Editor’s note: Tom Snyder is executive director of RIoT, the Internet of Things users group based in Raleigh.
RALEIGH — Last week, NC IDEA led a two-day, statewide entrepreneurship conference that attracted nearly 500 attendees. One of the speakers, Craig Buerstatte with the Economic Development Administration in Washington DC, noted that it was the first ever state-wide entrepreneurship summit in the United States. A number of nationally known speakers and educators attended the energized inaugural event.
Kudos to NC IDEA, and to Governor Roy Cooper — who formed the NC Governor’s Entrepreneurship Council from which the conference was born — for achieving this bold, national first. Both Cooper and Raleigh Mayor-Elect, Mary-Ann Baldwin, spoke at the event, touting the health of the state’s economy, the importance of small- and medium-sized businesses, and the growth of support resources for new company formation. Without question, there are great stories to tell about startups and entrepreneurship in the state.
However, what can be questioned is how well the support resources in North Carolina are working in a collaborative, strategically aligned way.
It is one thing to promote good things happening independently within a geographic region; it’s another to promote outcomes resultant of a coordinated effort.
Thom Ruhe, master of ceremonies for the event and CEO of NC IDEA, concluded the event with the coining of a new term — ecosysteming. In his words, ecosysteming is the fostering of inclusive economic development via entrepreneurship. In practice, ecosysteming should bring together diverse groups and individuals with the willingness, knowledge, time, and resources to help people realize their full entrepreneurial potential, thereby strengthening community and the economy.
How does North Carolina measure up to this definition? Are we really coming together, or are our entrepreneurial achievements the combined result of co-located but siloed efforts? There are a few measures to consider as we attempt to answer this question.
Is distribution even?
One measure is whether our state’s entrepreneurship activity is evenly distributed.
At the top end of the spectrum are the unicorn startups. Four cities in North Carolina can claim at least one of the 7 unicorn companies from this state (Cary, Raleigh, Charlotte, and Wilmington). According to CB Insights, North Carolina is second only to California for the number of different cities within a state to produce unicorn companies.
And in addition to startups achieving that “more than $1 billion valuation,” there are numerous examples of startup successes from Asheville to Wilmington, Yanceyville to Hickory. Coworking spaces blanket the state, with even smaller communities making significant investment to provide community space for small business to grow.
But that simple distribution data is not enough to prove we are or are not working in a coordinated manner.
Another set of data to consider is which organizations are working statewide.
NC Tech fits in that category, long a leader in business support across North Carolina. At their awards gala last week, they released the annual Top 10 Startups to Watch List, of which half were companies from outside the Triangle. Entrepreneurial balance is increasing across the state year over year.
CED is the longest-running entrepreneurship support organization in the nation, headquartered right here in NC. That alone is another great statistic to support that North Carolina is a national leader in new business formation and growth. CED certainly supports the entire state. Still, their 2018 report shows that 90 percent of venture investment statewide centered on Triangle and Charlotte-based companies. This is not a huge endorsement for coordinated investment activity statewide.
At a more regional level, there are promising signs. Coordinated investment momentum continues to grow with the success of the Triangle Venture Alliance. This effort has succeeded at what some thought impossible – getting Duke, NC State and UNC alumni to all work together towards mutually beneficial startup investments.
North Carolina also passed the Paces Act in recent years, making equity crowdfunding legal so that anyone can participate in helping small businesses raise capital. BatteryXChange, a Charlotte-based phone battery rental platform is currently raising funds on the platform requiring a minimum investment of only $250. Suddenly anyone in the state can participate as an equity investor to startups — an area previously only accessible to citizens making more than $200,000 per year and having a $1 million net worth.
A positive sign of super-regional coordination launched this year under Research Triangle Cleantech Cluster’s leadership in partnership with the Joules Accelerator. The organizations made a commitment to work collaboratively along the entire I-85 corridor between Charlotte and the Triangle, supported by $750,000 in economic development administration funding matched by another large industry consortium of matching funds and services.
RIoT is also expanding programming into rural areas. It is encouraging to see municipal investment in entrepreneurship, such the GigEast Exchange opening in Wilson next spring. RIoT and Wilson demonstrate public partnership with the nonprofit community—which then extends to over 85 corporate partners providing financial and mentoring support. This is a seed of statewide coordination that is growing quickly.
Local organizers are likewise working to better coordinate efforts. Mark Bavisotto, co-founder of the Startup Summit, took the reins to begin the first Triangle Entrepreneurship Week in October. While Triangle-centric, it was an example of working collaboratively with several other event organizers to achieve the proverbial 1+1=3 additive benefit.
The City of Raleigh made two significant decisions in 2019. They funded a new Raleigh Impact Partner Grant program, designed to support economic development organizations, but smartly made it a requirement that all grantees must work together to support each others’ programs. This created much more impact than if the grant winners had worked independently—the city should be commended for that simple step that brought added benefit.
What does coordinated effort look like?
Cross-promoting of events is common among economic development organizations. Nonprofit newsletters and media calendars do a great job of helping each other to connect to entrepreneurs and resources through events. Bringing people together is the first step towards collaboration.
The next step up in collaboration is driving big projects with multiple stakeholder groups.
In a unique effort, not known outside of North Carolina, government entrepreneurs are working together on smart city data management. A significant number of municipal, county and state government departments are all working collaboratively to build a data sharing framework – with stormwater management for emergency response as a first use case – upon which startup companies can pilot solutions benefiting citizens.
Across most of the US, smart city solutions are siloed within each municipal government. Few efforts are driven by startups and government intrapreneurs working together. This is an project where NC is demonstrating statewide leadership in coordinated and aligned effort.
What remains to authentically claim statewide collaboration at next year’s Entrepreneurship Summit?
It remains to be seen whether the Governor’s Entrepreneurship Council will succeed in driving statewide, coordinated programs to create the same kind of “partnership effect” that is showing up in the Triangle and a few larger metros. Regional collaboration efforts to date are largely grass-roots in nature, with entrepreneurial organizations like NC IDEA “walking the talk” of collaboration.
The final step is to see if top-down leadership is shown by the legislature and statewide organizations that can not only be conveners and promoters, but also funders. Nonprofit consortium groups like RTCC and RIoT have done admirably to pool corporate funding to drive meaningful, collaborative programs with multiple stakeholders.
Municipalities are doing their part with impact grants and local investment. But those resources pale in comparison to the impact the state government can bring to bear.
Will North Carolina follow the example of Singapore and Israel that significantly fund entrepreneurship at a national scale, and states like Utah and Colorado that top the nation in access to small business loans? Some places make significant financial investment in themselves, versus a primary strategy of big tax incentives to attract outside companies to immigrate.
Entrepreneurial energy and momentum are high within the state. NC IDEA is training 100,000 North Carolinians in an entrepreneurial mindset through their Ice House Program. To borrow from the startup vernacular, time will tell if state level coordination and funding increase sufficiently to drive entrepreneurship to hockey-stick growth.
But without question, the Governor’s Council, and last week’s summit moved the state at least one step forward in deliberate ecosysteming.