Venture capitalist Brad Feld says it takes about 20 years to grow a strong tech ecosystem. So with that time frame, Peoria, Ill. hasn't even reached its rebellious teenage years.
But if you talk to entrepreneurs and investors in Peoria, there's an undeniable energy happening around startups and innovation in the Central Illinois town that sits 160 miles Southwest of Chicago. Though Peoria's 116,000 residents are just 20,000 more than Chicago's Lakeview neighborhood, the town packs a business punch anchored by Fortune 100 company Caterpillar and bolstered by startups that have garnered national attention. It may still have a ways to go before it catches up with Chicago, or even neighboring Central Illinois anchor Urbana-Champaign. But it's certainly growing up.
"We’re seeing a tech movement in Peoria," said Lee Deehring, the co-founder of Bump Boxes, a monthly subscription service for expecting mothers that delivers items needed during their pregnancy. "The startup community has evolved here in Peoria. You don’t need to be located on a coast to get things done and build good products."
If you were to pinpoint the beginning of Peoria's startup movement, things started heating up in 2012 when local entrepreneur Jake Hamann, co-founder of OneFire, launched Startup Peoria, a resource for the region's startup community to connect with the people and services available to help grow their company.
Startup Peoria, which Hamann launched with co-founder Amy Lambert, began starting different programs to bring local entrepreneurs and developers out of the woodwork and understand there was a place they could connect, Hamann explained. They launched 1 Million Cups, a weekly networking event over coffee where people get six minutes to tell their story and business model, followed by 20 minutes of Q&A. Startup Peoria then launched The Nest, a co-working space in Peoria's downtown warehouse district where startups could have a space to work. And then came KeyStart, a pitch competition hosted every other month that awards startups $5,000.
"How do we get people out of their garages, out of the basements, and get them talking to each other," said Hamann on the genesis of Startup Peoria. "Startup Peoria arose out of a need that we had at OneFire as we were growing quickly."
Hamann launched OneFire at the beginning of 2012 with just two employees. Now the company has a team of more than 30 and is "still growing like crazy," Hamann said. OneFire acts as an "innovation agency" for traditional, old-school businesses to help them incorporate new technologies like augmented reality, proximity technology, and touchscreen displays, as well as helping with mobile app development and digital strategy.
OneFire's clients include local giants Caterpillar and Maui Jim sunglasses, both headquartered in Peoria, as well as area hospitals and Thompson Tractor. OneFire has also worked closely with Jump Trading Simulation & Education Center, a healthcare incubator that was a founding member at 1871-based MATTER, as well as Goose Island's UI Labs.
Hamann noted that working in Peoria comes with its fair share of pros and cons, with creating awareness around the city's startup activity being one of the larger challenges.
"Keeping people here and getting people here in the first place (has been a challenge)," he said. "I think there's a lot of great things Peoria has to offer; it's just not very well known. And that's a lot of what we’ve tried to bring out with Startup Peoria.
"There's a good quality of life (in Peoria). It's not as crazy and hectic of a pace as Chicago may be. There's a lot of opportunity for growth. It's a great area."
While OneFire may be Peoria's most well-known startup, a handful of others have started to make waves of their own. Bump Boxes has seen national media attention for its subscription service for soon-to-be moms, and Deehring says revenue has been doubling every month. Deehring, who works out of The Nest, credited Startup Peoria and the growing tech scene for building an atmosphere where his company could grow.
"The the biggest challenge entrepreneurs have in general is the fear of 'what do I do next?'" Deehring said. "What Jake [Hamann] has done with Startup Peoria is really help us overcome some of that fear."
Other thriving Peoria tech companies include NEXMachine, a Salesforce partner that builds apps for sales and distribution companies, DevBright, a web and mobile app developer, and iTV-3, which is building a fiber optic internet network throughout Central Illinois.
But while startup activity is ramping up in Peoria, venture capital has been slow to follow.
"I think that there are people here in Peoria who have interesting ideas that are struggling to raise the money they want to raise because we’re still trying to get over the hump on the investment side," said Steve Zika, co-founder of Peoria-based VC firm Attollo. Zika, a Peoria native, spent 15 years in Silicon Valley and Austin working at Advanced Micro Devices before returning to Peoria in 2011. Today, along with investing at Attollo, Zika co-founded Peoria-based Kidnits, a non-pofit that offers craft kits to students through the fair trade import of hand-spun yarn and other materials from women in developing countries.
Attollo has done five investments in the last 2 years, with target investments of $50,000-$100,000, Zika said. There's also a group of angel investors called the Central Illinois Angels, which launched in 2009 and said it has invested $8 million in its portfolio companies.
Zika said he sees a startup movement happening in Peoria, but called it a "very early stage" one. A town long known for its history of manufacturing, Peoria is just beginning to breed a generation of tech entrepreneurs.
"The most familiar jobs to you are the ones people closest to you do. So if you grew up in a family where everyone works for Caterpillar, and all your neighbors work for Caterpillar, then it's really hard to imagine that you’re going to start your own business and become an entrepreneur," Zika said.
"But I think we’re on the early stages of having people be able to look around at their friends and their neighbors and say, "That person started that company. That person started that company." I think from those seeds, things are going to start to get really interesting."
Image via Jake Hamann
