rising tides.

But whoever's giving the helping hand, public or private, you guys in the Silicon Prairie didn't really build that, did you?


  1. Scott Meyer 2012.11.26

    You'll be happy to know that John was one of the original contributors to Silicon Prairie News so we can definitely say it extends to SoDak. The challenge is there has not been enough activity in the state to warrant a "South Dakota" edition. There are great minds working on this but it takes a whole community, so let's get to creating and force ourselves in to the Silicon Prairie instead of asking for permission!

  2. John Meyer 2012.11.26

    Great post Corey! I think the only thing that's stopping us from joining the ranks of the "Silicon Prairie" is ourselves.

    We need some champions in the region to 1) build great companies/products and 2) lift up the other entrepreneurs and creatives of the region.

    Then as you said, the second part of the recipe is finding those Angel Investors and pumping some cash into the region to develop and scale our startups. We're on our way!

  3. Owen Reitzel 2012.11.26

    Good post Cory. As a person who's job was outscourced to India, I'm going back to school to take up computers. I'd like to see this happen by the time I graduate.

  4. Douglas Wiken 2012.11.26

    Eastern Nebraska phone center hub may also help internet-related business.
    South Dakota university system patent and idea grab discourages student invention and work with the system. Profs tell their students not to share ideas because the state will claim a percentage if idea works out.

  5. tonyamert 2012.11.26


    Your statements about the SD university system idea grabbing are just factually incorrect. The SD system only impacts patentable intellectual property. 99% of businesses do not have or create any of that. Most products don't have it. It's very unique to actually generate it and patenting it/protecting it is incredibly expensive.

    Students paid by research grants/RA/TAships are required to fill out intellectual property disclosures if they develop something that maybe patentable. In 98% of cases, the state chooses not to pursue the disclosed intellectual property and lets whoever disclosed it run with it. They hold no claim to it at all.

    In the 2% of cases that they choose pursue, the state then takes on the financial burden of both patenting and protecting it. Once developed, the developers of the intellectual property have the first right of refusal for licensing the property and moving it forward.

    If you look @ most other state systems, ours is vastly less draconian.

    Professors do not tell their students not to disclose things. If they did, they would be violating their employment contracts.

  6. caheidelberger Post author | 2012.11.26

    Hey Owen! Go hard on those computers! But be forewarned: in today's economy, even retraining may not be the golden ticket. Amy Goldman went to Jaynesville, Wisconsin, crunched numbers, talked to former GM workers who sought retraining in various fields from a local community college, and found that many folks who sought retraining didn't come out ahead of folks who managed to go right back to work.

    There are all sorts of confounding variables there. It could be that retraining is only going to help if you can walk out of the classroom into an expanding job market. We need guys like John and Scott and the other Silicon Prairie entrepreneurs to find the cash and sweat and magic to make durable new jobs!

  7. Owen Reitzel 2012.11.26

    I hear you Cory. But the jobs picture in Mitchell, unless your a welder, is crap. No matter what you hear from Mitchell.
    I guess I'm rolling the dice a bit but I will come out with a 2 year degree.

  8. Douglas Wiken 2012.11.26

    "Professors do not tell their students not to disclose things. If they did, they would be violating their employment contracts."

    Then SDSM&T needs to punish some of their professors who told my son and other students exactly what I wrote.

    Perhaps that was just a good excuse to ignore students rather than a policy.

    In any case, I wonder why you are so sure of your position on the SD education attitude toward student ideas. If there is a position or statement on that, I would appreciate seeing it. I am also sure my son would like a copy.

  9. Douglas Wiken 2012.11.26

    South Dakota has enough under-utilized school buildings to provide near zero-cost facilities for a few dozen "silicon" incubators. If we can believe the TV ads from our SD Telephone and cable systems, the bandwidth and uptime should be available.

  10. John 2012.11.26

    Google Fiber wouldn't have anything to do with it?! Same old refrain - the infrastructure sets the conditions for much success. (And our legislature tends to not invest in infrastructure.) Google Fiber demonstrates average speeds 100 times faster than a residential cable company.
    Don't hold your breath for Google Fiber to rush to your neighborhood.

  11. DB 2012.11.27

    John, we have nothing to complain about here. No one around here needs Google Fiber. The ones that do, already have direct fiber lines through one of the local ISPs. It will take most states a decade or more just to catch up to where SD is currently at as far as speeds and availability. Fortunately, SDN and Midco are at the top of their games. Google will continue to test and expand, and then we should consider the investment. I'd rather not be the guinea pig when we have some of the best speeds in the country in our own backyard. Give Google time and they will do most of it themselves, and then the state can step in and help out. People barely use what they have now, besides your everyday gamer or pirate who are constantly maxing out their speeds. Fiber will be in every home eventually, but it is still way ahead of its time. Even the ones who think they need it tend not too.

  12. tonyamert 2012.11.27


    I'm a full time research staff member at SDSMT. I bring in research contracts, hire students, etc. . All of the information is in the student handbook. Sounds like the professor your son is dealing with is a non-research staff member and exclusively teaches. They are generally not familiar with our intellectual property policies, since they only come into play through funded research projects.

  13. caheidelberger Post author | 2012.11.27

    Dan, if South Dakota is so far ahead on infrastructure, then why does the Silicon Prairie seem to be centering south in Iowa and Nebraska? What are the other factors weighing more heavily in the decisions of the entrepreneurs and investors?

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