The New Orleans Saints
In the wake of Hurricane Katrina, a new entrepreneurial culture is taking hold in New Orleans.
By Jason Meyers
If New Orleans needs a symbol of its entrepreneurial uprising, this is it: A grand building in the heart of the Warehouse District, once home to one of the city’s old-line law firms, has been completely taken over by young business renegades.
By April, the lawyers had been swept out of the building at 643 Magazine Street. It was freshly rehabbed, christened the Intellectual Property, and the future started moving in: businesses like TurboSquid, an emerging player in the wild art of 3-D modeling, and iSeatz, the online engine behind major travel and entertainment sites.
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Down the hall, an outfit called Launch Pad is leasing low-cost work space to freelance designers, writers and other would-be entrepreneurs. The Idea Village, a nonprofit group that fosters entrepreneurship and helped create the Intellectual Property building, moved in and started planning community events in the lobby. PlayNOLA, an organizer of sports leagues for young professionals, got its space by winning a local business plan competition. There are even a few new lawyers at Couhig Partners, which specializes in helping corporations with commercial litigation and business management.
The idea behind the I.P., as the building is called, is to provide a hub for an entrepreneurial culture that is bubbling up all over the city, in almost every kind of enterprise. Four years after Hurricane Katrina and the many stumbles toward its recovery, these young businesses represent technology, invention and youthful, entrepreneurial energy–altogether, the potential for rebirth in a region devastated by disaster.
“As someone who cut his teeth in the Bay Area during the dotcom boom, it’s my opinion that we have an opportunity in New Orleans to recreate what we saw there in the late 1990s, or what Austin or Seattle has done,” says Michael Hecht, president and CEO of Greater New Orleans Inc., a nonprofit economic development initiative, and one of the minds behind the I.P. “We’re creating a mecca for entrepreneurs.”
The evidence is growing–from the thousands of new jobs to the tens of millions invested in business development and incentives. Not far from the I.P., in the Central Business District, a building at 220 Camp Street houses an upstart alternative energy provider, a new online exchange for business receivables and a startup music licensing firm. In the Faubourg St. John neighborhood, Trumpet Ventures is incubating startups in a 12,000-square-foot converted warehouse as it continues to expand its own marketing business. A new motion picture studio sprung up in Elmwood and already has a $60 million Sylvester Stallone action flick in production.
All of this is happening in a city that’s still trying to clean up the tangible and psychological damage of Katrina, even as it clears away the long-existing lore of embedded industry and somewhat dubious business practices. In the midst of one of the worst national economies in decades, New Orleans is recreating itself as a hive of entrepreneurial initiative and demonstrating to other cities how to recover from even the worst disaster.
“Everyone’s going through Katrina right now,” says New Orleans fashion designer Seema Sudan of the current economic calamity. “When I go elsewhere, I feel what’s going on in the world. When I’m here, I feel the optimism.”
Seizing the Moment
New Orleans has always welcomed the unique and the creative; just think of the Mardi Gras revelry, the city’s jazzy soul, the vibrant Creole and Cajun cultures. But it was almost never the place entrepreneurs thought of when they were ready to set up shop. Any prior associations between business and New Orleans were more likely related to big industry confabs at the city’s Ernest N. Morial Convention Center and the staggering conventioneers on nearby Bourbon Street. Even longtime residents were challenged by the notion of New Orleans as a startup city: They knew the back-office machinations of government and old-line business practices would make it difficult to transform entrepreneurial thinking into a thriving young business community.
That all started to change in late August of 2005. Hurricane Katrina brought unspeakable tragedy to New Orleans and the other Gulf Coast regions it hit. More than 50 levees and floodwalls gave way, flooding 80 percent of the city. Endless media coverage locked in images of the city’s devastation and the years of blight that followed. But if the storm did nothing else for New Orleans, it began to wash away an outdated, stifling way of doing business.
