Editor’s note: In the first of an exclusive multi-part series, WRAL TechWire’s Jason Parker examines the rapid changes being forced on the Research Triangle’s entrepreneurial ecosystem by the onslaught of the COVID-19 pandemic. A vivid snapshot of the evolution taking place is provided by looking at the Triangle’s numerous coworking spaces. Helping incubate hundreds of companies across the region, these centers are adopting too, thus providing at least an indicator of what’s to come.in the “new normal” of a post-pandemic economy. The focus of this story is Raleigh-Cary. The second part of the series, published May 25, focuses on Durham.
RALEIGH – Entrepreneurs at startups and emerging companies in North Carolina’s capital as well as Cary are dealing with what’s being called an “unprecedented disruption.” And as the state begins to reopen for business, what impact the COVID-19 pandemic will have going forward remains unclear.
“There is no doubt the economy has suffered an unprecedented disruption,” said Michael Haley, executive director of Wake County Economic Development and Senior Vice President of the Raleigh Chamber. “Including a large number of unemployed workers and the temporary or permanent closing of many local businesses.”
Those still alive also are being forced to adapt to a world in which virtual has become reality, from working at home orders requiring telework to events and programs that have all gone online just as houses of worship. But at least these firms have avoid for the most part having to shut down completely in these days of “social distancing” as is the case with restaurants and entertainment.
And Raleigh is well-positioned to rebound, said Haley, citing a recent Forbes article that ranked Raleigh (and Durham) as two of the top ten cities in the United States well-positioned for a post-COVID-19 recovery.
“A major sign of confidence and viability of the market is the recent announcement from Bandwidth to expand its headquarters and hire more than 1,100 new employees,” said Haley. “The fundamentals of the market are holding strong and a rebound will occur.”
Wake County Economic Development, or WCED, is a program of the Raleigh Chamber, and provides support for 12 municipalities and Research Triangle Park, said Haley. Even with the global spread of the coronavirus, the organization continues to implement its five-year plan, said Haley, which positions the region as a preferred destination for startups, companies, headquarter locations, and highly-skilled professional talent.
And the organization was quick to respond, said Haley, pivoting to support small business, existing industry, and rapid response, as well as providing resources to help businesses of all sizes and across all industries navigate in an uncertain economic climate.
“While our response efforts are obviously top of mind, we are still implementing key elements of our economic development strategic plan,” said Haley. “We are shifting an increasing focus toward a post-response reopening and recovery period.”
So what’s next?
A big question is about the region’s coworking industry where hundreds of companies – 400 alone at HQ Raleigh – will look like as companies at all levels become more virtual.
“It’s harder to stay connected because we’re not in the coworking spaces that have been such a core part of our local startup ecosystem,” said Bridget Harrington, executive director of Innovate Raleigh.
But she also stressed: “It’s worth remembering that often great companies are born in times of crisis.”
The WRAL Tech Wire Startup Guide tracks the community hubs, incubators, and coworking spaces open to entrepreneurs across the Triangle. And constant changes in programs as well as offerings are tracked in what is described as a “living document.” Changes can be expected in the Guide as more companies and organizations embrace telecommuting.
“The work-from-home model has become the norm,” said Jay Bigelow, vice president of entrepreneurship at the Council for Entrepreneurial Development in Durham, one of the largest such organizations in the country. “Folks have settled into this new operating paradigm.”
So, if the new normal is working from home, rather than from coworking facilities, how are those facilities responding to the closure and subsequent “Phase 1” reopening?
“I’m surprised at how little my workday has changed,” said David Gardner, founder and managing partner of Cofounders Capital, which operates the Cofounders Lab in partnership with the Town of Cary from the Cary Innovation Center in downtown.
Cary’s Office Evolution, which provides offices, meeting rooms, virtual offices, and coworking space, is open and is operating with new “commonsense steps” and protocols including handwashing at regular intervals, conducting a self-assessment prior to deciding to come to the physical location, wiping down high-touch surfaces, and moving to single-use disposables.
It’s not alone.
Vibe, a coworking community-based at the Cary Towne Center Mall, is inviting people to “come out of your isolation and join our community,” according to their website, but it is instituting a daily limit of 15 workers in the facility. “We will be following all recommended distancing and cleaning procedures and require that all members contribute to that effort to maintain a healthy work environment,” the website reads.
American Undergraound, which is operated by WRAL TechWire’s corporate parent Capitol Broadcasting, is adapting, too.
“We want to do everything we can to get back to work but we need your help,” reads the American Underground website. Members can now access AU@Raleigh on Fayetteville Street as the organization implements its reopening plan, which relies on members. “We need the active participation of all AU community members to keep our community safe.”
