Waltons say investing in Northwest Arkansas is a ‘long-term game’

According to Steuart Walton, co-founder of the runway group in Bentonville and grandsons of Walmart founders Helen and Sam Walton.

Heartland entrepreneurship was a topic discussed Wednesday (October 19) at the America Leads Idea Summit in Bentonville at the Momentary Museum of Modern Art.

Walton and his brother Tom, also a co-founder of Runway Group and chairman of the home region of the Walton Family Foundation, were joined by Steve Case, co-founder of AOL and now at the head of venture capital group Revolution, to discuss the importance of investing in entrepreneurship in the heart of the country . Elise Mitchell, founder of Mitchell Communications in Fayetteville, now Dentsu Group, moderated the panel discussion.

“America itself was a startup about 250 years ago,” said Case, who is also the executive chairman of the Smithsonian Institute. “America almost failed, and many thought it would surely fail, but it survived and became the leader of the free world because we have the largest economy in the world.”

Case said that 75% of venture capital was spent in three states: California, New York and Massachusetts, leaving little for states like Arkansas and the rest of the middle country. That’s why he founded Revolution to invest in startups in places like Fayetteville and Detroit. Steuart said the impetus for his family’s ongoing investments in Bentonville and the region has been to make Northwest Arkansas the best place to live, work and play.

“We want Bentonville to compete in the global arena and we had to look at our best pitch. … Here it is logistics and supply chain. We then had to try to perfect that. We’ve also looked at what makes us unique, our natural amenities, and we’ve invested in trails and quality of life elements that are also paying dividends,” he said.

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Steuart Walton

Runway Group is a venture capital firm that backs startups and has created some companies like the Trails. Walton said there are now 47 other companies that have sprung up around the bike lanes.

Tom said philanthropy alone cannot create entrepreneurial ecosystems like those emerging in Northwest Arkansas. He said it takes a shared vision and collaboration with city governments, other companies and stakeholders like the University of Arkansas.

Panelists also discussed the future of work and how it’s not just about recruiting companies. It’s also about recruiting talent and building ecosystems through innovation districts. Case said there was still a need to pool talent to some extent, but there was no reason it couldn’t be done in the middle of the country. Case said when he started AOL in Northern Virginia in the mid-1980s, only 3% of Americans were online and only an hour or so a week.

Tom Walton

“Our mission was to bring America online and we did that. Finding opportunities in the face of challenges and then capitalizing on those moments is crucial. We had to go out of state for capital, but it paid off,” Case said. “Today, this region is also home to dozens of other tech companies, including Amazon, which they have chosen as their second headquarters.”

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He said Dell did something similar in Austin, Texas.

Steuart Walton said it’s crucial to find out what works and then double it down. He said Northwest Arkansas will also be blessed if business leaders reinvest in the region.

“Every time you see that, it’s a positive sign. We also have to remember that it’s a long-term game,” he said.

Tom Walton agreed, saying it’s an iterative process. The brothers said that five years ago there were times when they wondered if there would be enough opportunities in Northwest Arkansas to sustain their interest, and concluded that there are not today.

Tom Walton said he worries about complacency because it’s the fastest way to defeat. Case said that Sears and cities like Detroit were at the top of the world 30 years ago. He said cities and businesses often fall out of favor when leaders are complacent and content with their reputation. Case said that there is always someone trying to disrupt the status quo, and finding ways to invest in these companies is a mission of Revolution.

He said Revolution has invested in 200 startups across Central America, such as Fayetteville-based AcreTrader, which provides a platform that allows farmers to raise capital by engaging investors who buy interests in farmland. He said it made sense for the company to be located in a rural state with lots of farmland. He said the founder, Carter Malloy, was a Silicon Valley venture capitalist but understood the importance of earning farmers’ trust, so he relocated his business to Fayetteville. It has grown to more than $100 million in sales and 200 employees.

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Other Revolution-funded companies like Stock X, a commodity exchange similar to eBay but verifiable, started out in a Detroit basement with about a dozen people. The company has created 200 jobs in downtown Detroit, an area that is coming back to life.

Mitchell asked the Waltons how they decide where to invest in the region. Steuart Walton said they literally drew a ring around the region on a map and looked at the tailwinds that are benefiting the region. They looked for potential stakeholders who could also collaborate on a common vision.

“We want to help grow in the region and create businesses that solve unmet needs and provide opportunity. We have invested in the creation of places and the concept of urban life in inner cities and in some airlines. Last year we invested in a solar energy startup because we see solar energy as part of the energy independence solution in the long term. Costs have come down sharply, and apparently Arkansas is the 9th or 10th sunniest state,” Steuart Walton said.

Tom Walton said the Runway Group’s North Star is designed to help create the best possible version of Bentonville and the surrounding cities.

“We don’t want to be Austin or Nashville. We want to be the best Bentonville we can be. We will die trying to make this the best place to live, work and play on the planet,” he said.


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