“The city had kind of a parochial, non-diversified business community,” says Robbie Vitrano, co-founder and CEO of Trumpet Ventures. Vitrano started Trumpet 10 years ago as a branding firm; in post-Katrina New Orleans the outfit cultivates startups focused on digital media and other disciplines new to the region. “Katrina disrupted people’s comfort zones and forced them to confront some of the issues of the past,” he says.
Tim Williamson, co-founder and CEO of The Idea Village, is a Louisiana native and one of many professionals who left early in their careers and eventually found their way back. He and his group have been pushing to attract entrepreneurs to the region for more than 10 years. Until 2005, however, New Orleans remained dominated by the manufacturing, oil and gas industries–and a reputation for being a closed-off business community.
“We were so dependent on the major industries, people didn’t think they needed entrepreneurship,” Williamson says. “What Katrina did was fracture the old networks and help create new ones. What was missing in New Orleans was more people like us.”
By the end of December 2008, The Idea Village alone had counseled more than 245 New Orleans entrepreneurs, representing 935 jobs and more than $67 million in revenue. In March of this year, the group hosted 50 students from MBA programs around the country who were in New Orleans as part of the IDEAcorps Challenge ’09–a sort of live version of The Apprentice, save The Donald and the made-for-TV melodrama.
The Idea Village launched the annual event in 2006 to match MBA students with early stage business ventures in the city. A few years ago, those students might have hit the town for Jazz Fest or to soak up the French Quarter nightlife–but not to rub shoulders with entrepreneurial businesses or explore New Orleans as a place to launch their own initiatives.
But they might now–particularly considering the incentives available to businesses post-Katrina: multimillion-dollar boosts in capital investment; tax incentives that can give back as much as 40 percent of the cost of a project; a critical mass of young businesses taking root here; and an influx of innovative, ambitious workers and housing that costs less than many other metropolitan regions.
The New Orleans metro area added 5,900 jobs between May and November 2008–nearly three times the 2,100 added in the previous six months, according to the most recent figures available from The New Orleans Index, a collaboration of the Brookings Institution Metropolitan Policy Program and the Greater New Orleans Community Data Center. By January, according to the index, the New Orleans metro area reached 73.7 percent of its pre-storm population.
“People are more open to newer things happening,” says Joel Dondis, a leading figure in the New Orleans culinary scene. After serving as sous chef to famed New Orleans restaurateur Emeril Lagasse, Dondis opened La Petite Grocery and two catering outfits, but the latter ventures were nearly wiped out by the storm. Two other government catering jobs saved him, he says, allowing him to pump money back into his businesses and even launch two new ones: the Warehouse District eatery Grand Isle, and the upscale sweet shop Sucré, which is nestled in a row of chic Garden District boutiques on Magazine Street.
Across town, in Elmwood, a former Winn-Dixie warehouse complex on 25 acres of land was recently recast as a full-feature-film studio–and quickly, to accommodate the needs of Sylvester Stallone and his multimillion dollar production of The Expendables, an action-adventure written, directed and starring Stallone and featuring Arnold Schwarzenegger, Mickey Rourke and Jason Statham. In April, crews were carving props out of Styrofoam and scrambling to assemble the fuselage of a military aircraft inside some of the studio’s 525,000 square feet of warehouse space that will eventually be converted to soundstage.
“We came at this thing in a rush; this $60 million production was looking for a place to live,” says Wayne Read, CEO of Louisiana Film Studios. “We knew we had to either step up and support this critical industry or it was going to go elsewhere.”
Collaborative Spirit
Greater New Orleans Inc. is the support behind a number of efforts to help spur business development and draw investments–including the I.P., which Michael Hecht hopes will be a beacon for entrepreneurs. Hecht, the head of Greater New Orleans, is a former San Francisco restaurateur who moved to New Orleans in early 2006 from New York City, where he was the assistant commissioner of small-business services. “We’re putting the same types of companies together to create critical mass and support,” Hecht says. “We’re creating a symbolic and physical heart of the city.”
