Indianapolis startup scene gains momentum

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One night each month, the sanctuary of a downtown church/community center fills to the brim with 20- and 30-somethings. Dressed in jeans and button-downs, they snack on party-size sub sandwiches and drink keg beer while talking about their latest business and technological endeavors.

Then the event’s 24-year-old leader, Matt Hunckler, calls the chatter to a halt. Crowd members sit in folding chairs to take in the show: mostly young entrepreneurs, with the help of iPads or MacBooks, showcasing their business ideas in casual presentations peppered with tech terms such as SEO, freemium models and smarter remarketer.

It’s not exactly a typical business meeting or crowd, though some familiar tech-startup heavyweights make regular appearances. But the group, dubbed Hackers and Founders, is perhaps the most clear and strong signal that Indianapolis’ young entrepreneur community is reaching a critical tipping point.

A group of eight 20-somethings started the group in the summer of 2009. Since then, its membership—people join for free through a website—has swelled to more than 400. Monthly meetings at the Earth House Collective typically draw a crowd of about 200.


Aning Aning

“It’s sort of a smaller example of what’s going on in the entrepreneur community in Indianapolis,” said 25-year-old Yaw Aning, one of the group’s founders.

The growth in the city’s young entrepreneur ranks is hard to track, but both Aning’s contemporaries and their more established counterparts say anecdotal evidence of the expansion abounds.

The Orr Fellowship, which connects college graduates with internships at startups, has grown from an inaugural 2002 class of nine to 28 fellows this year. Startup Weekend, an event that brings together mostly the 30-and-under crowd to create businesses in a weekend, expects its local event to attract 80 participants next year, up from the 35 at the first Indianapolis event in 2008.

Click here for an insider’s video view of a Hackers and Founders meetup.

Gatherings catering to the same crowd as Hackers and Founders are happening a few times weekly. That’s not to mention the less formal collaboration on social media sites Facebook and Twitter and at Broad Ripple coffee shop Hubbard & Cravens on Friday afternoons, when many congregate for work and idea-sharing.

Programs such as Orr Fellows have helped draw young entrepreneurs here, observers say, and events such as Hackers and Founders are bringing them out of the woodwork. There’s also a confluence of other factors—from the accessibility of bigwigs here to the string of successful startups—that have helped make Indianapolis a draw.

“The fact is, you can build a world-class enterprise here,” said Chris Baggott, 50, CEO and co-founder of software firm Compendium Blogware who also helped launch ExactTarget. “Now you have lots of people seeing that as an example, so we’ve become this cluster.”

Leaders in the entrepreneurial community want to continue fostering the growth. This year, several hope to launch a workspace where young entrepreneurs can work on their endeavors, as cities such as Los Angeles and San Francisco have.

Why Indy?

When Drew Loftus, another of the original Hackers and Founders, graduated from Indiana State University in 2008, his college business partner, a Stanford University alum, tried to persuade him to move to the mecca of startups: Silicon Valley. He contemplated it, but decided his opportunities were better in Indianapolis.

“There was kind of a spark of something that was going to happen” in Indianapolis’ entrepreneurial community, said Loftus, who handles business development for the local software startup TinderBox. “The ability to succeed and the opportunities in Indianapolis were second to none.”

Many other young entrepreneurs share that philosophy. It’s harder to compete in hotbeds such as Seattle, London and Silicon Valley, but because Indianapolis’ community is still budding, there’s a bigger opening to excel and have access to tech-startup godfathers such as Baggott.

He’s a regular at Hackers and Founders meetings and, like some of his fellow seasoned founders, is willing to offer advice and foster the movement.

“Somebody needs to be out here ... like a patron of the arts,” Baggott said. “Picasso deserves to be supported; these kids deserve to be supported.”

The city also has some positive logistics working in its favor. Housing and office space are affordable, and several universities are within easy driving distance.

And in the weak economy, there’s less competition to draw graduates from those schools to startups.

“When the market was really hot, people would just hop on a plane and head out to Silicon Valley,” said Marcus Chandler, chairman of the entrepreneurial services group at Barnes & Thornburg, a local law firm. “The bad economy has worked in favor of a lot of early-stage companies.”

Scott Brenton, chairman of the Orr Fellowship program, has seen that firsthand. He said the caliber of candidates for the program has risen in the last few years. The challenge has shifted, he said, from finding enough qualified applicants to finding enough companies to accommodate the large number of qualified applicants.

Room to grow

Indianapolis still has a ways to go to become a true young entrepreneurs’ hub.

One pressing need is having a space where they can gather to work. Examples of this in other cities, such as San Francisco’s SOMAcentral or Santa Monica, Calif.’s Coloft, have been big successes.

Having such spaces is critical because—more than a work space—they provide young entrepreneurs a venue for networking, said Chris McCann, CEO of Silicon Valley-based Startup Digest, an online publication that provides information on jobs and events in Indianapolis and elsewhere.

“It kind of amplifies things because you’re concentrated in one place,” McCann said. “It’s not that startups need space to work. You could work at your house if you needed to. It’s really the community that’s more important.”

Plans for such a space in Indianapolis are in the works, though those involved say it’s too early to discuss specifics.

Leaders from the city and universities have expressed interest, along with groups such as TechPoint, the state’s tech-industry initiative.

