Editor’s note: Over the past two decades, Durham’s downtown has been reborn with technology startups helping spark the rebirth. But what’s ahead over the next 20 years? Can the city maintain its momentum? WRALTechWire’s Jason Parker reports on Durham’s future.
DURHAM, N.C. – “I feel like we’re at this point in Durham where we’ve moved on from being an unrecognized player in the startup scene,” says Adam Klein, chief strategist for the American Underground. “Now we’ve got to become a really strong emerging market for startups.”
We’re discussing the budding entrepreneurial ecosystem in downtown Durham, and the concentration of entrepreneurs that operate in the American Underground, which Klein manages.
The future, says Klein, “is what we’ve got to focus on now.”
“We’re starting to spend time on the things and projects that will put us in the same breath as Austin, or as Boston.”
“We’ve got to execute on the things that will get us to the next level,” says Klein, emphasizing the need for continued organic growth in the entrepreneurial economy.
The entrepreneurial economy is expanding, says Klein, one of the main reasons that he’s spearheading a new downtown project – the expansion of the American Underground to downtown Durham’s Main Street.
“With the expansion to Main Street,” says Klein, “we’ll have 100 startups this fall.”
That’s not enough to compete with Austin, Boston, or Silicon Valley, yet it is a great first step. Klein is focusing his time on what comes next.
Throughout this series, “The New Bull City,” we’ve studied the history of Durham’s entrepreneurial economy and the emerging companies and organizations that are extending the technology and life science industries in downtown and in Durham.
It is time, now, for us to explore Durham’s future. What characteristics will Durham’s entrepreneurial economy exhibit in 2025? Will Durham be both an incredible place to live, to work, and to visit in the year 2040? Will the city keep its gritty, authentic community and culture as it grows?
The Bull City in 2015: Organized Momentum
One of Klein’s projects is organizing Paradoxos, along with many of the individuals and groups that we have quoted in this series.
Paradoxos is a two-day festival next week celebrating the power of ideas and collaboration. It represents the “maximum collisions of people and ideas” for the entrepreneurial community, according to Klein and the Paradoxos team.
Along with Klein, Chris Heivly and his team at Triangle Startup Factory, Joan Siefert Rose of CED, Casey Steinbacher of the Durham Chamber of Commerce, and Matthew Coppedge, COO of Downtown Durham Inc., have all partnered to plan an event that is thought of “as what South By Southwest was before it was SXSW,” according to Klein.
In addition to the new American Underground space opening on Main Street, a local tech entrepreneur, Aaron Averill, recently opened a renovated space at 106 West Parrish Street downtown.
The building, which features a roof deck, opened in late 2012 and entrepreneurs have flocked to it, almost completely filling the desk space.
With the continued development of downtown buildings, and the continued focus on the entrepreneurial economy from its earliest stages with organizations like Groundwork Labs, NC IDEA, Triangle Startup Factory and CED, Durham certainly appears to be a city bursting with momentum.
Durham will have to organize, and figure out its role in the larger entrepreneurial community within the Triangle, said Joan Siefert Rose, president of CED.
“While Durham has a lot going on for it, we are not an island.” said Rose. “We need to connect more within the region and especially outside of it.”
The Bull City in 2025: A “Tier-2” Entrepreneurial Community
“We’re on a great trajectory,” said Chris Heivly, managing partner of Triangle Startup Factory, “and in 2025, I don’t see any reason why we wouldn’t be a healthy, vibrant, tier-two entrepreneurial community.”
There are currently only three tier-one communities, said Heivly, and they are Silicon Valley, Boston and New York City.
“I see no slow down, plateaus or hiccups thus far,” said Heivly, discussing potential barriers to growth and expansion of Durham’s entrepreneurial economy. “I really think we’re good,” said Heivly, and in ten years will compare to cities like Boulder, Austin, Seattle, Nashville and Chicago.
Archive Social is a company that graduated from Heivly’s Triangle Startup Factory, so it may not be a surprise that founder and CEO Anil Chawla shares similar aspirations for Durham.
