From Cincinnati to Silicon Valley, DotLoop CEO explains his move

68 Comments

Baby, if you ever wondered, wondered if your company should make the move to Silicon Valley, then check out this video with DotLoop founder and CEO, Austin Allison.

[youtube=http://www.youtube.com/watch?v=AzpUXONH4bM]

DotLoop, a startup that wants to simplify all of the complicated paperwork associated with large transactions like buying a house, was founded in Cincinnati, Ohio and recently opened up an office in San Francisco. For startups outside of the Valley, Allison offers insight as to why he is making the move. According to him:

  • Conservative midwestern towns don’t foster the risk-taking nature of entrepreneurs
  • Cincinnati has great marketing talent, but there is more technical talent out west
  • Employees in Cincinnati don’t quite understand the mindset of working at an early stage startup environment

Allison isn’t entirely down on his (former) hometown. Cincinnati does have much cheaper real estate (less than $10 per square foot), and because DotLoop is a hot company in Cincinnati, there is a loyalty there that can’t be matched in the Valley, where hot, new companies sprout up every day. But we’d love to hear from other entrepreneurs in the midwest. What do you think of Allison’s assessment and reasons for his move? Leave a comment and let us know.

68 Comments

Jaydev

I think all of those who are amazing technology ninjas in Cincinnati should contact CincyTech, and offer their services to start-ups. That would be a great way to continue to fuel the start-up ecosystem in Cincinnati.

Karl

Not sure that’s necessarily the right vehicle but I do mentor many upcoming entrepreneurs.

Josh Owens

Why would they want to contact CincyTech? We just talk to the companies as they come out of the brandery now. As I am sure you are aware, the last time Gaslight worked on a CincyTech company it didn’t turn out so well.

Bob Gilbreath

Josh, you fall into the same trap as Austin! Why put another group in Cincinnati down that has nothing to do with this flap?

Karl Treier

What’s missing from Cincinnati is not bleeding edge technical talent, or motivated entrepreneurs with great ideas. It’s adequate capital, capital that’s not controlled by a few select individuals, and a tech press that shows any interest in anything created in the Midwest.

Shane

Can you make movies in Ohio? Or Virginia? Or Oregon? Sure. And people do. But by locating in Southern California you’re getting access the a pool of movie-making talent with a density you don’t see anywhere else in the world.

And that’s what Silicon Valley offers startups and technology companies. I came from Columbus and now live in San Francisco. The truth is, most software developed in this world — at least 90% — is line of business software developed internally in companies across the country. You do get a lot of Java, and a lot of .Net, and still a lot of Visual Basic. That’s largely on top of SQL Server, Oracle and MySQL.

Here, you have a very dense, very diverse talent pool. Try to hire people in [Miscellaneous City] with solid Cassandra or Riak (or Mongo or Redis or…) experience. Try to hire people who have built highly trafficked consumer web apps. Try to hire fantastic UX people. Try to find great designers that also have great HTML and CSS experience. You can find the occassional one. But it’s very hard. Out here? Yes the job market is very hard for companies right now. I cannot tell you how easy it is to find work as an engineer. But you have access to a talent pool 2nd to none in the world.

If you’re going to make movies, you want to be in LA.

Josh Owens

Shane,

I find that your arguments just don’t hold up for me. Having recently hired three talented designers and two great ruby/javascript guys in the last month, I think Cincinnati is a great hot bed of technologist.

Maybe we just know where to look?

Shane

I don’t think you appreciate the scale, man. Congrats on a few Ruby hires, though.

Josh Owens

Shane,

I don’t think you appreciate the scale. I just said it took me less than two weeks to make highly technical/design oriented hires. We have a list of 10 prospects ready to go if we wanted to grow more.

We aren’t the only company growing around here either, we share offices with another startup and they are hiring guys left and right too. We haven’t even tapped into interns and college students.

