October 11, 2017

Why Branch Put Down Roots in Minneapolis

We’re excited about our future in Minneapolis. More importantly, we’re invested in our future here.

It’s been just about a year since we moved operations from Southern California. As graduates of the inaugural Techstar retail class last year, we’ve had the opportunity to pursue our goal of improving the collaborative and productivity tools for millions of hourly workers.

Since Techstars, we’ve relocated from Pasadena, increased our staff, raised $10 million in funding, and expanded our product offering across verticals including retail, restaurants, hospitality, call centers, manufacturing facilities, and banking.

While Techstars was the culmination of everything we put into the initial stages of founding Branch Messenger -- our earliest employees, the first versions of our software, our pilots with Target -- the relocation to Minneapolis signifies everything that is critical to our future success.

That success centers around four critical elements.

1. Recruiting the best of the Midwest

Hiring the best talent is essential for startups and large technology companies. We share the same hurdle: It’s incredibly challenging to find the talent.

Right now, the talent pool for engineering and development for mobile software is centered in Silicon Valley. Additionally, there’s a ton of talent that has moved to Los Angeles and “Silicon Beach” based on the recent success of startups like SnapChat and the presence of big Valley players like Facebook and Google.

But, for every young dreamer or college graduate who departs the Midwest for the West Coast, there’s a growing legion of “cool kids” who are making the choice to come home. There are founders who believe they can scale SaaS companies here in Minneapolis, including Kipsu and Branch.

An interesting transformation has been taking place in the Midwest. From the Short North in Columbus to the Northeast in Minneapolis, entire neighborhoods are being revamped into tech meccas outfitted with the amenities, housing, and features that are drawing entrepreneurs and startups to call the refurbished brick warehouses home.

While the West Coast holds an intoxicating allure to the long-established technology giants who have changed the way we live, we hold the belief that the Midwest -- namely, Minneapolis, provides an opportunity to bring a Silicon Valley ethos about changing the world in a positive, effective way here, while being able to live a balanced, quality, and productive life.

We have a bit of history with Southern California colleges like Caltech and USC, but we’ve already made significant inroads to the deep pool of workers we can tap into here. We’ve already begun building our team with graduates that represent the University of Minnesota, and Carlson School of Management. The talent here in the Twin Cities is seasoned and incredibly bright.

Beyond Minnesota, the Midwest has a strong network of first-class engineering programs known for producing innovation and talent that has propelled technology including the University of Wisconsin, University of Illinois, Northwestern, University of Michigan, and Purdue University. This region receives more than 25 percent of research monies and graduates a larger percentage of computer science degrees than anywhere else on the planet.

It used to be that proximity to Silicon Valley was important. That’s no longer the case. Today, we can imagine, build, design, and deploy our products from virtually anywhere. At Branch, we have a number of remote employees who are accessible when we need them but are free to do the important work to build Branch no matter where they’re located.

We’ve also found some of our brightest talent right here. Being in Minneapolis has also connected us to a caliber of enterprise sales talent rich with deep retail experience. Casey Carl, former Chief Strategy and Innovation Officer at Target is our strategic advisor.

We’ve been able to recruit Taylor Pack, VP of Customer Development who worked at Target for 14 years, seven of them spent at their headquarters working alongside store operations and evaluating emerging technology for the retail giant. Andrew Johnson, our Director of Sales came back home to Minnesota where he grew up to work for Branch after leading sales teams for Compellent and Dialpad in San Francisco.

Of course, if you want to join our team, we’re hiring! Check out some of our current openings and see if you’re a good fit to help us change the way the world works.

2. Move Fast and Fix Things for the Hourly Worker

The world of work for shift workers is tethered to antiquated technology and cumbersome user experiences that are not designed to be mobile-first. Today, in order to keep up with the ever-changing demands, we need to be able to move fast.

We’re also dedicated to being close to our target audience, and the Midwest represents a strong cross-section for the majority of American shift workers. We’re nothing without our users, and we’ve been successful in building our features because we’re able to talk to them and discover what’s working and what’s not.

