Video Games: From Consumer to Creator

By Evan Robertson, Senior Project Associate

Describing the maker movement as in full bloom is both accurate and premature. Maker spaces have risen throughout the country, from large metro areas like Austin to small cities such as Watertown, SD. The idea behind these spaces is simple, provide tools for creation to a general audience and watch them create. For the most part, the creation occurring in these maker spaces is largely physical. Sure, 3-D printing is greatly assisted by AutoCAD or other computer design programs, but the idea is to turn whatever is produced on the computer into something tangible. To me, the maker space is indicative of a larger trend that is at this point obvious: consumerism is shifting to something more active, something more engaging. This shift is not only impacting the physical goods we buy, but also the digital goods we consume.

For the last three decades, video game creation was an esoteric art. Few possessed both the artistic acumen and technical know-how for combining various artistic fields (music composition, graphic design and animation) and computer programming. Triple A video games of today (a term used much in the same sense as the movie industry: high budget, tons of special effects, high quality) can take years to develop with hundreds of staff leveraging countless skill sets. It presents the same logistical challenges as creating a film, only everything is digital and the audience has an immense impact on how the story unfolds. Game production is at a crossroads – some even question whether the industry is in decline. Triple A games of today have a habit of overpromising and under delivering, leaving many gamers wondering “haven’t I already played this?” or questioning whether their time is better spent elsewhere.

Indie games have been the game industry’s one bright spot (excluding mobile gaming) as of late. Online marketplaces such as STEAM have provided indie game developers with a large, captive audience. The Indie space has also seen a number of high profile successes. The most notable of which is Minecraft, recently acquired by Microsoft to the tune of $2.5 billion (with a B), is perhaps the indie movement’s greatest success story, so far. As indie games continue to rise, game developers are doing something rather unusual – they are providing their creation tools at low or no cost to the general public. It is akin to Steven Spielberg putting a camera in your hands, giving you access to his special effects department, and telling you to go make a movie.

Epic Games, Inc. kicked things off this week with an announcement that their video game engine, Unreal 4, would be free to the public – stipulating a five percent royalty for any sales over $3,000. Unity Technologies, a company solely focused on providing indie developers with a user friendly game engine, followed suit announcing that their new Unity Engine 5 is free for personal use, royalty free for sales under $100,000. With these tools available to an increasingly discontented audience, gamers may quickly adopt the maker movement – shifting from content consumers to content creators.

So, what does this all mean for economic development? As we continue to preserve space for makers, those engaged in producing physical products, we must also set aside creation space for those engaged in digital creation – ideally, both should be co-located. Moreover, just as makers need high end CNC equipment; digital makers need high end computers with top of the line graphics cards that may be financially out of their reach. Ensuring access to this equipment as well as collaborative space could spur entrepreneurship activity in the electronic entertainment industry.

THINC SPACE opens in Waco

By Jim Vaughan, Senior Fellow.  

Baylor University and the Greater Waco Chamber are partnering to implement several action items from the Next Level Strategy developed with Market Street Services with the opening of THINC SPACEdowntown.

Chris McGowan, the Chamber’s urban development director, said the 8,500 sq. ft. facility will house start-up businesses created by Baylor and area college students and other new ventures requiring flexible space and a collaborative atmosphere for growth.

“With a nationally ranked entrepreneurship program at Baylor and the Chamber aspiring to populate the city’s resurgent downtown with new businesses in the creative sector, the project is a win-win opportunity for our university and colleges and the Chamber,” McGowan said.

“Our vision is to become the creative start-up capital of Texas and this facility will help put us on the map,” he said.

Market Street called for a partnership with Baylor to start-up one permanent student-owned business annually, McGowan said. Another action step in the plan was to create an incubator/co-working space downtown. “We’re accomplishing both with THINC SPACE,” he said.

The Waco Tribune Herald reported on February 16, that the initial businesses at THINC SPACE are coming from the Accelerated Ventures program in the Hankamer Business School at Baylor where students create real companies and sell real products. The Baylor Angel Network provides $5,000 for each company and other donors supply about $150,000 to the program each year.