And they’re creating a looser, Silicon Valley-type of vibe. The I.P. building has a gym, a café, a business concierge desk run by The Idea Village and loads of collaborative space, like a “Brainstorm Room” filled with whiteboards. A bar is slated to move in soon and, of course, the building is dog friendly.
Chris Schultz has leased 3,000 square feet to house Launch Pad, which sublets office space, and offers facilities and support for graphic designers, freelancers and startups. Schultz, whose business, Voodoo Ventures, helps develop internet companies in New Orleans, hopes that the physical proximity Launch Pad provides will spark further innovation.
“These companies need community building, mentorship and collaboration,” Schultz says. “Having all those people working together in an open space offers an extremely stimulating environment.”
Schultz, a Los Angeles native, came to New Orleans out of love–literally. “I met a girl at Jazz Fest,” he says. But he’s one of a growing number of entrepreneurs–locals, former locals and new transplants–who stay because of New Orleans’ mix of economic, human and cultural appeal.
Cecile Hardy, a New Orleans native, was working as a buyer for Williams-Sonoma in San Francisco when Katrina hit. She returned to help and ended up founding NOLA Couture a year later, a New Orleans-inspired clothing line that now has distribution deals with 75 stores across multiple states. “It was a really strange feeling–like I was meant to be here,” Hardy says.
Sudan, who has also worked for Calvin Klein and Anthropologie, knows that feeling. She moved to New Orleans from Philadelphia in October 2007 and founded her knitwear company, LiaMolly. Her husband and business partner is from Louisiana.
“When Katrina hit, we had an immediate pull to be part of the rebirth,” Sudan says. “Then I started to discover what New Orleans actually had, and I was blown away.” LiaMolly’s charmingly detailed sweaters are now sold in Bloomingdale’s, Anthropologie and about 100 boutiques. “We wanted to be part of New Orleans because it’s an inspirational place,” she says. “I can’t imagine getting the kind of attention and advice we’re able to get here in a place like New York.”
Free Flow Power of Gloucester, Massachusetts, was also attracted by what the city had to offer. The company develops turbine generators that produce energy from moving water without dams or diversions–a process called hydrokinetic generation. It’s planning a major Mississippi River project and put its management offices in New Orleans in 2009 because of access to the marine construction talent in the region and support of the community.
“The red carpet that was rolled out in New Orleans played a major role in us locating our project management operations here,” says Jon Guidroz, director of project development for Free Flow Power. “It’s more than a gesture; it’s a genuine expression of support.”
The founders of The Receivables Exchange, an electronic marketplace for the buying and selling of commercial receivables, decided New Orleans had the identity their company needed to thrive. “We’re an exchange. New York has an exchange; Chicago has one,” says Nicolas Perkin, the company’s co-founder and president, who has helped launch companies in New York City, Prague and other cities. “We were looking for a city to associate the business with. New Orleans made the most sense because it has a globally recognized name historically associated with trade.”
A New Foundation
So was the city’s entrepreneurial underpinning always there, even before the storm? Hecht’s take is that New Orleans has always been a cosmopolitan place that’s tolerant of diversity, which is good for fostering business innovation–but that, historically, seniority and lineage were viewed as more important than raw talent. “New Orleans can’t rest on its heritage anymore,” Hecht says.
“It’s a 180-degree change from what it was like before the storm,” says Brent McCrossen, co-founder and CEO of Audiosocket, a Seattle music licensing firm that opened a New Orleans office in September 2008 to better tap into what McCrossen says is a $600 million film market. “It’s more collaborative, and things are a lot more streamlined.”
The issue the New Orleans business community faces now is how to sustain the momentum. Even the most optimistic understand that the post-Katrina levels of attention and investment can’t be permanent.
“We have about five to seven years of a recovery economy,” Hecht says. “In a typical year, our region will see about $1.5 billion in infrastructure investment. For the next three, we’ll see $10.5 billion. That means we’ll be riding a wave of investment that’s not reality.”
