RALEIGH — Raleigh Founded, formerly HQ Raleigh, may have had a name change — but the mission remains the same, says Jason Widen, one of its co-founders.
“Ultimately, [we’re here] to connect people with the networks and resources to help their businesses and organizations grow,” he said. “How we’ve gone about supporting that mission has definitely evolved, and it’s gotten a lot stronger.”
The company has come a long way since it first opens its door in 2011, the brainchild of Widen and co-founders Jesse Lipson, Brooks Bell and Christopher Gergen.
Back then, “we were a group of serial entrepreneurs that wanted to give back,” recalled Widen. It started out as a space to attract companies to incubate and grow, quickly becoming a landing spot for several high-impact, high-growth tech companies, most notably Pendo.
But its work has evolved over time, Widen said. These days, the company provides space and community support for other types of small businesses and economic development initiatives. The new name reflects that.
WRAL TechWire’s Chantal Allam recently had the chance to get the full story. Here’s what he had to say:
- So was the name change triggered by the trademark lawsuit filed by a subsidiary of the office space provider Regus earlier this year?
We’ve been contemplating a name change for some time. Our organization has evolved over the years, and we’ve got relationships with universities that have continued to evolve and mature. We’re doing much more economic development type of work. No, we did not want to do a name change during a pandemic While we did have a trademark on HQ, when you’ve got a bigger, more powerful company that can outspend you, it doesn’t leave you much choice. So while the lawsuit is what triggered the timing of the name change, we would have done so at a future date regardless. Anyways, we’re really proud of the new name. It’s worked out just fine and the response has been positive.
- So what’s the status with the lawsuit?
We came to terms with the other party and it’s all resolved.
- Talk to me about Raleigh Founded, and what’s behind the new name.
Actually, it was one of the first names we thought of years ago. It was Triangle Founded, way back in the early days, nine years ago. That actually was one of the names that floated to the top, at the time. And it’s this idea of founding something in your community. As we revisited the name, the thing that we really liked about it is this idea of a founded community. We’ve been a fixture, and community builder for some time now in Raleigh; and it’s something that we’re proud of. We have 400-plus companies that belong to our community, over 1,000 people. We wanted to create a seal or a badge of honor for those in our community.
- Besides being a co-working space, what does Raleigh Founded offer?
Well, we’ve always been more than a co-working space. The physical part of it is a big part of our business model. But we’ve always provided the resources and connections for people to scale and grow their businesses, and doing that in inclusive way so that’s been our mission from the beginning. When we started HQ, we were a group of serial entrepreneurs that got together and wanted to give back. Now, it’s turned into a full-blown business.
The community was looking for connecting and convening organization, and the four of us [Jesse Lipson, Brooks Bell and Christopher Gergen] happened to be in a position where we can give back in that way. Over time it’s just really evolved. What started out as a co-working space quickly turned into an organization that connected people to programming and funding, and all the necessary resources and tools that go into starting a business. Over time, it’s grown and we now have long-standing relationships with a number of universities, including NC State where we have a 22,000-square-foot presence on campus. It’s more than just the physical space there. We have a prototyping space there, so it’s a collaborative effort with the Garage, our academic partner, to help support entrepreneurs, and obviously the student base. A big part of it, too, is connecting talent to companies and, and vice versa. Most recently, we’ve had a number of organizations or companies reach out to help us help them from an economic development standpoint. An example would be Yanceyville. It’s a small town in North Carolina where they had people connecting to internet right outside the government buildings. There’s agtech presence there and they approached us about advising in their creation of an entrepreneurial hub for their community, not just for entrepreneurs but the community as large. We’ve done this type of work with a number of different organizations to include developers, as well.
- What’s the health status of Raleigh Founded as a business? Are you looking into becoming at all like a nonprofit?
We’re do well considering, but like many businesses, we’ve got some challenges and we are doing our best to navigate during these trying times. We are a for-profit business but value triple bottom line principles. Since the early days, it’s always been really important to us the social entrepreneurial side of what we do.
Like a lot of companies right now, we definitely have some challenges. But it’s been manageable. We have over 100,000 square feet of space and, as I mentioned before, we have over, 400 member companies. There have been some earlier stage companies that have had to save money and and work from home. There’s no doubt, but we’ve also been surprised by how many people have joined our community. Frankly, I think that there’s fatigue of working from home. And there are larger companies that are contemplating their workspaces and offerings and other options for a certain percentage of their workforce that can’t work from home, for whatever reasons, roommates, kids, internet issues, etc.
