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Looking for a Great State to Launch a Startup?

Affordability, talent and resources help Iowa’s entrepreneurs launch innovative businesses.

By Teree Caruthers on April 5, 2023

University of Northern Iowa in Cedar Falls
Elliot Tensen

When Austin Mac Nab decided to start his own business, he didn’t look to the typical tech hubs, such as New York or Silicon Valley, to locate the company.

Instead, the California native chose to grow his business in Iowa, where affordability, quality of life, access to talent and a robust network of resources have created an environment ripe for entrepreneurial innovation.

“Iowa has hardworking individuals, just like any big city,” says Mac Nab, founder and CEO of VizyPay, a financial tech company in Waukee. “Most people think we’re some tiny little state, but we have plenty of business amenities, and this is a great place to raise your family. We have a great school system, and it’s the kind of place where we can create a company culture that attracts people.”

Mac Nab says Iowa’s lower cost of living and cost of doing business are key advantages.

“We bootstrapped our company from scratch,” he says. “We couldn’t have done that in California. When every dollar matters to your cash flow, Iowa is an amazing place for startups because it’s so cost-effective, and that helps us attract top talent.”

Did You Know?

Iowa’s colleges and universities also keep a pipeline of diverse talent flowing to newly formed businesses. In fact, the state’s minority population grew by 60% from 2010 to 2020.

The state’s colleges and universities play a major role in advancing ent epreneurship. Iowa State University, University of Iowa, University of Northern Iowa, North Iowa Area Community College and Drake University house John Pappajohn Entrepreneurial Centers, which serve as key resources for launching and growing startups.

“The universities help us keep that homegrown, intelligent talent in our state,” Mac Nab says. “But not only that – there are a lot of people who come through the University of Iowa and Iowa State University who are not from our state. They come from diverse backgrounds.

“If we can capture that talent, it also helps us diversify our workforce. More than half of our staff is made up of minorities, and that diversity has allowed us to excel.”

Entrepreneurship program at the University of Northern Iowa in Cedar Falls
Elliot Tensen

Why Entrepreneurs in Iowa Excel

Entrepreneurs will find an impressive menu of services and resources in Iowa, including incubators, specialized accelerator programs and coworking spaces.

Agriculture-based accelerators, such as the Ag Startup Engine at Iowa State’s Research Park, help launch new ideas that keep this important industry sector for the state thriving and growing.

Take ag-tech firm Rantizo, based in Iowa City. Founded in 2018 by Michael Ott and Matt Beckwith, the company uses drone technology to help farmers more effectively and efficiently spray their crops.

An Iowa native and graduate of Iowa colleges and universities, Ott says the Hawkeye State was a natural choice to launch his company.

“Although I’ve traveled a lot, home for me has always been Iowa. Iowans are good people, nice, honest and straightforward,” he says. “We do what we are supposed to do and take care of business.”

Discover “Iowa Nice”

The Iowa work ethic, sense of community and “Iowa Nice” mentality is what co-founders of ChopLocal, an online marketplace that matches consumers with local farmers and butchers, say help keep their business growing.

“In the past two years, we’ve taken advantage of a wide variety of resources, from the Iowa Small Business Development Center to the Iowa Economic Development Authority, which helped us secure funding that helped us get started,” says Katie Olthoff, co-founder and director of marketing and vendor relations for ChopLocal.

Olthoff says the company was started to help other entrepreneurs in Iowa sell their meat directly to consumers.

“Agriculture is huge for Iowa, but there have been some challenges in recent years, especially for livestock farmers marketing their cattle or their hogs,” she says. “We really saw that come to a head during the pandemic. There were a lot of people at that time that were moving toward purchasing beef or pork directly from a farmer, and a lot of farmers that were moving toward selling it directly to consumers, so it really made sense to create an online platform that would connect these two parties and make that easier for everybody involved.”

“One of the things I think is great about Iowa and specifically in agriculture is that there’s a great sense of community. The attitude of Iowa Nice has really helped us find other colleagues who have been able to help guide us and set us up for success.”

