Where does North Carolina land compared to other states when it comes to entrepreneurship and startups taking off?
According to Thom Ruhe, president and CEO of NC IDEA, the Tar Heel State comes in just behind California, New York, Virginia, Massachusetts and Colorado. What the Tar Heel State won’t be any time soon, according to Ruhe, is the next Silicon Valley.
“It’s important to understand what Silicon Valley is and how it became ‘The Valley,’” Ruhe said. “It was a product of fortuitous combination – decades in the making – of innovation, technological and entrepreneurial talent and capital. Communities cannot simply aspire to be the next Valley, they need to understand how these elements can be attracted and leveraged for creating an ecosystem that is conducive to growing new companies.”
The Queen City and the Triad
One issue Ruhe has identified is a gap between the established business community and the local startup universe.
“Charlotte, for example, has a great concentration of professionals and capital, but they are disconnected from the entrepreneurial community,” Ruhe said. “It appears that it is not a priority for the region.
"This is not to say there isn’t anything happening; rather, the few programs that are operating are islands and not a priority in the bigger economic landscape. And this may be due to the strength of the financial industry and its dominant force in the economy.
“After all, things are good, so why divest in other priorities?" he continued. "Ironically, it has been my experience that sometimes it can be easier to garner public support for entrepreneurial priorities under challenging circumstances. Until the corporate, economic development, and foundation communities find common ground in prioritizing (and funding) entrepreneurship programs and services, they will continue to underperform their entrepreneurial potential."
UNC Charlotte’s Ventureprise is the area’s longest-serving incubator/accelerator, which has helped hundreds of startups since 1987, according to Ventureprise President Paul Wetenhall.
“Charlotte is a community that will likely continue to boom due to its business-friendly, commercially-oriented culture supported by assets such as the airport, Fortune 500 headquarters companies, and financial services sector concentration,” Wetenhall said. “The entrepreneurial community is growing, but it will be many years before it is substantial.
“However, Charlotte does lead the country in the likelihood that entrepreneurial companies become unicorns ($1 billion valuation)," Wetenhall said. "Tech Crunch published a study last week of the 144 U.S. unicorns with familiar names such as Uber and Airbnb at the top of the list by location. The San Francisco Bay area has 83 unicorns, New York has 22, Los Angeles has eight, Boston has five, Chicago has five, and Salt Lake City has four. Charlotte’s two – AvidXchange and Red Ventures – led their ranking of all metros, including San Francisco and New York, based on proportion of unicorns," Wetenhall said.
In the Greensboro/Triad region, the area “is trying hard to elevate the importance of entrepreneurship, but the area is experiencing growing pains born from not enough resources to support the well-intended ambitions of stakeholders," Ruhe said. “This can lead to unproductive competitiveness among organizations vying to lead programs and activities. But I am optimistic these growing pains are temporary, if the region has the patience and persistence to carry on.”
Mountain and coastal regions are generally made up of more rural communities, which have an entirely different set of challenges, Ruhe said.
“So one can see that we have several different challenges in North Carolina to improve entrepreneurial fortunes,” Ruhe said. “This challenge was the driving force behind our Ecosystem Partner Program. We are working within the various regions with partners that can best address the unique circumstances they are facing in supporting entrepreneurs. By bringing everyone together in support of these activities, we are better leveraging outcomes and encouraging more cooperation statewide.”
“A common challenge facing economic development efforts in these areas is density; namely, a lack of population, corporations, sources of capital and support resources,” Ruhe said. “And this is particularly pernicious because entrepreneurial potential is not predicated upon geography – or gender, race, or ethnicity, for that matter. High-potential ideas can come from anywhere. These communities have to overcome infrastructure limitations first, like access to broadband or professional services, then seek out what limited resources and programs that may exist to help them start and grow new companies.”
Josh Dorfman is the director of entrepreneurship at Venture Asheville and the managing director of Asheville Angels. He said entrepreneurship is becoming increasingly visible in the Ashville area, as well as across the Tar Heel State.
“Statewide initiatives from NC IDEA and InnovateNC are helping communities learn best practices to nurture and cultivate inclusive innovation,” Dorfman said. “Startup communities across the state are becoming more connected. Angel investor groups across the state are in greater and greater contact and are sharing deal flow to get North Carolina deals funded faster.”
“Maker spaces are launching," Dorfman continued. "Artists are gaining greater training and visibility as entrepreneurs. Combine these forces and we are going to witness a tidal wave of entrepreneurship in the years ahead,” Dorfman said. “It will be an incredibly positive force to empower our communities and help North Carolinians to feel that our collective destiny truly is in our own hands.”
Like Ruhe, Dorfman doesn’t think North Carolina is the next Silicon Valley. He also sees that as a positive for the state.
“In my view, it would be a mistake to attempt to replicate Silicon Valley,” Dorfman said. “We have different assets in North Carolina, and the opportunity to do certain things a lot better than Silicon Valley. For example, I greatly admire the inclusivity mission of American Underground in Durham. At a time when Silicon Valley continues to draw criticism for its “bro culture,” the folks in Durham have put tactics and hard metrics in place to measure their effectiveness in bringing more women and minorities into the startup ecosystem.”
The Port City is home to several startup districts and incubator spaces, the largest of which is the Center for Innovation and Entrepreneurship at The University of North Carolina at Wilmington, or UNCW CIE. Diane Durance is the director of the nearly four-year-old center, which is growing its membership and its co-working and office spaces.
“Over the past year, we’ve been increasing collaborations with other entrepreneurial support organizations and connection our entrepreneurs with resources and opportunities around the state and beyond,” Durance said.
Durance, who came to UNC from MiQuest, a Michigan nonprofit that supports early- and second-stage ventures across the state, lauded Wilmington for its “vibrant and engaged entrepreneurial community.”
“There is a strong appetite for supporting entrepreneurship from both the public and private sectors,” Durance said. “There’s substantial support from leading companies like Castle Branch, which maintains a state-of-the art co-working space for tech startups, and Live Oak Bank, which sponsors many of the networking events. There are events every week in all parts of town, there’s a variety of co-working spaces and a range of entrepreneurial support organizations providing free and low-cost services.”
Even the most startup-minded, innovative entrepreneurs can benefit from a collaborative, supportive environment.
“It’s hard to battle it out alone when you’re in uncharted territory and facing new challenges every day,” Durance said. “Yet, most entrepreneurs start out working alone. Startup-friendly communities and incubator spaces give entrepreneurs a ready-made, low-cost, built-in support network. Entrepreneurs are surrounded by peers and advisors that can answer their questions, share ideas, save them from costly mistakes, and make important introductions.”