Building Raleigh’s startup scene from the ground up

Officials from Raleigh and N.C. State announced a partnership Monday to make Raleigh a “city of innovation.” A conference, known as the Raleigh Innovation Summit, will take place on January 18th, 2012 to discuss ways to give the city’s startup scene a boost. Being that I’m not yet working again and I have experience with startups, I grabbed my camera and headed to the press conference, eager to hear more details.

The press has already done a good job covering the details, it turns out. Thus there’s not much I can add to this except a few thoughts after the fact.

City leaders committed to building this innovation center somewhere centrally in the city (i.e. likely downtown). Knowing this in advance, I was curious as to why the press conference was on the edge of Cary: on Pylon Drive off Blue Ridge Road. Turns out the conference was being held at one of N.C. State’s startups which has offices there.

I then recalled how HAHT Software, one of the beloved startups in my past, had also gotten started in one of the flex spaces on Pylon Drive. By the time I joined HAHT the company had moved to long-gone offices that once stood across from North Hills, though. That move came only after the first venture capital check cleared the bank.

That’s what startup companies need, a place to collaborate. And startup companies need that space to be as cheap as possible, at least until that first check clears.

Another one of my beloved startups was LastFoot (later NeTraverse). We took in gobs of angel investment but spent it very miserly, working in an old chiropractor’s office on Falls of Neuse near Strickland Road. Crammed into a small space, we tripped circuit breakers daily. We eventually expanded into the decaying empty space on the second floor, into a room my boss aptly dubbed the “meth lab.” Cables snaked across the bare concrete floor. Wallpaper peeled from wall. It was a wonderful experience! The camaraderie was amazing. After we merged with another company and built a glass-walled palace in RTP that magic vanished.

Years later, when I was put in charge of finding new office space for a startup I worked for that had just gotten bought, I took one of the company VPs over to N.C. State’s Centennial Campus to talk about a lease. The lease rates were through the roof! I swear I almost burst out laughing in the meeting. It was exactly what we didn’t want! Yes, it was nice space and I’m sure it appealed to some companies. It was anything but a startup environment, however.

That’s my only reservation about this partnership. I love N.C. State and anything that gets my alma mater working more closely with the City of Raleigh is a great thing. I just hope N.C. State has gained a better understanding of how to attract startup companies. Venture capitalists do not want most of their money being spent on office space. To this day, whenever I come across a supposed startup that’s working in Class A office space I know they’re doing it wrong.

Another obvious thing is that Raleigh still hasn’t figured out startups. A geek friend of mine lives in Raleigh and works at a Durham startup. She told me of a mixer put on in August by the Downtown Raleigh Alliance, designed to appeal to local technologists:

“The Downtown Raleigh Alliance had an event to try to lure startups last week – the culture clash couldn’t have been more glaring. The Raleighites were all in suits, the Durham nerds rolled in in cargo khakis and t-shirts. When we were invited, we asked for info about the place/time and we were given a PDF of a flyer. There was no website, no one posted anything on Twitter.

That said, I really, really hope Raleigh can figure out how to step up. I’m tired of commuting to Durham, dammit”

Raleigh still has a long way to go to get the startup thing right.