April 8, 2014
In 1950, Sam Walton opened up a store in Bentonville, Arkansas, called Walton’s Five and Dime. His idea was to attract consumers with lower prices, and it worked. Soon, he was opening up stores throughout Arkansas, then in nearby states, then across the country and world. Walmart had around 9,000 stores as of 2011.
Based in Springdale, Arkansas, Tyson Foods got its start in 1935 and is now one of the world’s largest processors and marketers of chicken, beef, and pork. J.B. Hunt runs one of the largest American trucking and transportation companies out of Lowell, Arkansas. And the Arkansas company American Freightways was acquired by FedEx in 2001 to form a major part of FedEx Freight.
These are the Arkansas entrepreneurs of the 20th century, and their legacy animates the state’s startup scene today.
“It becomes part of the lore and the legend and the expectation,” says Jeff Amerine, a serial entrepreneur, mentor, and director of technology ventures at the University of Arkansas. “Now, what we’re trying to do is recapture that spirit that drove the big companies to get big so that these smaller companies will do the very same thing.”
Organizations like the ARK Challenge and Innovate Arkansas are channeling that spirit by accelerating early-stage startup companies. Communities like The Innovation Hub give them a place to work and connect, and the angel fund Fund Arkansas’ Future infuses them with funding. Ideas are created, refined, and celebrated at events like Startup Weekend Little Rock, the Little Rock Tech Fest, MadebyFew, and DesignedbyFew. And, launched last February, the Startup Arkansas branch of Startup America is connecting all these resources together in one big community.
Besides the legacy of entrepreneurship, companies like Walmart and J.B. Hunt provide something more tangible: customers, mentors, and talent. Rick Webb, the senior vice president of global business processes for Walmart, is a mentor at the ARK Challenge, for example. Local startup CrossFleet was founded by J.B. Hunt employees, who created the LOCATE mobile app for shippers to track and trace fleets. The founders of Collective Bias, who raised over $10.5 million, come from Walmart and MARS Advertising; at MARS, cofounder Amy Callahan helped clients who sell at Walmart and Sam’s Club.
“When Walmart began to expand, they required their top suppliers to have a major presence in the area. And that brought in 2,500 companies that would really be on anybody’s Forbes or Fortune 1000 type of list,” says Amerine, citing Proctor & Gamble. “It’s been this infusion of highly educated, in some instances Ivy League, talent that has come to the area.”
Another startup, Field Agent, counts Walmart and Tyson among its customers. Their apps connect big brands to people around the world who can do mystery shopping-like tasks, such as taking pictures of merchandise in stores.
When Startup Arkansas kicked off last February, the community started brainstorming a list of challenges. Among them were the typical growing pains of a young scene: lack of venture funding, talent, and mentorship; risk aversion; and not enough press. But there was also another, less common issue: geography. While many startup communities form around a city, Arkansas is trying to form a community around a state. And that state is over 50,000 square miles large and ranks 34th in population density, with around 3 million residents (about the same as Chicago).
Most of the startup activity centers on the Northwest, in cities like Fayetteville, Bentonville, and Rogers. That happens to be the home of all four corporations mentioned above, as well as the University of Arkansas. Three hours away, in the middle of the state, you’ll find the University of Arkansas for Medical Sciences and its business incubator, alongside the University of Central Arkansas and its EPIC Residential College for entrepreneurial types. Another two hours northeast is Arkansas State University in Jonesboro.
The Northwest may be the hotbed of Arkansas entrepreneurial activity – despite the hot springs near Little Rock – but one of the challenges will be keeping the whole state connected. In their brainstorming session, Startup Arkansas participants hoped to see more incubators and networking events throughout the state, a greater density of startups, and some kind of online group to unite everyone.
That’ll also give the startups of Arkansas a coherent story to tell: a story of an entrepreneurial state that is continuing its innovation into the 21st century, even though the rest of the country may not realize it.
“Arkansas has constantly been faced with having to overcome low expectations or perception – that the people down here are not going to be very sophisticated, and overall-wearing, gun-toting rural people. It allows the area and the region to sneak up on people, in a way,” says Amerine. “The people have the determination to really exceed expectations.”
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