“I’m confident something is going to happen [with the space] in 2011,” said Mark Hill, a TechPoint board member and managing partner of Collina Ventures LLC, an investment firm focusing on technology companies. “This group of young people is inspiring things to happen.”

There’s also a need, Baggott said, for smaller bundles of early-stage funding to allow young entrepreneurs to continue to work on their ideas. Angel investors tend to dive in with bigger amounts at later stages.

The growth of the young entrepreneurial community hasn’t yet translated into a spike in startups. A May 2010 report by the Kansas City, Mo.-based Ewing Marion Kauffman Foundation said just 0.26 percent of Indiana residents ages 20 to 64 started a business from 2007 to 2009, a number virtually unchanged from a decade earlier.

But those involved in the startup community say it takes time for young entrepreneurs to get established. And the evidence of a few Orr Fellowship alumni starting their own companies—Compendium’s co-founder and 2003 fellow Ali Sales Roach is an oft-cited example—show the efforts are starting to bear fruit.

“Most people that build businesses have some experience,” said Hill, now 54, who started his first company, banking software maker Baker Hill Corp., at 27. “I’m always encouraging people, ‘Wait until you get some experience.’”

Young entrepreneurs are confident their community will only get bigger. Hunckler said Hackers and Founders will launch a new name and rebranding initiative later this month in hopes of growing its core audience.

He and others see plenty of potential.

“In a way, our generation is riding on the coattails of the [established entrepreneurs], but at the same time, we’re paving our own way,” Hunckler said. “I think the growth is very much in the beginning stages.”•


  • Always looking for ideas!
    I am always looking for ideas from young entrprenuers who have life experiences and work ethic. I have been in business for 30 years and own retail shoppng centers in Indy.
    Email me an idea if you have one so I can see if it is something we might have an interest in investing in.
  • AND their Facebook page...
  • Odd that their web address was excluded...
    I had to run out and peek -- apparently, this kind of group is doing good business in several municipalities. For Indy, start here: http://www.meetup.com/Hackers-and-Founders-Indianapolis/ (and on Twitter at http://twitter.com/hfindy )
    • StartUp Ventures SPACE
      We are excited to see entrepreneurs in indy gather. Its a competitive market and the midwest tends to get lost in realization of how competition is global and moving fast every day. We are deciding to move a 7,000 sq ft. building on my estate in Indianapolis into a new incubator called StartUpVentures. Details coming at Startupventures.com and we will be seed funding companies in the $10k initially and providing space. If interested in details, please email me at chad@domainholdings.com or chad@ecorp.com..
    • Clarification

      Three ideas to the table.
    • I can bring...

      ...three to the table.

      Two of them have been sitting in my sketch book for almost two years. The third one is needed because of a recent development (or lack thereof)

      I have a thick skin (see below) and I'm in an enviable position: I'm finishing one contract and will be in a position to work full-time, as we will live off of my wife's salary.

      I've mentioned this in other circles, but I have the perfect place when people want to have beer & napkin meetings. It's hard to beat.

      phil (fluttervertigo@gmail.com)

      "Some critics have amused their readers with the wildness of the schemes I have occasionally thrown out; and I myself have sometimes smiled along with them. But such sparks may kindle the energies of other minds more favorbly circumstanced for pursuing the inquiries."

      -Charles Babbage
      • Can't Stop the Spirt
        Great article. Thank you for drawing attention to how entrepreneurship is thriving in Indianapolis, often outside of the more obvious organizations and venues.

        The viability of the private business incubator has been challenged to the point of non-existance today, however, it would be great to see one or more business / idea incubator models flourish in the near term.
      • Hackers and Founders
        With a name like Hackers and Founders, it has a bad connotation in my mind, and I'm always thinking straight. I'm sure there are many benefits and other thing$ that are generated from being involved in Hackers and Founders, but I haven't been involved. Maybe I need to see more evidence of what Hackers and Founders do.
        • Great community in Indy
          Great article. The tech minds in Indy are amazing and second to none nationally. Outside of a coworking type space and funding Indy is primed for startup expansion. The best part of Indy and the local startup community is the willingness of everyone to share ideas and help each other along. That will lead to helping these companies and individuals prosper in the near future.
        • Stats Square was born out of a "Startup" Event
          Very well written Francesca, cheers to you and the IBJ for giving notice to a trend that start about a year ago. The startup scene in Indianapolis is gathering some great momentum, and to have the IBJ take notice (and hopefully continue to) might give a verifying indicator those on the fence need to jump in! Stats Squared was born out of Indianapolis Startup Weekend. 5 guys who literally had never met before, came up with an idea that gained national recognition with a second place in the Global Startup Weekend Battle. Needless to say, its now turned into a full-time startup (outside of our day jobs) for the team, and we are releasing our first product in February! Even if you are only interested in learning about the startup scene, with events like Hackers and Founders, IT Martini, and Techmakers -- you have no reason not to get the ball rolling and see what happens. Thanks again Francesca and IBJ!
        • You should definitely attend.
          While the article makes it seem that the crowd is only 20 to 30 somethings, I would encourage anyone who is passionate about starting a business or technology to attend the event. I personally have hated most of the meetups in Indianapolis - but Hackers and Founders is mind blowing. I have built so many great relationships out of the event, and it's a great way for some of the "hermit" developers to finally come out of there shell with a group of like-minded individuals.

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