To say you are moving to the valley or SF because of tech talent, that is just complete crap to me. We get hired by clients out in SF because they have trouble finding talent.

dokeeffe1213

Shane,

Um,…not when producers are charged $10,000 a day to rent a car wash or an empty parking lot in LA. The movie press might only cover LA, but these days, the actual “movies” are being made anywhere but LA. Have you seen a little film called “The Avengers?” Made in Cleveland and Cincinnati. Respectfully, we associated with the movie biz love LA, but the business of making movies has changed, and you can no longer discount the rest of the country when it comes to moving films from paper to the big screen.

James Dickerson

You can’t really compare Silicon Valley and Cincinnati. Cincy’s startup scene is in it’s infancy and can learn a lot from Silicon Valley just like the rest of the world can. Local communities need to leverage their strengths and focus on what they are good at.

Will you see a Twitter or Facebook emerge in Cincinnati? Probably not. But I bet you will see great entreprise software companies, marketing, and brand technologies being built, among many others. I think what he was saying in the interview might have been taken a bit out of context. Cincinnati has it’s negatives and positives – there needs to be more tech talent, sure. Joining a startup needs to be a viable option. There also needs to be more available capital for seed/early stage companies, I think CincyTech is doing a great job leading the charge there. I think everyone is well aware of these issues and if anything, this article/video is a great way to light a fire to get everyone in Cincinnati working 10x harder.

There also needs to be more unity throughout the Midwest if it wants to succeed. Let’s get Chicago, Indianapolis, Columbus, Cincinnati, and the Silicon Prairie working together on deals and pooling resources. One of the things that makes the Valley great is that there is so much serendipity and willingness to help. There is no reason why Midwestern communities can’t unite and emulate those aspects. If you have an extra $25k get to know some great startups you can invest in, if you have talent or connections offer to help out – talk to the guys at the Brandery if you want to get involved.

I wish DotLoop success and can understand their decision to open an office in San Francisco. If you haven’t launched a startup, dedicated your life to it, and have gone through fundraising, then you may not understand everything that went into his decision. Hopefully Austin and his co-founders make it big and can help other startups succeed in Cincinnati through angel investments and connections.

I’ve spent time in all kinds of communities – New York, Silicon Valley, Chicago, and a great deal of time in Cincinnati. I’ll tell you that location can be a part of the equation – it is, but the number one aspect is creating a great product, and I’m a firm believer that you can do that from anywhere. I’ll be back in Cincinnati next week (from Silicon Valley) and would be happy to chat about what can be done with anyone who is interested.

Jeff Mills

Hello Folks. Jeff Mills, SVP of Sales & Marketing @ DotLoop here. As a long time member of the local high tech community, I moved here 9 years ago and love living in Cincinnati. We are not moving the company to San Francisco, we are simply opening an office there. I work for Austin and know him well. He’s a Cincinnati guy who works at a Silicon Valley pace. It’s an honor to try and keep up.

Bob Bonder

After living in NYC and SF, I specifically chose to move to Cincinnati to start my business. Due to the level of development & investment relative to the cost, I’ve been able to fund 4 businesses ranging from coffeeshops to medical devices. It is a small community relative to SF, but it’s so accessible and incredible supportive of the start-up community. Complementing the entrepreneurial spirit is an amazing level of growth in the downtown area, including the revival of the historic Over the Rhine district. While that may not seem to be a direct tie, this extent of development is something I haven’t seen anywhere else in years and it has been an inspiration to the young entrepreneurial community. In fact, I now have friends choosing to move here from the coasts to start businesses with me rather than taking similar opportunities in CA. They were captivated by the development and the receptiveness of local community to start-up investment.

I get why Austin would setup an office in the valley and don’t disagree with that, but since the story did portray a negative view of Cincinnati, I wanted to speak up on the city’s behalf.

–Bob Bonder–

ActionJackson

I like it here in Cincinnati because of the square footage costs and the type of work I can do. It allows me to thrive in technology that I like and afford a home with more than 500 square feet of space to live in. I also have a front and back yard – it’s very nice. Austin is absolutely correct about the cost of living!

I also enjoy the tornados, floods, and the occasional police induced riot downtown. Who says we aren’t cutting edge?