Last year over the Christmas holiday shopping rush, our team personally visited 133 Target stores across seven states to talk with employers and managers in an effort to understand their work and personal lives. From Iowa to Nebraska, and North Dakota to Wisconsin, the connections we made with Target employees was essential to our product development.

It’s been very valuable for our team to build features that address problems experienced by the majority of Americans, not just things users on the coasts view as problems. Rooted here in Minneapolis, we’re able to empathize with the challenges of the modern American shift worker. It’s imperative that we’re close to our users to meet and address their problems head-on, instead of interpreting them from afar. While tech on the coasts builds products that help young, urban Millennials, we see opportunity in tackling the big problems of the entrenched industries of this region -- healthcare, insurance, manufacturing, and retail.

Minneapolis is an ideal place to be for a B2B software company. We have the access to the biggest players in the verticals we care about. There are a plethora of Fortune 500 companies like Best Buy, Target, 3M, and UnitedHealth Group. These business clusters in retail, manufacturing, healthcare, and banking make it easy to build and foster relationships that move business forward for everyone.

3. Early-Stage Investors in the Midwest

There are 152 Fortune 500 companies here in the Midwest. It’s a region that ranks as the fifth-largest economy in the world according to analysis from Drive Capital. Meanwhile, California is the eighth largest economy in the world.

At the same time, we’ve seen just 2 percent of venture capital, according to research by PitchBook. A lot of that has to deal with larger, deep-rooted perceptions that are built on the area’s former manufacturing and agricultural roots. Likewise, a conservative approach and resistance to change have hampered outside investors. Thankfully, that’s changing with the arrival of talent and the ability to build and implement software quickly. This new wave of technology is less about the apps and software and more about plugging their features into the entrenched industries in an effort to help our lives at the same time as disrupting age-old sectors that were previously underappreciated and overlooked.

We embrace the Silicon Valley ‘build fast’ mentality, but we’re applying that mindset directly to the long-standing industries here that need it most.

Already, we’ve connected with early-stage investors that are keen on discovering companies that are solving these problems that have an impact on the local economy and its industries.

Public resources like the Minnesota Angel Tax Credit helped make Branch an attractive investment to angels investors in the region and helped secure commitments in our initial funding round from investors Daren Cotter, Rob Weber, Brett Brohl, and Hyde Park Angels. Those early commitments paved the way for early-stage institutional investors in the Twin Cities like Matchstick Ventures to join in both our seed and Series A rounds.

Office Space. When we first came here, we were fortunate to get post-program space to work from with Target. After that, we spent time working from Industrious, a co-working space located downtown. We’ve grown so much that we have just made our most significant move yet to an office within WeWork located in the iconic Capella Tower. The earliest days of a startup are an exciting time when all the knowledge sits together in a small space. The flexibility of having office space where we could scale up based on our growth while not being locked down to long-term commitments has been vital to keeping us focused on collaborating and communicating with each other in one space.

Local Partners. The Twin Cities are full of top-notch, longstanding, and formidable companies that represent big opportunities to partner with. Initially, we had the great fortune of working with Target during the Techstars program, but we’ve now expanded our efforts by establishing relationships with other major Minneapolis companies. This revelation hit us last summer when we realized that we could make significant leaps with Branch by tapping into the vast network of national enterprise customers who are based here.

4. Quality of Life

Sure, we miss the beaches and year-round sunshine of Southern California. But, there’s something to be said of the negative impact that incessant traffic and rising costs of living have on us. In Los Angeles, no matter the time of day, traffic on some freeway will appear as bright red on Google Maps. There’s no getting around that. These things have a direct, negative impact on not only our quality of life, but also our creativity, output, and productivity.

The Twin Cities bring us four beautiful, changing seasons, an exciting array of sports teams and outdoor activities, a bounty of incredible dining options, and some of the most friendly people you’ll ever meet.

The talent that is relocating here from stints in Silicon Valley are taking notice of not just our quality of life and the low cost of living, but they’re also moving back with an interest in working for mission-driven, purposeful startups that are tackling some of America’s biggest challenges.

We’re fired up to call Minneapolis home. We can’t wait for the next chapter of our mission to change the way the world works.

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