When people use adjectives like "burgeoning", "thriving", or "vibrant" to describe the start-up scene of an area, they could be exaggerating -- but in Durham, those words seem increasingly pertinent and accurate. The trouble is that our area’s large and growing start-up scene has largely eluded the public’s awareness.
That is in part because the start-ups remain partially hidden behind a veil of oak trees and faceless buildings. To shed more light on what's happening with startups and new enterprises, BCR is today launching a new series called The Durham Startup Seen that will take a closer look at the start-ups and entrepreneurs in the Bull City.
Joining BCR with this series is Justin Landwehr, our newest correspondent covering start-ups and entrepreneurship. Justin moved from rural Ohio to Raleigh in 2000, and from Raleigh to Durham in 2007 after graduating from NC State with Bachelor’s degrees in Statistics and Economics. He works as a research associate in RTP and lives in a “cozy” old brick ranch just north of the Park. You can reach Justin at email@example.com.
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What conditions are necessary (or, better yet, sufficient) for entrepreneurship to thrive in an area?
It is a question of great interest to city planners and business school professors everywhere, and while theories abound as to what the right conditions are, it seems apparent that Durham gets many of them right -- including, to name a few, the access to talent that comes with the “brain power” of the area (recently rated the second brainiest city in America), the growing cultural amenities, and the relatively low cost of operating here, especially with regard to office space.
But rather than rehearsing which conditions our city gets right, perhaps a more revealing angle is which conditions we are not getting wrong, and which conditions are steadily becoming less wrong. The answer potentially helps explain the rapid growth of start-ups and resources for start-ups in the area, and provides an especially optimistic view of the future.
For start-ups to thrive in an area, there needs to be a community of start-ups and a community around entrepreneurship. Historically, the community that existed in Durham and the Triangle either was not strong enough or not visible enough to gain much recognition outside of the Triangle or sometimes even within it.
One key element, then, to successfully developing start-ups and entrepreneurship is creating that visibility. And one of Durham's leading voices in that effort himself was late to notice all of the activity happening around town when he started his own tech start-up.
Taylor Mingos, CEO and founder of the Downtown Durham start-up Shoeboxed, notes that his company's siting in Durham was somewhat of a happy accident – a decision having resulted not from anything to do with the start-up scene, but rather from his ties to Duke and its interns.
Although Mingos spent his college years at Duke, it was not until he brought his company to downtown Durham that he realized the area had such a vibrant entrepreneurial community, complete with venture capitalists and all.
The problem was not so much a lack of a community or a lack of resources –fortunately the problem was an easier one to solve: it was a lack of visibility. And now Mingos is actively taking steps to combat that problem – more on that soon.
Besides visibility, perhaps an even bigger problem was that, until relatively recently, the Triangle start-up scene was lacking a central geographic area from which to grow.
"The biggest problem with the area was that it had no center. For a start-up scene to be good, it has to have tight-knit circles, and psychologically there was too big of a separation between the different parts of the Triangle," says Mingos.
Downtown Durham has emerged as that center.
Just this summer, two incubators – LaunchBox Digital and Joystick Labs – along with the Council for Entrepreneurial Development have signed leases in the new American Underground in the Tobacco District, and we can expect that eventually there will be 20 to 30 start-ups located in the American Underground at any given time.
A second major hindrance to local start-ups has been, if not solved, then significantly weakened -- access to the seed funding that gets ventures off the ground.
"Other than not being geographically tight, another problem with this area has been early-stage funding – early, early companies could not get money," Mingos adds. "LaunchBox Digital is now addressing that, and also a couple of deals recently got done where just guys with an idea got $250,000 [from angel investors]."
Having made significant progress on the lack of a geographic center and the lack of early-stage funding, the Triangle and Downtown Durham, in particular, is primed to see high and growing levels of entrepreneurial activity. All we need now is a way to track it and make it visible. Enter DowntownDurhamStartups.com.
Until recently, a Google search for “Durham start-ups” or even “Triangle start-ups” would return little worth mentioning – mostly pieces of news about companies raising capital, some dating back as far as 2007 – and nothing in the way of a directory of companies.
On July 2, Mingos launched Downtown Durham Startups, offering a range of information about start-ups in downtown and beyond, including a much-needed directory.
The mission of the site is to raise awareness and get people excited about our area’s start-up scene, including potential entrepreneurs, developers, investors, and executive-level recruits from around the country.
Mingos co-founded the site along with Aaron Houghton, chairman and co-founder of iContact and CEO of Preation. Mingos and Houghton had been talking about the idea for over a year before they found time to make it happen.
They decided that the site would focus on technology start-ups as opposed to biotechnology or life sciences start-ups whose needs are significantly different and already well-represented in the area. They are working in partnership with Jason Murtha, a web developer and a Durham resident since last June, who does the blogging for the site.
And despite the name, the site itself lists early-stage ventures well beyond the Bull City's urban core. The site’s directory of technology start-ups currently lists 14 start-ups in downtown Durham, 10 in greater Durham, and 21 in the surrounding Raleigh/RTP/Morrisville/Chapel Hill/Carborro area. It allows any founder to add a profile of their start-up, or, if their start-up is not already included in the directory, to request that it be listed.
Already about 15 new start-ups have submitted their names for directory inclusion but Mingos and Houghton, busy operating their own companies, have thus far been unable to process all of them.
They are also trying to find time to add content under the resources section of the web site, presenting information that can help entrepreneurs filter through the available resources in the area.
"We want the things on there to be really practical and the type of things you would hear about in small, intimate networking events – things like who’s really a good lawyer for start-ups or how much people are paying for rent," Mingos says.
"We hope it’s a good tool to show people what’s going on inside the area and over time becomes a good resource for entrepreneurs." Mingos added that while he and Houghton are adding as much content as quickly as they can, help would be appreciated. (Those interested can find contact information on the website.)
The solutions we are now seeing to the geographic center, early-stage funding, and visibility problems means that if you live in Durham and want to start a company, there's more resources available than ever before.
But before you get started, Taylor Mingos has just one suggestion: Go work for a start-up. "Lots of entrepreneurs don’t like to work for other people, but you really have to. You learn a lot and you get the connections you need."