One new addition from American Underground is the reconstruction of the organization’s virtual membership and the relaunching of the Landing Spot program to assist folks who’ve lost a job transition into entrepreneurship or find a role in a growing startup.
And change doesn’t mean the end of new offerings.
Industrious, which is still planning to open a second Raleigh location in the Wells Fargo Capitol Center, has reopened their Charter Square location on Fayetteville Street, with a new office layout designed to keep members adhering to social distancing guidelines. This layout includes one-way walking paths, an abundance of signage, reduced capacity, reconfigured furniture, and changing the operations of the facility’s HVAC systems.
Meanwhile, WeWork remains open despite its own financial challenges.
“WeWork is a service provider and we have an obligation to keep our buildings open,” reads a statement from Marcelo Claure, executive chairman of WeWork, which operates one facility in Raleigh on Glenwood Avenue. “We too have members counting on us to remain open so they can run their companies.” The company has opened every North American location, including its Raleigh one, and states that it is following CDC and WHO guidance, increasing sanitation practices, and suspending all employee and member events.
But others are temproarily closed.
- The three Loading Dock coworking spaces—the flagship campus and locations in the Prince Hall and Boylan neighborhoods of Raleigh—are closed, though the organization’s Instagram account indicated in a post from May 12 that the organization does plan to reopen.
- Also closed is the Shaw University Innovation & Entrepreneurship Center, though staff continue to work remotely to support the community and are providing resources through their website to small businesses and entrepreneurs.
- Across town, the Entrepreneurship Garage at North Carolina State University has been closed since March 17, though Garage staff remained available to answer questions and provide support through a variety of online channels.
Under social distancing and safety guidelines, Loading Dock like other hubs will reopen with an extensive list of changes.
HQ Raleigh’s not standing still
HQ Raleigh reopened three of their Raleigh locations—in the Warehouse District, the Capital Club, and Gateway—on May 11, though the team had also previously launched HQ Raleigh Virtual to keep the community connected and informed. The organization announced these changes in building access, social distancing practices, and sanitation procedures, to keep members healthy and safe.
“During Phase 1, HQ will be permitted to open and we will welcome all our members into our spaces,” reads the HQ Raleigh website. “It is our goal to make HQ a safe work environment.”
As for Nest …
“We are currently member-only access and will limit conference room rentals, day pass availability, and guest access,” said Michael Hobgood, founder of Nest Raleigh. The organization has partnered with the sanitization company, RedBird NC, to disinfect the workspace daily, and has made other operational changes like touchless devices and foot-operated doors.
“The only way we could feel good about reopening Nest is by resetting to zero, every day, which means cleaning and sanitizing every day.” He reviewed video footage from how people were utilizing the facility to inform processes and procedures that could be implemented in order to mitigate risk.
Hobgood and RedBird NC have also provided assistance to other companies about how to prepare their facilities to open following the phased guidelines and guidance from governmental agencies and the WHO. On any given day, said Hobgood, there’s only about 15–25 percent of typical pre-COVID-19 occupancy at Nest Raleigh. “To be honest, opening anywhere will include some degree of risk,” said Hobgood. “With the data we are seeing, we feel comfortable providing space resources to those that choose to be getting back out there.”
Market is still changing
“We will not reopen the economy,” says Tom Synder, executive director of NC RIoT, which typically operates out of HQ Raleigh’s Warehouse location. “The economy never closed… COVID-19 fundamentally changed the market and it is still changing.”
The organizations and companies that recognize the market and economic climate have changed, said Snyder, “and adapt to solve new market problems will win.”
Will there be a new normal for coworking organizations, or will there be a reversion to standard operations for flexible, affordable, community-based workspace with changing demand?
“I used to sit at my desk each morning and field a hundred emails and back-to-back meetings,” said Cofounder’s Gardner. “Now I sit at my desk each morning and field a hundred emails and back-to-back meetings all day, they are just on a screen instead across the desk.”
“We’re going to see people use space differently. Coworking tends to be dense, that’s how we make it affordable for our communities, by sharing resources.” There will be some shifts in the short-term, said Hobgood, but people will still need space, and the organizations that are prepared to adjust their models will be best equipped and positioned to survive, and thrive, as the economy recovers.
Coworking spaces will most likely pivot to pick up more digital resources that their communities can use, he said. That’s what he plans to do with Nest Raleigh.
“We’re shifting from a space that has walls,” said Hobgood, “to a resource for communities to access and use technology.”
And companies will be adjusting right along with their hosts.