Katie Olthoff, ChopLocal

Meet Three Thriving Entrepreneurs in Iowa

Entrepreneurs who move to Iowa will find a state full of communities where one can not only start a business, but find the support and resources needed to grow it exponentially. But don’t just take our word for it: Let’s take a look at three thriving entrepreneurs in Iowa.

Joel Bryan: Building a Ski Area in Boone

In 1997, a 21-year-old Joel Bryan received a phone call that changed his life. His aunts and uncles, who already owned a ski area in his hometown, had recently purchased another ski resort in Boone, which was later named Seven Oaks Recreation, and they wanted Joel to run the facility, and Joel agreed.

It took a lot of hard work to clear the area and make repairs. “It was a little bit of determination and a little bit of stupidity,” he says. “I knew growing up that I just loved to work, and I knew I could make this happen.”

Though Joel faced setbacks, including low attendance and a lack of funds, he turned things around. Today, the ski area has doubled its lifts and tow ropes, and people come from all over to join in on the fun – 50,000 to 60,000 visitors make their way here each year.

The Smalls: Perfecting Produce and Pie

Three miles outside of Mondamin, Jim Small, along with his wife, Renee, and son, operates a 33-acre orchard, Small’s Fruit Farm, that has been in his family for five generations.

From strawberries and raspberries to cherries and apples, as well as a number of other types of produce, the family grows and sells quality food.

In addition to produce production, the family runs a pie parlor, and they host an annual festival each fall that includes pie eating contests, pony and hay rides and much more. Thousands of visitors attend. “We really love what we do and couldn’t do it without our customers,” Renee says.

Nick Yost: Roasting Beans Leads to Coffee Bar

Coffee became a favorite of Nick Yost’s when he was 15, and eventually, that love brought him to buy a small commercial coffee roaster, and he began roasting beans in his garage.

He later started selling his roasted beans at local farmers markets and stores. Consumers loved his product, and after many requests, he moved his operation into a small commercial space. Early on, he and his wife decided to open a coffee bar just off Main Street in West Union called Euphoria Coffee, and the public couldn’t get enough.

One of the first mornings after they opened, the shop sold over 240 cups of coffee. Since then, they have moved to the Main Street district in West Union in a 1,600-square-foot facility and added more employees.

“We’ve built our business on providing the communities somewhere to go, somewhere to meet and somewhere to be,” Nick says.

The Local Crumb in Mount Vernon, Iowa
The Local Crumb

Entrepreneur Spotlight: The Local Crumb

In 2017, Aaron Hall opened a bakery called The Local Crumb in Mount Vernon, a bedroom community near Cedar Rapids and Iowa City. While the real magic happens in his kitchen at the First Street Community Center, he sells his bread to restaurants, at local farmers markets and at pickup locations in Iowa City, Cedar Rapids and Mount Vernon.

What made you want to start your business in Mount Vernon?
The nice thing about Mount Vernon is that places you can find to rent are affordable and the cost of living is lower than many other places. There wasn’t really anyone doing what I envisioned the business to be. You look at other big cities or more so in European countries, and there are bakeries everywhere … and I guess that’s how I assumed that this business would survive – out of a type of necessity.

How has your business grown since you started?
It’s changed quite a bit, but it’s still kind of the same. I’m baking for a few more restaurants. I feel a little more stable. I’ve got a handful of accounts, which are consistent. I was nominated for a James Beard Award (in the spring of 2022), so I feel like that was one thing that put me on a few more people’s radar. On my website, there’s a little “contact me” page, and that’s always increasing all the time.

Why would you recommend others launch a business in Iowa?
People who live in Iowa are interested in supporting their neighbors. Not everywhere do people feel as interested to support what other people are up to.

What advice would you give others looking to start a business?
It’s good to just make it happen if you feel like you want to do it, but then make sure you have a business plan – put together all that stuff so you know how things move forward. There are a lot of grants out there, depending on what your business is. There’s a lot of information out there, whether it’s through the city or the state.

Lindsey Hyde contributed to this article.

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