“We also expect to attract students and graduates of other area colleges to THINC SPACE,” McGowan said, citing the game and interactive media design and culinary arts programs at Texas State Technical College and the visual and performing arts programs at McLennan Community College.

The Chamber will also market THINC SPACE to entrepreneurs not affiliated with the area’s academic institutions.

McGowan said Market Street alerted the Chamber to the NEXT Innovation Center in Greenville, SC as a best practice example of the new generation of business incubators and it became an inspiration for THINC SPACE. “We visited Greenville on an InterCity Visit in 2011 and came back determined to do something similar,” McGowan said.

“THINC SPACE is part incubator, part community gathering place, and part professional support network for creative start-ups,” McGowan said. “It has already created quite a buzz on campus and around town and will be yet another community asset that will help us attract talent that can live anywhere.”

Starting Up Then Heading Out

By Alex Pearlstein, Director of Projects. 

It would not be a stretch to say that nearly every community of size in the U.S. now has some type of program to seed, nurture, and grow start-up enterprises. Whether the program is coordinated by a public entity, an economic development corporation, a higher-educational institution, or some type of public-private hybrid entity, the basic premise is the nearly always the same. Provide an environment (typically a physical space) where innovators with a new business idea can launch their enterprise while taking advantage of low-cost rent and shared utilities/services. Many of today’s incubators take things a step further by serving as “accelerators” with on-site expertise, entrepreneurs-in-residence, and other young companies present to provide advice and counsel on how to build a business to scale and gain market share. Still others provide seed capital and follow-on funding for promising start-ups. 

All this is well and good, but a recent relocation of a Pittsburgh-based start-up to Austin, Texashighlighted the danger of these incubation/acceleration models. Namely that your community not only needs the capacity to launch companies but also keep them in town. This is when the non-tech hub cities and regions really run up against the oftentimes overwhelming competitive advantages of talent- and capital-rich areas like Silicon Valley, Boston, D.C., Seattle, Austin, New York/New Jersey, etc. It’s one thing to get a start-up off the ground and another to navigate the treacherous waters of sustainability. A growing enterprise requires reams of capital and a robust supply of skilled talent to compete in sectors where they’re often facing major multi-national corporations in the battle for market penetration. An example here in Des Moines is the electronic-payments company Dwolla. Dwolla’s founder Ben Milne is trying to grow the company in Des Moines despite long odds and calls from many experts and potential investors to relocate to the “Coasts.” Despite this pressure, he’s gone on record as saying, “If Dwolla fails, it’s not because we’re in Des Moines. It’s because we didn’t execute.” Can Dwolla win out over giants like PayPal, major corporate banks, and other well-funded competitors and build a lasting company here? Time will tell. I hope Milne pulls it off because it will make a definitive statement about the ability of emerging tech regions to counter the currently-gospel attitude that building a major tech company outside “the Valley” is a fruitless exercise. 

While relocation of promising new start-ups is a risk that incubators/accelerators in non-tech-hub communities will always face, it shouldn’t stop them from trying to develop an entrepreneurial ecosystem that can one day reach critical mass. As with so many economic development strategies these days, slow and steady wins the race. Keep identifying and cultivating new sources of start-up capital; keep working to build a labor force with the skills needed to support growing technology companies; keep providing networking and mentoring opportunities for entrepreneurs; keep fostering a quality of life with appeal to tech workers and investors. In other words, keep striving every day to be better than the day before. These days, there really is no other alternative. 

Good things in Georgia

By Christa Tinsley Spaht, Project Manager

We’re constantly digging through best practices and successful programs to see what communities, regions, and states are doing effectively to drive a competitive workforce, business environment, and quality of life. Sometimes I get so caught up in keeping track of what is going on across the nation and world in community and economic development that I miss the exciting things—large and small—happening in my own backyard. While Georgia’s stumbles along in its recovery from the recession, there are some really creative and effective public and private community-level efforts that are pushing communities, businesses, and young workers to be more successful. I’ve highlighted a few of my favorites that I’ve stumbled across in the past few months.

