For years, the Bloomington-Normal business community could be quite literally described as risk averse. Two major insurance companies, State Farm and Country Financial, are headquartered in town, and small businesses have populated the towns’ main streets for years.

But now the neighboring central Illinois towns are taking a gamble.

As large companies that anchor the small community’s economy start to shift with the changing business landscape, residents of BloNo are seeking ways to keep jobs and companies downstate through entrepreneurship, tech startups, and innovation. Local entrepreneurs are taking a page from the success of startup ecosystems around the country, with the opening of a new coworking space, growing a pipeline from Illinois State University, and launching an angel network that hopes to keep startup wealth local.

“There is that feeling around town, how do we be more innovative and entrepreneurial with our small town economics?” asked Doan Winkel, entrepreneurship professor at ISU.

The need for a new direction has recently become urgently apparent. This summer, Mitsubishi, the sixth-largest employer in the Bloomington-Normal area (accounting for over 1,200 jobs) announced it will close down its manufacturing plant by the end of the year. It’s not the first corporate level scare the central Illinois community has had in recent years–many started to get nervous as State Farm, the area’s largest employer which has been headquartered in Bloomington since 1922, recently opened hubs in metropolitan areas in other parts of the country.

“People in the community started to freak out,” said Winkel, also an entrepreneur in the BloNo area. “Our economic foundation might be leaving, so they started to think about other alternatives and looking at small businesses and entrepreneurship.”

Here’s how the two towns are making it happen.

The university pipeline

You can’t talk Bloomington-Normal without talking Illinois State University. With over 20,000 students, it is the biggest school in town, and is also one of its biggest employers, accounting for over 3,200 jobs.

In recent years, it has also started to be a source of entrepreneurial energy in the local community and greater Illinois.

“It’s a very different feel down here, it can be slow and conservative,” said Winkel. “But in the university there is all this activity. There are students coming and going, there is new intellectual stuff going on, people asking questions…That bleeds into the community. It causes the community to think differently and approach things differently. To me that is a big advantage.”

At the same time, students coming into ISU, even outside of the business major, are starting to rethink where their education may lead. “More and more students coming in saying I don’t want to do what my parents did. I don’t want to take the traditional career path into corporate America. I want to take more control over my career,”  he added.

That’s translated to enrollment numbers: 217 students are currently focusing on entrepreneurship within the school’s management major, about double what it was six years ago.

Winkel said it is key the entrepreneurship program that gets students out of the classroom and hands on with real problems as soon as they get to campus. With that in mind, the school sponsors several events that push students to translate ideas to business. Upcoming this fall, there’s the Corny Ideas Challenge (an elevator pitch competition open to any junior high, high school or college student in the area), TedxNormal, and the school’s annual Startup Showcase. Previous winners of the Startup Showcase, (which is giving out over $100,000 in prizes this year) include e-textbook rental platform Packback Books. Noteable alums of the entrepreneurship program include Corey Ferengul, CEO at Undertone; Katie Gottesman-Hill, founder of Commuter Advertising; and Joe Reynolds, founder of Red Frog Events.

Most of the ventures Winkel has seen students work on tend to solve student problems (which isn’t a problem he pointed out– “there are 20,000 customers available right here”). However, with new resources becoming more readily available in town, he anticipates students will start to seek solutions to problems in the community. “The more we have students at the coworking space, events, and competition then students will start to…expand their opportunities,” he said.

Angel energy

However, creating a robust university pipeline is only one part of creating a startup ecosystem. With that in mind, serial entrepreneurs in the area recently formed the Bloomington-Normal Angel Network (BNA) as a resource where startups can workshop ideas and get funding from local sources.

The group came together thanks to the patience of Mike Somers, Cody Sherman, and Brian Jesse, cofounders of internrocket, a BloNo-based internship matching site.

“When we were raising our seed round, instead of going up to Chicago where it may have been a lot easier we took a slower longer approach,” said Somers. “Over the course of a year, we raised the entire seed round–and we’re in the middle of our second round now– it’s all local.”

In raising money, they connected with a host of local entrepreneurs who were invested in this same sort of thinking–if there’s a wealth event, why not ensure that any money that comes out of it can be reinvested in the community?

With this in mind, the network is putting extra effort into developing local ideas from the ground up. They have a Thursday morning coffee club to brainstorm ideas, a Wednesday night hackerspace and bootstrapper’s meetup, and a monthly pitch competition where local startups have the opportunity to present to the network.

In addition to connecting with startups in the community, the BNA is also growing a partnership with ISU, both in the entrepreneurship and research departments. They partnered with the ISU entrepreneurship center’s student startup fund, which gives student startups small investments to grow a venture, to keep tabs on student entrepreneurs and give feedback in early stages. They’re also in talks with ISU’s tech transfer office to commercialize research and university-developed technology.

This hyper-local style of investment is purposeful, Somers said. It fits with the area’s business personality.

“There is less activity so it helps us be a tight knit group where we can all focus on each other,” he said. “Everyone loves to be on the ground level of something, there ton of energy and a ton of momentum right now because people get to help create it.”

Coworking space

If you want a peek at the future of BloNo’s startup scene, head to 108 E Beaufort St, in Uptown Normal: that’s the location of Slingshot CoWork, the first space devoted entirely to the startup community in Bloomington-Normal, which opened in July. Members pay $50 per month, which includes workspace, meetups, and events. Local businesses are sponsoring the space to help offset costs for startups, including State Farm, the space’s first corporate sponsor.

The need for a physical coworking space that could bring together disparate startup and tech ideas in the community is something that has been percolating for several years.

Back in 2013 when internrocket was just an idea, Somers and a few friends started to host hackathons in a basement in Bloomington to create the minimum viable product for what would become their network for matching people with micro-internships to discern their interests. The word started to spread about their meetups, and soon they had opened the space up to anyone who wanted to help develop the product, or wanted to work on their own venture around other entrepreneurial minds.

Interest grew, and by the end of last year the hackathons started to outgrow their basement space. This spring, the Normal city

council approved BNA’s plan for a coworking space in town. Somers said the mayor, Chris Koos, and city manager, Mike Peterson, were big advocates for Slingshot.

“[The local goverment] knows a strong entrepreneurial community will be better for the university program, and better for the community to have a well diversified economy,” he said. “They help us create those things.”

Somers said they had tenants “from the first day,” and currently the space houses 20 members, representing 11 companies, though he added that it continues to grow. Local startups utilizing the space include Omicron Financial (a financial services startup for young people), WatchMeWork (a live stream learning website for creatives), and BitAML (a Bitcoin regulatory compliance company).

“It all started in a leaky basement in downtown Bloomington with no windows,” he said. “Right from the beginning we said we were opening up our space to the community…The pipeline really started to build from that.”

The logo for the coworking space is an image of a young man winding up to launch a slingshot, a reference to the story of David and Goliath. At the moment, there is a feeling of Goliath-level challenges ahead: a time of unprecedented growth and the difficulty of turning small business mindsets into a startup culture.

But that’s part of what keeps people trying new things, even in a town grappling with an unpredictable future. “It would be awesome to be in a place where everyone gets it and there is tons of energy, but that’s kinda easy in a way,” said Winkel. “So I’m down here, fighting the good fight.”