UnderPlayD

I think it is difficult for anyone, or any city, to have its flaws exposed publicly and to be told that you’re simply not good enough. Many of the criticisms presented are not really new ones. I think what may offend locals is that it is coming from someone who started his company in Cincinnati, and got the support he needed to grow to a point where he could attract outside capital to Cincinnati. The company was undoubtedly flying high for a few days. This brings the enthusiasm down to earth a bit.

As far as the editing of the video goes, it is difficult to blame Chris for the sound bites he used. We certainly can’t accuse Chris of “spinning” the statements. For example, “The culture in Cincinnati just isn’t ideal for an entrepreneur because entrepreneurship is all about risks, and making sacrifices, challenging the status quo, pushing the limit of everything that you do, and that is sort of the opposite of Cincinnati… people work 8 to 5 to retire someday.”

Whether there is more to the story, complimenting Cincinnati or not, what was used certainly stands alone.

As far as the weather, its not sunny and 65 every day (or most days for that matter), but today ain’t bad…

Chris Albrecht

Thanks for your comment, UnderPlayD.

And FINALLY, someone clues me in on the weather. :)

Josh Owens

Having just gone to SF for a week of coding on-site with a client, SF isn’t 65 and sunny every day either.

Oliver Kroner

As the growth of DotLoop demonstrates, Cincinnati offers extremely fertile ground for a young start-up. From the low “cost-of-entry” for a young company, to the many major corporations in constant need of support, opportunity is everywhere.

That said, I understand why DotLoop would want a presence in the Valley at this stage in their development. As other journalists have pointed out, Cincinnati should feel proud to watch this local company grow into a national player.

Icemaster

Wow Austin, that’s disappointing. Good luck surving as a small fish in a big pond. Could have made a difference here, but doesnt sound like your ego will let you. Doesnt really sound like you belong here, best of luck. Nice play trying to blame the editing of the story. What you said cant be un-said.

Inkdryer

I’m going to come at this in a different way. I am from Cincinnati and currently live here. I love this city with all of my heart. I’ve worked as a designer in Cincy and am currently working on a new venture here. I do, however, tend to agree with Austin. I don’t believe he is bashing Cincinnati. I’ve spent minimal time in Silicon Valley but none can deny that there is a different mentality there. Many argue that SV is different than many cities, even NYC (so it’s not a dig just at Cincy). I definitely believe that talent exists here, and I am one of those. I believe creativity can change this world (and I’m currently investing all of my energy into that). If you are a bleeding edge technologist in Cincy then just build something. Today. In SV, people just build things, take the actual risk, and work really hard until it happens. That does happen in Cincy but it is the anomaly rather than the norm. Culture is a huge part of starting a business and a part of that is being surrounded by people that are sympathetic to entrepreneurs. That’s the main difference.

Matt Vorst

We all hate seeing such negative press, but let’s remember that this is press and a spin added to every interview. I’ve known Austin since before we founded DotLoop and I know he would never intentionally badmouth our team, the Cincinnati entrepreneurial community, or the people that helped us get to where we are. The edits were very unflattering and I will attest that they do not sound like Austin.

Since our initial discussions, of opening an office in the Valley, Austin and I agreed that the talent in the Valley would strengthen our team of talented developers in several key ways. This is an opportunity to leverage the knowledge, connections, and community of our team in the Valley to make the DotLoop family as a whole stronger. They will bring new ideas, different ways of approaching problems, and the experience that comes with success and failure back to the tech team here in Cincinnati. This experience will make us stronger, faster, and more agile.

Many of the strengths the Cincinnati team brings to the table help make DotLoop a world class business. We have many talented developers that are passionate, not only about the technologies they use, but also about the product itself. Our whole team brings process, knowledge, and despite the common misconception, dedication that often keep them here into the night.

Finally, I want to say that we are open for business in Cincinnati and will be for a long time to come. We will successfully learn from the successes and failures of both offices to make us stronger. We will continue giving back to the Cincinnati technology community. And we want the best of the best wherever they are!

Matt Vorst
Co-founder and CTO DotLoop, Inc.