Plugging in At-Risk Talent: 12 For Life, Carroll County

Led by Southwire, one of the largest electrical wire manufacturers in the U.S., this partnership with Carroll County School System focuses on high schoolers at risk for dropping out. This program mixes up the school day with traditional classroom time and then time on the factory floor at a Southwire facility where students work, receive on-the-job training, and are coached on job and life skills. Oh, and the kids get paid too! Read the recent Georgia Public Broadcasting story on the program.  With a goal to see 175 high schoolers through to graduation in its first five years, Southwire has already helped 275 graduates in four years. Since the launch of 12 for Life, the school district’s graduation rate has gone up 10 percentage points and its on-time graduation rate for the poorest students has jumped up 22 percentage points. Southwire has a long history of leading Carroll County's proactive initiatives, including a leading role in the development of Carroll Tomorrow, a result of a Market Street-led process with the community in 2000.

Giving Startups a Head Start: Flashpoint, Georgia Institute for Technology

Flashpoint is an aggressive four-month “process accelerator” for a carefully-selected group of technology startup teams, giving the startups access to mentors, investors, and shared space in Technology Square. After months of coaching and development, the teams pitch their ideas to an auditorium full of investors and other experts. Upon graduation, the chosen startups also may grab investments of between $15,000 and $25,000 from the $1 million Flashpoint Investment Fund, backed by local angel investors.

Flashpoint has focused its previous accelerator cycles on Georgia Tech faculty and students, but plans to expand to accept corporation-sponsored startup ideas for disruptive technologies. Flashpoint, launched in 2010, is the brainchild of Georgia Tech’s strategic plan innovation task force, inspired by Silicon Valley’s Y Combinator accelerator, to address challenges with early-stage capital for local firms. Check out the Atlanta Business Chronicle for an overview of the 16 teams from the most recent cycle that pitched their developed ideas at Flashpoint Demo Day this week.

Family-Friendly Entrepreneurship: Bean Work Play Café, Decatur

Co-working spaces have been cropping up in cities with rapidly-growing groups of independent or remote workers. Co-working spaces are basically communal spaces that are a step up from coffee shops, with many of the amenities of an incubator (conference rooms, printers, work rooms). Bean Work Play Café in Decatur (just outside of Atlanta) is the child-friendly version of this trend. This co-working business is tailored to work-at-home, self-employed, or just-need-to-get-out-of-the-office-today parents, with the typical trappings of a co-working space—meeting and events spaces, office tools, memberships—as well as play-based childcare on demand (incorporating the Reggio Emilia method, which I know nothing about).  

Planning Ahead of Sprawl: The Center for Community Preservation and Planning, Newton County

People think I’m crazy when I say I love I-20, the east-west interstate that cuts through Atlanta, but once you get east of the metro core there are so many beautiful historic downtowns just off the interstate. Case in point: Covington, Oxford, and Social Circle, all about 30 miles east of Atlanta in Newton County. (You’ve probably seen Covington on TV  and didn’t even realize it.)

A far outlying suburb of Atlanta, Newton was a rural setting sprinkled with small towns that saw its way of life about to be seriously impacted by the sprawl of metro Atlanta. In 1999, Brookings Institute’s Christopher Leinberger called 28-county metro Atlanta the “fastest growing human settlement in history” and by 2005 Newton County, on the fringe of the metro, was the eighth-fastest growing county in the U.S.  Proactive and detailed planning was necessary to ensure that as the metro area inevitably crept into Newton County, the resulting growth and development would reflect the long-term vision and deliberate planning of community members and leaders.

Enter the Center Facilitating Community Preservation and Planning, a foundation-funded meeting space for discussion about Newton’s future. The conversations at the Center led to the creation of the county’s Leadership Collaborative, a public-private group that put together a thoughtful comprehensive plan to “allocate density” by preserving what the community holds dear—historic and scenic corridors, rural areas, schools—and advancing other areas where the county can best benefit from Atlanta’s suburban growth—home-grown jobs, mixed-use development for better transportation access.

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!