Tuesday, May 3, 2011

The Many Faces of Incubation in Durham, North Carolina

By Matthew Tarleton, Project Manager.  

Oh, Durham, home to Duke University. If you’re a college basketball fan and you didn’t attend Duke, then a string of curse words are probably running through your mind right now. If you’re a college football fan, well, you may have never heard of Duke University.  

Raised as a Tar Heel that attended school in Durham, I will always jump on an opportunity to take a shot at Duke. And I couldn’t possibly write anything glowing about Durham without first getting that out of my system. So with that behind us, I must say that Durham has come a long, long way since my last days as a resident of the Research Triangle around the turn of the millennium.  

Over the course of the last ten years, a lot has changed in Durham. In the late 1990s, Downtown Durham was dead. D.E.A.D. My best friend owned and operated a deli in the first floor of the largest building in Downtown Durham. He ran a great business and had many loyal customers, but (no offense, John) I think that was partly due to the fact that his deli was the only place to buy lunch downtown. Today, he’d have a lot more competition.  

Since the mid-1990s, a number of new developments have reshaped Durham as young people continue to flock to the Research Triangle. The new Durham Bulls Athletic Park opened in 1995, a catalytic development that supported the redevelopment of Durham’s many abandoned tobacco warehouses (The American Tobacco Project) and the emergence of new entertainment options such as the Durham Performing Arts Center, the largest performing arts center in the Carolinas. Downtown still has its challenges, many born from the recent financial crisis and its affect on the development community. That building that my friend’s deli once occupied has been vacant for years now as a developer attempt to convert the 17-story art-deco tower into a hotel and spa. Like most other urban cores, office vacancy has risen. But entrepreneurs, like my friend John, are finding that these challenges have given rise to many new opportunities in and around Downtown Durham.  

If The Cookery had been established in the late 1990s, I’m rather confident that my friend John would have found a way into the facility. Today, John runs the kitchen for New York City’s most successful and celebrated wine bar. He’s worked in Michelin-starred establishments and built an enviable career for himself in a City where even the most driven and talented individuals fail on a daily basis. But a decade ago, he was running his deli, operating another small restaurant on the edge of downtown, and constantly looking for new and exciting business opportunities, from property management to event promotion to owning a record store. And all of this came before the age of 25. He was the type of young entrepreneur that every community craves. And while the Big Apple came calling, I can’t help but wonder if he might have stayed in Durham if The Cookery and other incubators were established at the turn of the millennium.  

The Cookery is one of many new incubators that have emerged in Durham in recent years. It is a self-described “commercial food production facility with a small food-business incubation program.” Its primary goal: to lower the risk threshold for opening a culinary business. The Cookery provides a state of the art kitchen and bakery to “members” who rent low-cost space to experiment with ideas, launch their catering business, and support food truck operation. Beginning this fall, The Cookery will start offering courses in culinary technique and restaurant management, as well as hands-on design and marketing services to help entrepreneurs launch their business.  

American Underground is shared office space that is home to multiple tenants which have access to low-cost space, shared conference rooms, and a shared break room and arcade. It is not a traditional incubator, but rather, it is envisioned as a new corporate campus that enhances networking opportunities and connects entrepreneurs to other forms of assistance. Many of its tenants are small technology companies that are developing new concepts for mobile and web-based applications. However, American Underground is also home to the Council for Entrepreneurial Development(CED), Joystick Labs, and LaunchBox Digital.  

CED provides “education, mentoring and capital formation resources to new and existing high-growth entrepreneurs through conferences, forums, and workshops on entrepreneurial management and finance.”  Joystick Labs seeks to “identify, seed, accelerate, and launch the next generation of best and brightest digitally distributed video game entrepreneurs” by providing early-stage seed funding, mentorship, and education. There are currently five companies operating with Joystick Labs’ assistance.  LaunchBox Digital is a “seed-state investment program” that provides hands on mentorship and capital to launch new startups. Each year the accelerator program selects 7-10 companies out of hundreds of applicants and provides them each with $20,000 in seed capital, three months of intensive mentorship, and the opportunity to pitch their ideas to more than 100 venture capitalists and angel investors at the end of the program. The program has been tremendously successful with participating companies receiving millions of dollars in additional capital after completing the program.  

Bull City Forward, another new and visionary initiative, is a public-private partnership with numerous founding funders. Unlike most incubators which focus on technology companies, Bull City Forward is a social entrepreneurship incubator, supporting social entrepreneurs develop solutions to social problems through “peer networking, enhanced collaboration, mentorship, skill-building, support services, access to talent, and access to capital.” Bull City Forward operates on a membership model with a tired structure providing a variety of benefits to social entrepreneurs from a simple support service membership ($25/month) to low-cost office space ($250/month).  

And last but not least, the Durham Chamber of Commerce and Downtown Durham, Inc. have recently launched their Bull City Startup Stampede initiative. The initiative invited startups from Durham and across the country to apply for two months of free downtown office space, a business “boot camp,” free high-speed wireless, and many other benefits. Eleven startups were chosen from over seventy applicants. Thanks to contributions from partners throughout the community, the initiative will only cost the Chamber $8,000 over the two month period. Participating companies were selected in late March, and Durham hopes that all eleven can be steered to one of the many aforementioned incubators for hands-on assistance and access to capital following completion of the two month program.  

Each of the aforementioned incubation initiatives have been launched in the last three years. And while many communities are beginning to finally recognize the role and impact of small businesses in their community, and aggressively invest in them, few are doing it at the scale and scope seen in Durham. And few are doing it in such creative ways. A social entrepreneurship incubator? An incubator for food trucks? There’s a lot that other communities can learn from Durham. And for my friend John – if you’re reading – maybe a culinary incubator is your next foray. Atlanta is calling you!