Kevin C. Cummins

Chris.

I worked in Silicon Valley for 20 years, lived in San Francisco for 8 and have moved my family to Ohio to run a start up, batterii, here in Cincinnati.

Your correct this is not about Silicon Valley vs. Cincinnati, nor is it about real estate.

Cincinnati offers strong community, financial and technical support for start ups. And most importantly you can find talented, dedicated employees who exude the entrepreneurial spirit.

I would pleased to host you here in Cincinnati when you visit.

Kevin C. Cummins
CEO, batterii

batterii offers our clients the ability to connect their employees, partners and customers in an online community which can be focused to solve critical business problems and drive top line revenue.

Chris Albrecht

Thanks for the note, Kevin.

But how’s the weather? :)

Thanks for the offer. Having you host would be a conflict of interest, but perhaps there will be an opportunity for me to come out there and at least sit down with you and other founders. Sounds like there is definitely an active community, and that is HUGE when launching startups.

Kevin Pfefferle

Chris, this is the second time within the comments that you’ve made a jab at the weather in the Midwest. Believe it or not, many of us who live here view the yearly experience of all four seasons as a distinct *advantage* of living in this part of the country. And since when does the temperature or precipitation of your geography have anything to do with creating great products or businesses?

Perhaps Cincinnati should ask where Silicon Valley’s Proctor & Gamble, Kroger, or Macy’s is? Cities such as Cincinnati have their own distinct strengths that can have a real measurable impact (unlike the weather) when building certain types of companies – a fact that often goes overlooked by the coastal hubs.

IT Martini

“The coldest winter I ever saw was the summer I spent in San Francisco.”

-Mark Twain

Cincy Entrepreneur

Really the weather… You should have wrote the piece about the weather if that is thing you will kling too… Interesting thing is some people actually like the seasons.

Bill Felix

Chris,

I think the comments here, 19 as I am writing (nearly 4 times the amount of your last 4 videos), should indicate that you (and Austin) have struck a nerve in this interview. With this fact and the fact that Cincinnati is a very passionate, social place (http://goo.gl/liGIh), you should consider re-editing or taking down this submission based on: 1) the ambiguity of the interviewer’s slight or the interviewee’s intention 2) neither of you will gain from this interview 3) other places, such as the Silicon Prairie or other “midwestern…”, would love to join in and disprove, dispel the opinions expressed in a similar fashion.

With kindness,
Bill

Chris Albrecht

Thanks for your thoughts, Bill.

I stand by the video as it is. This has caused more discussion than any other episode I’ve done and I appreciate that, but it was not my intention going into the story to whip a controversy.

I can’t travel everywhere, but I’d gladly talk to other tech startup founders from around the country if they are ever in (not necessarily moving to) the Bay Area.

Chris Albrecht

Then you should apply to work at GigaOM! :)

chrismbergman

As an entrepreneur in Cincinnati, I’ve found that it’s advantages greatly outweigh it’s disadvantages. I have the opportunity to not only be a founder, but also a dad and a husband. Cincinnati has rallied behind it’s entrepreneurs by creating great accelerators, effective mentorship, a great pool of capital and a wonderful peer community. Our startup, Choremonster, would not exist without Cincinnati’s startup community. It’s a bummer to see the city portrayed this way.

gracedobush

“Conservative midwestern towns don’t foster the risk-taking nature of entrepreneurs”? No way. Midwestern towns, with the low cost of living and low overhead, are the perfect place for entrepreneurs. Cincinnati is totally teeming with small ventures and startups right now.

Chris Albrecht

@CincyEntrepreneur and @gracedobush :

The midwest may be great for the reasons you listed (go ahead and ask if I’ll ever be able to buy a house here in California).

But it’s not just about real estate, though, right?

The Valley may be littered with failed startups, but we have an infrastructure, networks, existing companies top-notch universities all in one place (oh, and no snow). Plus, San Francisco as a city attracts people from all over the world, creating a pretty broad set of viewpoints.

