Columbus, Ohio: Startup Observations

Context

I grew up in Westerville, which is a suburb of Columbus. I went to Ohio University in Athens then moved to Cleveland to get a “real job” working IT at Progressive Insurance. I held that job for all of 8 months only to quit because Rapchat was blowing up. I moved to Chicago to get into an accelerator and instead got accepted into 500 Startups in Silicon Valley. After 500 and a year hanging out there, we made a 2-month pit stop in LA on our way back home to Columbus. There’s a saying out there that all Ohioans eventually flock back home. Considering we ran out of money, we had no choice so Moms got her way 😂.

All of these moves were part of the Rapchat startup journey I’ve been on since 2013. I’ve seen the ecosystem go from being virtually non-existent in 2013 to thriving in 2017 when we returned. Coming back from one of the top accelerators in the world housed in startup mecca Silicon Valley, I was pleasantly surprised at the activity, the funds, the startups, and the founders. I felt like we actually had a shot as a music tech consumer company to raise some funds. Crazy, right??

Fast forward — we did. We closed $1.6M a year after being back pitching funds, angels, VCs, and surrounding Midwest VCs. You can read a bit about it here in the paper I grew up reading, the Columbus Dispatch. It wasn’t easy by any means — we almost died in the process, but that’s probably like any other fundraise too haha.

All of that is for context. This post isn’t about Rapchat. It’s about Columbus and the startup scene here. I’m going to share some quick thoughts hoping that it’s helpful to someone looking to move here or learn more about it. It’s not going to be post #1000 about “why X city is the best place to start a company” because frankly, I don’t find these homer/biased pieces that helpful. They all say the same shit. And lastly, to reiterate — I run a music tech consumer company in a place where there are none. Columbus is much more well known for companies (both private and public) in other sectors, so take all this with a grain of salt.

In case you’re still interested, off we go 😎

Observations

Dope Founders

I’ve had the pleasure of building some great relationships with other founders and CEOs in the city. In terms of quantity, I’m sure we have less than other major cities when it comes to founders/startups, and I kind of like it that way. No matter the stage or how much money you’ve raised or which VC has backed you, every founder is reachable and open to connecting. I’ve met nearly every founder/CEO of a startup that’s venture-backed here and even better, plenty of founders that haven’t raised yet that are looking for help. Obviously, any city has “meetups” and all sorts of social events and Columbus is no different. I don’t go to those as much anymore as I’ve decided to personally go deep with a few who are at similar stages to us. The founders I’ve met here are generally great people beyond their startup, and we find ways to support and help each other.

Some Venture Capital

Well…it’s better than it was in 2013 when it comes to VC haha. There are a few funds to support different stages, and we were fortunate to raise some local VC in our seed round. However, I still don’t think there’s enough VC to support early-stage innovation and enough options to fund further rounds beyond that. There may be 10 TechCrunch articles out there to prove me wrong, but based on what I’ve seen with other founders and what I’ve personally experienced, the options are a *bit* limiting. But at least there are some.

The story I’ve heard from other founders (which is similar to ours) is that you can probably piece together a seed round here but beyond that, you’re going to have to go to other markets to find your next round. That’s OK and probably par for the course when it comes to developing ecosystems.

It is important to think about the impact COVID could have on the necessity of local VC as more of the bigger VCs around the country start to get comfortable with remote raises. This could provide an advantage for the future generations of founders not having to be tied to a local VC system and thus, given a bit more flexibility and opportunity to find capital. I know for us, we found about 1/4 of our investors remotely and expect that ratio to be much higher for future raises.

Amazing Angel Investors

We’ve had over ten angel investors in our company to date. Most of them were from Columbus, and almost all of them in the greater Midwest. I cannot say enough good things about the angels I’ve had the pleasure of working with. They’ve consistently supported us through thick and thin and have made up a solid chunk of our financings. Beyond financial support, these are genuinely great people who oftentimes have real operator experience. I lean on them quite a bit when things get tough or when opportunities arise, and they are always there.

Interestingly enough, I’ve heard the same thing from other founders in the city who have had some “super angels” invest and sit on their boards.

Low Burn

The rent we paid for a 2bd apartment in Mountain View, CA is enough for the mortgage on a mansion here. This tune isn’t new...everyone understands that it’s cheaper to start companies in many other places than SV but Columbus really is affordable. Not only personally when looking for somewhere to live, but the office space is still pretty cheap too.

I don’t feel as qualified to comment on talent because most of our talent we’ve found remotely but obviously there is a massive startups like Root that have found ways to build an incredible pipeline here to support scaling.

And again, COVID will have a major impact on how we hire and will skew startups to even higher remote employee ratios so that’s a factor to consider too.

Just in general, this is an excellent spot to keep burn low.

High Quality of Life

Commenting on the quality of life also feels above my pay grade, but I will say, I think people are generally happy and friendly here. I have lived in other places and experienced lots of different communities and it’s just not quite the same. Obviously, I’m biased and this is home, but still.

Another reason I like Columbus is because it’s a big city that doesn’t quite feel as big as it really is. The traffic is essentially non-existent, you can always find a place to get a bite to eat or a drink without too much trouble, and there are some cool parts of town that offer plenty of entertainment.

I’ve talked to younger founders who love living near or in the city and older founders who enjoy the burbs and have found good homes/schools/etc for their families.

Big Companies and Colleges

Columbus is home to Ohio State, which provides a whole gamut of opportunities for startups regarding hiring, strategic partnerships, funding, and more. I have zero experience beyond hiring interns in working strategically with the universities but have heard great things from other founders in the biotech space.

There is also a handful of Fortune 500 companies here that provide unique opportunities for partnerships, funding, and, most importantly, poaching talent (joke).

Again, I don’t have as much experience in this area but have seen bigger companies start strategic funds, innovation labs, invest in other startups, and have great hiring programs when it comes to universities.

OK that does it for now. While it’s a crazy, crazy world right now — when I sit back and reflect on where I live and the community I am in, I find myself pretty happy with Columbus.

There is always room for improvement, which excites me because it’s an opportunity for us to be a part of the change we want to see. It’s motivating to understand that you can have a significant impact and help mold the future here. In contrast, in Silicon Valley, you’re just another startup person on the street trying to be the next Facebook. I got high hopes for where we’re going and super pumped for the next wave of innovation I feel coming.