The exponential growth of Ben Milne’s Dwolla Corp. has attracted mega attention in the past eight months, and the technology start-up company’s apparent success could spur the area’s entrepreneurial-minded employees to follow in Milne’s footsteps.

On Dec. 1, 2010, after securing $1 million in equity financing from The Veridian Group Inc. and The Members Group, Dwolla went national with its peer-to-peer payment system, which allows users to exchange funds over a secure network.

Offering retailers an alternative to credit and debit card processors, Dwolla said in June that it surpassed the facilitation of $1 million in transactions a week, compared with $50,000 six months ago. The company recently announced a partnership with Premier Credit Union, and is prepared to roll out its services in conjunction with that financial institution and 11 others over the next 12 months.

Since starting as a two-man shop in November, Dwolla has grown to employ 15 people.

“We are not going to be 15-person company; we are going to be a 100-person company,” Milne said.

Doug Lewis, a specialist in the innovation and commercialization division of the Iowa Department of Economic Development, thinks if more companies such as Dwolla prove their potential — perhaps by going public or being acquired by a larger company — then perceived opportunities might help dispel an aversion to risk that keeps some workers in traditional corporate technology roles.

“It’s hard to get people (who are) used to getting a paycheck every week or every month, and have a pretty basic of idea of what working for a company is, to think they are going to work where they are working different hours and different things are expected of you,” Lewis said.

Though Milne may not be able to offer salaries that are competitive with larger technology companies such as Google Inc. or PayPal Inc., both of which are based in California’s Silicon Valley, the 28-year-old CEO said he is building a culture that empowers like-minded individuals to develop and deliver innovative products.

According to a report released in May by Dice Holdings Inc., which administers a website for technology and engineering professionals and the companies that seek to employ them, recent graduates with less than two years of experience earn $47,000 per year on average.

“I don’t think you can compete on money, but you can compete on culture and relationships,” Milne said. “People really respond to that. Our culture is definitely don’t spit and don’t be a jerk. We don’t have a dress code; you can wear a suit, you can wear a T-shirt, nobody really cares.

“Be brilliant.”

Milne founded Dwolla with the help of his chief technology officer, Shane Neuerburg, in December 2009. Since then, the company’s success has led a variety of people to leave steady jobs in search of something else.

In February, Dwolla added Charise Flynn, who worked with the company for nearly a year before making the transition from independent consultant to chief financial officer. Milne’s staff also includes former Principal Financial Group Inc. employee Karrie Zeman and Brandon Weber, a software developer who left Pioneer Hi-Bred International Inc. to join Dwolla.

“As companies achieve success, people will feel more comfortable going to those types of start-up companies,” Lewis said. “I think it depends a little on the culture that the entrepreneur is creating, too.”

Milne, who is creating a collaborative environment that that he hopes will attract the designers, developers and supporters of Web- and mobile-based applications that are needed to manage Dwolla’s growth, said he is looking inside and outside of Iowa to find them. He prefers to recruit from Silicon Prairie — as the Midwest is referred to in high-tech circles — but said he won’t shy away from scouting out tech talent in other regions if Iowa’s pool of qualified candidates dries up.

“In this company, we need really intelligent tech people,” Milne said. “Some are here, some might not be. I spend a lot of time on airplanes going to New York and San Francisco.”

Finding inspiration from Milne, Dwolla

Ben Milne and Dwolla have provided a clear start-up success story in Greater Des Moines.

Others have taken notice, to the point that those involved in the technology start-up scene in Des Moines use Dwolla as an example that it can be done here. It’s a two-fold effect, they say. Not only are people with ideas more likely to take a risk, but they’re more likely to find funding. Now the trick is leveraging that into more successful tech start-ups.

Here’s what local experts are saying about Dwolla and the impact it has had on the start-up culture in the area.

Mike Colwell
Executive director, Business Innovation Zone

Most of us who start something remember the first time we started something and not having anything, and wanting that first customer. I think the people who are business people need to take what these start-ups do and give it a try. Buy something with them. We see that a lot with Dwolla. Dwolla doesn’t have a lot of up-front costs, but it has got a lot of up-front time because a lot of people engage it. I think that’s why they got the traction to go beyond Des Moines is because they were well-exposed and accepted in Des Moines. It’s unfortunate that they’re the one that is held up all the time, because they’re not the only one. They’re the most recent. It’s cool, because I think their owner’s cool. But there are a lot of great start-ups here. It’s important to have start-ups that have succeeded for others to see so they believe they can succeed, too. I think it’s incredibly important. But I’d rather see 100 really successful start-ups than one Google-level start-up – and I really hope Dwolla gets that big someday. But I’d rather see 100 really successful companies that grow well and do well than get that one behemoth that becomes the only thing.

John Stineman
Executive director, Heartland Technology Alliance

Having the success story to point to is good. Somebody needs to show that it can be done, and can be done with local talent. So that’s the initial success. It’s always critical to get a movement started, to be able to point to ‘We want to do what they did.’ While Dwolla is still in start-up mode, they do a lot, so everybody wants to point to a success story. It’s inspirational. It inspires people to say ‘Well, I have an idea, too.’

Christian Renaud
Principal, StartupCity Des Moines

Ben Milne, when he got started with Dwolla, he would go talk to people and they’d say, ‘No, we don’t really have an appetite for start-ups, and we don’t want to fund you.’ He was grading the road, putting down the gravel and paving it for other people. At that point in time, (start-ups would say) ‘I couldn’t find the resources.’ Now I think what we’ve done in the last three or four years is we’ve created enough chatter that people feel like they’re part of the conversation, that they can do it, and that they have the resources to do that locally.