The Silicon Trail
Mar 28, 2017 11:36AM
By Charlie Litton
The senior vice president for economic development at the Omaha Chamber of Commerce saw the importance of that 7 a.m. flight—believed to be the first regular nonstop service between the two cities in a quarter century. Shortly after 9 a.m., he was on the West Coast, in the fertile Silicon Valley, ready for business.
Despite Omaha’s firm footing in the Silicon Prairie—with tech giants like PayPal, Google, LinkedIn, and Yahoo all maintaining a significant presence in the metro—Omaha long struggled with a serious shortcoming when it came time to recruit more. The same shortcoming didn’t help local technology startups secure financial backing from the apparent over-abundance of thick wallet in the Bay area.
Getting from Silicon Valley to Omaha’s corner of the Silicon Prairie was more than a hassle. It usually required at least one connecting flight, stretching a three-hour nonstop flight into nearly a full day of airplanes and airports … and that’s the delay-free version.
“As much as we don’t want location to be a barrier, there’s a very real situation where Silicon Valley investors won’t fly somewhere if they have to switch planes,” says Dusty Davidson, the CEO and co-founder of Flywheel, an Omaha-based startup that builds and hosts WordPress websites. Davidson is also known for his role in creating Silicon Prairie News and one of the largest entrepreneurial tech conferences in the region, Big Omaha.
“It’s not the connection, it’s the time,” he adds.
The required connecting flights cast a pall over Omaha’s distinct advantage as a low-cost jewel compared to the Silicon Valley. Omaha’s lower cost of living and more affordable housing helps save companies on their largest expense: wages. Add in the various business incentives available from the state, along with a strong talent pool and sound infrastructure, and Omaha makes an attractive option for startup and established tech companies, with that notable exception.
“We came up short on the connectivity or on the flights in and out of Silicon Valley,” Thelen says.
Then United Airlines made San Francisco’s International Airport the nation’s 25th airport with regular nonstop flight services to and from Omaha. This spring, a 26th regular nonstop Omaha route will open between here and Houston via Southwest Airlines.
“Now, we’ve taken away that competitive disadvantage, and we’ve been able to promote it as an advantage,” Thelen says. “It really has changed the conversation as we try to continue to build that pipeline between here and Silicon Valley.”
“The ability to have direct service does have an impact on the businesses that choose to do business here,” says Nancy Miller, vice president of operations at Travel and Transport, a national travel booking company based in Omaha. “I think it helps Omaha businesses.”
That an airline would add a regular nonstop flight to San Francisco lends credence to claims of Omaha’s growth as a potential hub in the Silicon Prairie.
“The Omaha economy really seems to have been doing well over the last couple of years,” says Dave Roth, deputy executive director of the Omaha Airport Authority. “It’s just a really positive combination of Omaha and the airlines for those additional flights.”
Omaha has popped up on several national lists as a new hot spot for tech startups. SmartAsset named Omaha the best city in the nation to work in tech in 2015, and Nebraska has been No. 3 on Forbes’ list of Best States for Business for two years running.
Thelen used his first flight to the Silicon Valley to meet with a dozen tech companies, some who already have outposts in town, and few others he’d like see set up shop.
“For the cost of one hotel stay and a pretty simple flight in and out, you can get two full business days of work without the hassle of changing planes and the risk of getting delayed,” Thelen says. “The convenience of business travel just went up exponentially, and you can expect that connectivity to continue to grow.”
Executives headquartered in San Francisco can more easily visit and engage with their Midwestern operations. Or, employees based in Omaha can more efficiently meet with leadership in Silicon Valley. Officials at PayPal and LinkedIn—which employ about 2,800 and 300 people, respectively, in the Omaha area—say there is frequent travel between the Silicon Valley and their operations in Omaha, but exact figures were unavailable.
“To have firms like that, that now have much, much easier access back and forth, frankly it makes our location all that more integral to the operation because it’s a simpler connect now,” Thelen says.
He added: “That simple flight makes a big, big difference.”
And even homegrown startups can take advantage. They can get twice as much done on recruiting trips from the valley, whether they are looking for talent or financing.
Davidson, the CEO at Flywheel, says the increased connectivity will indeed make a big difference for local companies raising money. There still remains a lot of work to put Omaha “on the map” with more sources of local capital and slowing the export of the state’s top technology talent, to name a few.
“I don’t know that you’re able to look at [direct flights to San Francisco] and say, ‘Hey, look, we solved the problem,’” he says. “I think there’s 50 things that are contributing, and what you really want to do is, just one at a time, start whittling away.”
Visit omahachamber.org for more information.
This article was printed in the Spring 2017 edition of B2B.