Says Guidroz of Free Flow Power, “The help isn’t going to be around for too long–we need to build our own foundation.”
VIDEO: The Big Easy Gets Entrepreneurial After the near-death experience of Hurricane Katrina, New Orleans is bouncing back with a thriving economic ecosystem. |
That foundation may already be taking shape, particularly in the collaborative nature of the new business community. “People in fashion and entertainment and hospitality are all working together,” Guidroz says. “When you meet people, it’s not ‘What do you do?’ It’s ‘How can I help?’”
The entrepreneurs’ unofficial headquarters is Loa, the candlelit bar at the International House hotel. Sean Cummings owns the hotel, which is right across the street from his 220 Camp Street development-home to The Receivables Exchange and Audiosocket.
Loa has an open, welcoming vibe. Local business types frequently gather on the plush purple lounges to relax, swap war stories, maybe meet the owner of a new business a mutual friend has convinced to relocate to the area.
It’s hard not to notice that the entrepreneurs who rejected the closed-off, clubby nature of New Orleans’ old business culture–who, in fact, thrived in part because of its demise–have somewhat unwittingly created a new club of their own.
The Incentives
After Katrina, a number of tax breaks were established to spur development.
Quality Jobs Program 6 percent wage rebate on payroll
Motion Picture Industry Development Tax Credit 25 percent for motion picture production; 10 percent for Louisiana labor; 40 percent for infrastructure development
Music/Sound Recording Tax Credit 25 percent for sound recording and infrastructure development
Digital Media Tax Credit 20 percent for interactive digital media companies such as video-game developers
Louisiana R&D Tax Credit Program 8 percent to 25 percent on wages, supplies, computer expenses and contract research expenses
Louisiana Technology Commercialization Credit and Jobs Program 40 percent of investments up to $250,000 in commercialization costs; 6 percent on new jobs created
Angel Investor Tax Credit Program Investors receive state income tax credits of up to 50 percent of their investment in a
certified business
(All figures: GNO Inc.)
A place of their own – August 1, 2009
A place of their own
By Penny Font
Saturday, August 1, 2009
It all began nearly a decade ago on a cocktail napkin.
The dream was to create a village where entrepreneurs could work, play and collaborate together.
Now step inside that dream at 643 Magazine St. in New Orleans.
The former headquarters to the prestigious buttoned-up McGlinchey Stafford law firm has been transformed into the ultra-hip IP [Intellectual Property] Building, where dogs are welcome during the work day and the bar soon will be serving cocktails. It’s home to six of the city’s most successful entrepreneurial and tech-driven businesses, with room for more.
Photo by Cheryl Gerber
A NEW LOOK: The IP Building at 643 Magazine St. is designed to be a physical manifestation of the growing entrepreneurial community in New Orleans.
“From the very beginning, there’s always been this vision of clustering this activity—that you could actually create a village, an idea village; a village of entrepreneurs,” says Tim Williamson, president of Idea Village, which was founded in 2000 to nurture the entrepreneurial community in New Orleans. “The concept being, what if there was this actual physical manifestation of the entrepreneurial community?”
The vestiges of traditional corporate digs have disappeared from this place of their own. There’s a building concierge, whose duties include planning tenant get-togethers—including a Naked Pizza Friday—and who herself is contemplating a start-up business selling candy there. The lobby bears a neon-colored
mural of Idea Village. Couches and flat-screens are plentiful. The shared Brainstorm Room is painted completely in white board for jotting down suggestions for the Next Big Thing as they free flow from the minds of those who work here. A fitness spa sits atop the top floor. And the walls of Carrollton Technology Partners pay homage to retro gaming with gigantic images of Donkey Kong.
This ain’t your daddy’s office.
Idea Village and GNO Inc. worked together to bring the IP Building to life. New Orleans born-and-raised developer Brian Gibbs bought the building from McGlinchey Stafford last July, with plans to convert it into apartment housing.
