The Technology Association of Iowa hosted its ninth annual Prometheus Awards ceremony Wednesday, honoring companies and individuals in Iowa’s technology sector. 

Winners were announced in 13 categories, including Software Company of the Year, IT Service Provider of the Year and CEO of the Year.

Winners were announced after this issue of the Business Record went to press (check out our website,, for the list of winners). However, before the awards were announced, we asked three of the finalists from the CEO of the Year category about challenges they’ve faced and their take on current events affecting tech companies.


founder, Dwolla Inc.

About Dwolla: Dwolla operates an online payment system. It has earned national attention and received investments from some well-known venture capital firms as well as tech investor and actor Ashton Kutcher.

Tell me about a time you failed as a startup CEO and what you learned from it.
The first day you step on a field, you aren’t the best in the world at any sport. It takes time, and it takes ups and downs to learn the ropes. Failing days are more like winning days than you’d think; you just prepare for tomorrow after each one. You can never forget, tomorrow is guaranteed to show up right on time.

How has your company dealt with the tech worker shortage in the state?
We actually don’t believe there is a tech worker shortage in the state. We just recruit the best people and will keep doing so. There’s a huge pool of talented people here, and with just 60 employees, we’ve filtered around 1,200 applications to hire that small team. We’re very fortunate.

What is your opinion on the patent reform case* in front of the U.S. Supreme Court right now?
It’s important. Patents can be confusing, expensive, and in some cases can even be a source of abuse. We’re a big supporter of fair reform and feel fortunate that we have representatives, like Sen. Chuck Grassley, who has been a fierce supporter of anti-patent-troll litigation.


managing director, ProfitStars

About ProfitStars: ProfitStars recently acquired the company that Arnold founded, called Banno. Banno provides data-enriched Web and transaction marketing services.

What is one thing the more-established business community could do to help startup growth in Iowa?
Buy something from a startup and license a sweetheart deal. Every large business is seeking innovation because the constructs of their business are designed to alleviate risk. Innovation, by definition, is risky. The broader business community would be well served by partnering with startups that are attacking hard problems in their respective industries. Even if the startup fails, they now have great relationships with innovative talent that could become full-time hires. The Members Group has met, invested in or partnered with every financial technology company in the state. They are the model to mimic. 

What is your opinion on the patent reform case* in front of the U.S. Supreme Court right now?
As a company that has been in a lawsuit for allegedly infringing on two patents, I have a very strong opinion on how the system doesn’t work. Patents should defend innovation. Patents should not be used by deep-pocketed litigators to create monopolies by using the expense of trial and appeals to keep emerging industry players out of the market. Patent litigation is a guilty-until-proven-innocent system. To prove your innocence with appeals will easily cost more than $2 million. If you “win,” which means you were wrongfully accused, you have no recourse other than you can continue selling your product. ... We need major reform in the patents in the technology space or all-out alleviation.

*The U.S. Supreme Court is hearing a case looking at what new apps should get patent protection. According to a recent USA Today story, the number of software patents in the United States has grown from about 2,000 in 1980 to more than 40,000 a year. The debate is essentially whether existing regulations harm innovation because of the cost of lawsuits for infringement, versus whether reducing the number of patents issued would reduce the incentive to invent new apps.

How has your company dealt with the tech worker shortage in the state?
Banno’s engineer culture and software development practices are created by some of the best developers in the nation, which compounds the talent by attracting developers who want to work in that environment. Banno places an engineer as a first-class citizen who is not undermined by its technical founder. ... How we work is how we attract people.  

Banno has created a nationally recognized internship program. We attract people from universities as far away as Carnegie Mellon (University in Pittsburgh) to live in Cedar Falls for the summer. Banno’s focus is on teaching our interns how to code, how we work, and to be challenged with real problems. We have a 100 percent retention of interns who are offered a full-time position.


founder, Hatchlings Inc.

About Hatchlings: Hatchlings develops and operates an online game on Facebook Inc.’s Web platform.

Tell me about a time you failed as a startup CEO and what you learned from it.
My biggest mistake was not recognizing the enormous potential of “Hatchlings” early enough. “Hatchlings” began as a weekend project while I was a sophomore at Iowa State (University). It quickly took off.

At the time, I was a full-time student and I treated “Hatchlings” like a hobby. 

The game continued to add users and grow revenue at a breakneck pace, but growth was constrained by the amount of users my servers and code could handle. I missed a huge opportunity during this time period. The game grew to over a million users in those first couple of years, but we could have grown by more had I been willing to hire a team capable of building the proper infrastructure to support them. 

I should have been out raising capital to hire people. But I distinctly remember being dumbfounded when one of our competitors raised a $100 million venture capital round. I just wasn’t thinking big enough. They’d discovered one of the same things I had: Using the nascent Facebook advertising platform, you could buy a user for 10 cents that was worth over a dollar in revenue. This competitor used that venture capital to buy up the entire Facebook advertising market. This cemented their dominance and drove up the price of user acquisition tremendously.

By the time I realized what was happening, it was too late. That was a wake-up call for me to double down on the team. I quit school to work on “Hatchlings” full time and started hiring exceptional people who could help me grow “Hatchlings” into the business it deserved to be.
What is one thing the more-established business community could do to help startup growth in Iowa?

I think the most important role they can play is contributing to making Iowa a desirable place to live.

If we have a diverse and modern city, it makes recruiting and retaining talent easier. If we have quality entry-level jobs, it helps us keep our best and brightest students. If we have a good and growing economy, it makes it less risky to leave your job to start or join a startup. And if we have strong and stable anchor companies, it gives talent from failed startups a chance to stay local.

When Iowa wins, we all win.

How has your company dealt with the tech worker shortage in the state?
We’ve had success finding students and recent graduates from the local universities who are enthusiastic and willing to learn rapidly. I like to think of Hatchlings as a “graduate school that pays you.” Our pitch to developers is: work for us for a few years and your skills will develop so quickly that you’ll be twice as valuable by the time you’re ready to move on.

Some companies look exclusively for people who dream about working for their company for the rest of their careers. That’s not us. Many recent graduates are not looking for lifelong careers within one company. They’re looking for jobs that provide learning, improve skills, challenge them and grow with them. We’re open to hiring people we know won’t be with us in five years; helping them get to where they want to be is a win-win.