Durham’s community is at a place where it is self-sustaining, said Chawla, “but we still need more success stories.”
“It starts with having really strong companies,” said Chawla, “with our entrepreneurs doing well.” This has started happening, said Chawla, “and as long as this energy and focus continues, “there’s no reason why we couldn’t be a world-class hub of entrepreneurship in ten years.”
Of course, said Chawla, “that’s not the goal – being recognized as a startup hub,” clarifying his position. “That will be a side effect.”
“The goal is to build great companies, to support entrepreneurs, and to inspire folks who did not know that this type of life existed,” said Chawla. “If you make that your goal, this place will turn into the hub.”
The Next Generation: the Bull City in 2040
Downtown Durham will have 500 early- and growth-stage startups in 2040. This is the gauntlet laid out by Adam Klein.
“All of the downtown space is ripe for an unbelievable amount of entrepreneurial activity,” said Klein.
“Downtown Durham will be a part of the swath of innovation,” said Joan Siefert Rose, “that runs through Durham to RTP, all the way to downtown Raleigh, down to Chapel Hill.”
“What happens with RTP,” asks Rose, rhetorically. The Research Triangle Park is currently developing a bold and innovative master plan designed to create mixed-use space and facilities that will attract entrepreneurial companies and creative professionals.
“It will be a huge driver of the economy,” predicts Rose, “and it will only strengthen Durham.”
Durham will retain its culture. “I would hope that Durham is still, fundamentally, this interesting, funky, compelling place,” said Joe Colopy, co-founder and CEO of Bronto Software. “There’s still a lot of room – there’s still a lot of buildings,” said Colopy.
These are predictions, of course, not guarantees.
There are still plenty of barriers that Durham faces as it continues to grow.
“Right now, we’re being held back by a lack of quality housing, particularly for the 25-35 year old crowd,” said Brad Brinegar, CEO of McKinney. “Once we have 1,000 – 2,000 high quality residential units, everything is going to fly.”
“It will be the next game-changer,” said Brinegar.
Solving the housing problem will be a complex challenge, said Adam Klein, chief strategist of the American Underground. “My wife and I live downtown,” said Klein, “and the change in the cost of living downtown in the next 20 years is a concern.”
“Durham still needs more housing opportunities,” said Joni Madison, COO of McKinney, “and needs to pay attention to making sure those housing opportunities are available to various levels of socio-economic needs, including families and young people.”
“It can’t all be done on $300,000 condos,” said Madison, “I’ve got to be able to house someone who is just starting their career at McKinney and who wants to live downtown.”
Downtown Durham, historically, has been quite affordable – for working (entrepreneurs love and need affordable and flexible space) – and for living. It’s the affordability of downtown, said Klein, “that allows for creativity, that allows entrepreneurs to dabble in a lot of things.”
“We can’t lose our creativity,” said Klein, “and the key is keeping Durham’s affordability.”
Bullish on the Bull City
Each person and each entrepreneur to whom I’ve spoken believes in Durham. One of my favorite entrepreneurial qualities is the entrepreneur’s unyielding sense of optimism, the belief that, no matter what, things will improve.
Durham’s community members, its entrepreneurs, and its support professionals are all extremely optimistic about Durham’s prospects. This came across crystal clear in all 29 of my conversations in the past three weeks.
“If the Triangle were a stock, you would be buying it,” said Jud Bowman, founder and CEO of Appia.
Bowman is now considered in the class of the experienced entrepreneurs, the first-movers of the post-2001 tech bubble. There is a new class, a rising tide of entrepreneurs that call downtown Durham home.
“There’s a new wave of entrepreneurs,” said Chris Heivly, “and the future of Durham will be built on the backs of these new entrepreneurs.”
“I’m still bullish on Durham,” he added, “but I wish there were more angel investments in the area.”
It’s a common criticism. Ask an entrepreneur what is lacking in the entrepreneurial economy of the Triangle and they will generally tell you two things: lack of quality talent, and lack of access to funding sources.
In the next piece of our series, “The New Bull City” will examine the current funding environment, and the history of angel and venture capital in Durham between 1999 and 2013.