Don’t get me wrong, we’ve definitely faced some challenges; but we see the future of co-working to be strong. The next year, we expect to go through a little bit of turbulence and that’s to be expected. But we feel good about it. We’ve done an awful lot to make our spaces safe and comfortable for people. We’ve reconfigured furniture to be 6 feet apart and added sanitation, touchless fixtures, and additional cleaning measures. Mostly importantly, we’re requiring masks. We’re also offering virtual resources and events for our members.
I’ve gone through a challenging periods, and there’s always opportunity that comes out of that. For us, it’s been our virtual interaction with our community. We’ve always had a virtual presence, but the physical presence usually took precedence. With a pandemic, it’s given us time to really work through our virtual program, and to connect with our community in ways that we haven’t done so before. For example, I hold regular virtual office meetings with people that are looking for advice or connections or just want a sounding board. Are sponsors and partners continue to offer office hours with valuable resources and we have a number of exciting events. So we’ve definitely taken this time period to focus on offering value to our community outside of physical space.
- So how much of your business model is the co-working space?
A big percentage. Our flex memberships, which are those that don’t have a physical office space, actually increased by 30 percent. That cannot be just because people want to use our physical spaces. The use of he space is 25 or 30 percent of where we were pre- pandemic. We have 416 member companies, which is actually an increase from March. But we’ve lost some bigger start up teams that occupy office suites. So I think that the number of members that have been utilizing our community has gone down a little bit – from 1,062 to 1,020, as far as the number of people utilizing the space.
So we do have some challenges in backfilling suites, especially during a pandemic. Many companies are taking a wait and see approach. We’ve had a handful of companies, for whatever reasons, that have had to put a pause or leave our community that have office memberships. But we’ve also had new people join. Our total occupancy is right now is at 80 percent range, which is still good; it’s manageable.
We’re going to continue to go through challenges as people are navigating what to do next, and frankly until there’s some sort of treatment or vaccine. There’s going to continue to be some uncertainty. I don’t think the world is going to go back to the corner offices. We’re already seeing it from enterprise companies that are reaching out to us. They’re looking for additional alternatives for their employee base. I think a lot of companies are finding that their workforce has been productive working remotely. But at the same time, building culture is important. I think you’ll have to have a landing spot where you’re bringing people together at certain periods of time that may not all be at once.
Having a landing spot where employees can go; then outside of that, offering alternatives to the employee base where it doesn’t just have to be them working from home, and they can go in and be a part of a facility that offers meeting rooms and zoom rooms and and café-like space. There’s a place for us in doing that. We’re really flexible on how we’re interacting with companies, and we’re learning as we go just, like many people are right now.
- In the wake of the pandemic, the co-working sector seems to be changing rapidly. Are you concerned?
It’s a changing landscape, but I’m really optimistic of what the future holds. We’ll be perfectly positioned to be that third place outside of office and home. Just as long as we’re listening to our member base and we’re listening to the market, we’ll be fine. Leasing office space – is part of our business model but not our main goal. That’s not why we started HQ, now Raleigh Founded. The Founders are all serial entrepreneurs; we’ve all had successful careers and we did this to give back to the community. The social and economic impact is extremely important to all of us. The programmatic side of what we do will remain strong, and if anything, we’re leaning even further into that.
Our mission, ultimately, is to connect people with the networks and resources to help their businesses and organizations grow. I don’t think our mission has really changed. How we’ve gone about supporting that mission has definitely evolved, and it’s gotten a lot stronger.
- Where is Raleigh at right now in terms of economic development? How do you see the city developing, and Raleigh Founded’s role in that?
We’re really fortunate to live in this region. Michael Haley with Wake County Economic Development recently shared a CBRE report and site selection report that showed the Triangle’s strength as a place companies want to move. The Triangle has been one of the fastest growing communities in the country for a number of years now. As such I think we’re going to recover more quickly and well positioned to come out of this much more quickly that maybe some other places are in the country. This is anecdotal, but I’m being invited to tour folks that are looking at moving from some of the bigger cities. I’m seeing an interest by companies to save money and to move to a lesser populated areas where there’s access to a better quality of life for their employees. That’s not to say that, like the rest of the country, we’re not going to go through a down period for the next year or two. That’s inevitable, but I think the building blocks are strong.