Again, this isn’t a brochure for Silicon Valley (ask me again if I’ll be able to buy a house), I really want to explore this from the people making it happen in places like Cincinnati. I’ve never been to your town, but I certainly want to see entrepreneurship and innovation help make it thrive.

Bob Gilbreath

Come on out, Chris, and I’ll personally introduce you to the 30+ startups that we’ve funded so you can hear about why they are staying.

Josh Owens

As a entrepreneur in Cincinnati, we have a lot more advantages than SF or SV. We are a tech company and we help people build things with technology. Hiring people has been one of the easiest things we have done, as a company. It only took us a week to find an experienced rubyist or javascript guy to fill a spot we needed recently.

On top of that, we now have a startup mall that has space available at $3/sf! I really don’t think you can top what is going on in Cincinnati right now.

Cincy Entrepreneur

Dot-who? Cincinnati is an amazing place to start, own, and grow a business. You don’t need to be in Silicon Valley – the valley floor is filled with companies that thought high priced, valley location would solve their growth problems. Full interview or not – 8-12 months would be a great follow up stort on how he things about it now.

You Know Who

Matt Vorst, DotLoop’s Cincinnati CTO extraordinnaire, actually invented everything DotLoop sells, right here in Cincinnati. Austin is the butt of many jokes in the Cincinnati entrepreneur network, his superiority complex and sense of entitlement are hilarious to see in action. He’s very fortunate to have been born on third base. He still thinks he hit a home run of course, but what can you expect? Way to crap all over the people who helped you build your company, Austin.

40-Hr Week Java Dev

Cincinnati is rich with talented technologists who are dedicated and have what it takes to build bleeding edge software. It doesn’t take any effort to find seasoned talent, but like with everything else, talented people cost money.

Austin, having no tech background, is basing his statements on one endeavor with a team of entry level developers.

Best of luck trying to find talented folks that will work for nothing in a city where demand is at an all time high.

David Richins

This piece at first glance makes it seem like DotLoop is moving its HQ to SF.

For Cincinnatians, seeing this is disappointing because a lot of people are working hard to make the city a great place for startups.

Having spent a couple years in CA near the Valley, I liked a lot of things, but found a general perception that nothing worthwhile comes out of the Midwest (“You’re from Ohio…are you a farmer?)

CincinnatiNative

It’s also sad to the taxpayers of Cincinnati, who gave DotLoop a liberal tax advantage to move into Downtown Cincinnati from Blue Ash.

(The rumor is that Austin was tired of driving from Downtown to Blue Ash every morning, so he moved the offices to save commuting time…for himself)

Cincinnati Native

I’d love to see the unedited interview, just to see everything in its entirety. Can you post it, Chris?

Chris Albrecht

Cincinnati Native,

I can’t do that. You’ll need to trust that I have no skin in the Cincinnati vs. Silicon Valley game. I do not get a kickback from the Bay Area to attract businesses here.

Additionally, if you look back at the comments from just about any story I’ve written in the past five years, you’ll find few complaints from subjects.

My integrity is the most important thing to me, and I would not do anything to damage that.

Austin Allison

Dear viewers and followers. I want highlight that things don’t always come off as they are intended in the media. Throughout the rest of the interview (which didn’t make the cut through editing), I discussed the strengths of Cincinnati and how our intent at DotLoop was not to just establish a presence in the Bay Area, but to blend the best of both cultures to build a more diverse/well-rounded team and ultimately… a better business. Cincinnati is a great place to build a business and it will remain the HQ for DotLoop; and as the video highlights, San Francisco also has a lot to offer which is why we are aggressively pursuing it as the first expansion location for DotLoop. Both Cincinnati and San Francisco have things that the other doesn’t… neither approach is right or wrong and neither location is “better” than the other. I realize that this interview (once edited) did not effectively convey this message and I am sorry for that, as it was not my intent. Thank you for understanding that no one is perfect, and I look forward to building a great business with our teams in both San Francisco and Cincinnati during the many months and years ahead! Austin Allison

Chris Albrecht

Great comments, everyone. The passion people are expressing is amazing. Makes me want to come to your city to meet other founders.

To clarify,

This article and video was not written to bash Cincinnati. The question of whether or not you need to be in Silicon Valley to build a successful tech startup is a question that arises often.

I wanted to talk with Allison because he was an entrepreneur building a company in a city not typically associated with tech startups. Allison was also of interest because he was moving from Cincinnati to Silicon Valley. Did this reinforce the notion that you have to be in SF to scale a tech business?

This line of questioning was thoroughly explained before the camera started rolling. “See Founders Run” is a video series about entrepreneurs and how they run their businesses. I wanted to know what was driving this decision for him.

The bulk of edits made were to remove my off-camera voice from the video.

Kevin Dugan

Chris: If no one has extended you an invitation yet, consider this a standing (friendly!) invite for GigaOM to visit Cincinnati. You’ll find we’re all in agreement that Cincinnati is not Silicon Valley. No one here would make that argument.

So why visit? There’s a definite entrepreneurial spirit here that will be of interest to GigaOm readers.

Dot Loop is a tech startup focused on real estate transactions. But there’s a larger landscape of consumer marketing focused startups in town, and a funding environment to support them, that you need to check out.

I’m a mentor with The Brandery – a seed stage consumer marketing venture accelerator that’s ranked as one of the top 10 programs in the nation. It’s also part of TechStars global network and The NYTimes just singled out this local community as well.

The Brandery, along with programs including CincyTech, Cincinnati Innovates, Bad Girl Ventures, UpTech and even a university-driven program called Inkubator, are all part of Cincinnati’s local startup community.

Do we face challenges Silicon Valley doesn’t? Yes and SV faces challenges you won’t find in CVG as well.

Bottom line is there’s more of a story here that Dot Loop couldn’t speak to. And it’s why your story is creating a healthy level of discussion.

So we’d love to walk GigaOm through it. Come see why the phrase “flyover country” is one of the most misleading, oversimplified and misinformed in the entire English language.

Cincy Startups

Austin, you have a ton to learn. Moving from Cincinnati to SF is not your problem. Culture, drive and leadership starts at the top. Grab a mirror.

Scott Felblinger

I hate to see such a negative light being cast on the technology, innovation and entrepreneur scene here in Cincinnati. There are plenty of smart technologists in this region, and as mentioned by Cincinnati Person, you just have to pay for them AND create a culture that makes them want to work there. If you want technology employees to work “start-up hours”, you’d better be offering them compensation and benefits that make it worth their while. There is a great demand for smart, local development talent in Cincinnati, so technologists are going to choose an 8 – 5 company every-time over sweat-shop mentality unless it’s really worth their while and they’re being compensated for the additional risk. For the record, Cincinnati programmers are using the exact same “cutting edge” technologies as their San Fran counterparts… choice of programming LANGUAGE rarely has anything to do with creating a “cutting edge” PRODUCT.

Bob Gilbreath

Wherever he goes, Austin has a lot to learn about being a CEO. You should never waste valuable media coverage to go negative on something–especially an entire city. Note how DotLoop finally gets some top-notch press coverage here, but the story has zero to do with his business!

Rocks and Glass Houses

Which is way different than trolling comment threads with sour grapes snark about a company that CincyTech clearly fumbled a deal with. You had a point about maximizing the value of national press coverage, but couldn’t resist obsuring it with a condescending personal jab. Well played, sir.

Chris Albrecht

That’s awesome. Know your audience! But he’s moving out here, that has to say something.

Cincinnati Person

Good luck hiring those mythical seasoned 90-hours-a-week silicon valley ninja programmers at Cincinnati intern prices. Seriously, the talent is in Cincinnati but you have to pay for it just like anywhere.

encoderer

As an engineer who started in Columbus and later moved to San Francisco by way of Sarasota, Florida: I have to respectfully disagree. Expertise with fantastic, more bleeding-edge tools (think Cassandra, Mongo, Redis, Scribe, etc) is dense here among engineers in a way I never experienced elsewhere. The pay is obviously much higher here, and so is the cost of living. Though outside of the earliest pre-series-a startups, there’s not many “90 hour workweeks.”

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