But he changed his mind after Williamson and GNO Inc. President & CEO Michael Hecht came to him with the idea for creating a collaborative office space—not as an incubator, but a home for well-established entrepreneurial firms. Gibbs went to work, and the first tenants set up shop in April.
“There is a nascent creative professional movement in the Greater New Orleans region, and the IP Building is going to be its physical and symbolic center,” Hecht says. “With these top tier firms, the IP creates critical mass, and will both help these companies thrive, and attract new ventures to our region. The IP clearly demonstrates the viability and vibrancy of the creative and digital media industry in our region.”
Tenants include iSeatz, an Inc. 500 online booking firm; TurboSquid, a 3D digital image retailer; Carrollton Technology Partners, a tech development firm; LaunchPad, which helps start-ups get off the ground; and Couhig Partners, a law firm specializing in intellectual property work. Idea Village and playNOLA, which helps young professionals network through sports and recreation, also call it home. CapDeVille, a wine bar/café, is on the way.
Combined, they bring more than 110 employees and $61 million in revenues.
“We wanted to be in a different, more interesting space,” says TurboSquid CEO Matthew Wisdom. “This building creates a real sense of community. It’s a fascinating space.”
Inside iSeatz, which is on the ground floor of the IP Building, workers can gaze at passers-by through the massive windows, have a meeting on barstools at the break area in the middle of the office, or lounge on couches in front of the big screen. CEO Kenneth Purcell is also the one who pushed for the IP to be dog-friendly.
Michael Bauer, senior vice president for distribution and supply for iSeatz, says the move was a smart one for the firm, which previously made its home at Canal Place.
For one thing, it’s an impressive recruiting tool.
“Especially when you’re recruiting from outside the city, everybody has a different idea of what New Orleans is,” Bauer says. “We were at Canal Place in a high rise. This creates a different energy. The people we’re bringing in are young and creative. This building has a unique blend of that, which is what we believe makes a successful organization.”
Adds Chief Information Officer Allen Darnell: “Being in a building with like-minded people, we’re pulling that energy from everybody else.”
The building emerges at a time when such youth and innovation seems to be driving the resurrection of this historic city. For the first time, New Orleans has a majority of voters—138,582 of them—under the age of 45. The largest block—78,000—consists of those ages 21-34.
“If you’re a young, bright entrepreneur, New Orleans looks pretty interesting right now,” Williamson says. “There aren’t hundreds of thousands of layoffs; there’s actually a growing, entrepreneurial community. We’ve got our coolness, but there’s also a sense of opportunity here, where because we’re going through a transformation. It’s become a laboratory, really, of innovation and entrepreneurship, and that’s really attracting some folks who might not have considered New Orleans. They’re looking at this being on the ground floor or beginning of a city that’s on a positive wave.”
There’s also awareness along the corridor of the importance of entrepreneurship and innovation as a key component of economic development that didn’t exist ten years ago, when the idea for such a building was hatched.
The IP Building’s founders now are hoping this site will become a beacon for that young, creative talent.
And the concept won’t be limited to New Orleans. Williamson and Hecht have already discussed similar plans for the Northshore, the River Parishes and Baton Rouge. There are also thoughts of bringing top MBA students from across the country to the IP Building to work as a collaborative pool of interns for the firms housed there.
Says Williamson: “A building doesn’t create a community like this. But it can galvanize it.”
Entrepreneurs Leverage New Orleans’s Charm to Lure Small Businesses
July 30, 2009
By ABBY ELLIN
IT has been a long time since the word “optimism” was spoken in the same sentence as “New Orleans.”
But a small group of entrepreneurs has been using that word lately to describe their efforts to attract small businesses to New Orleans. For now, their enthusiasm may be greater than their results. But they say the city’s low rents and business tax incentives along with its music and culture have proved to be powerful lures, despite the still-halting efforts to get past the devastation of Hurricane Katrina in 2005.
“We’re seeing the exact same thing here that we saw in the Bay Area in the mid ’90s,” said Michael Hecht, 38, president of Greater New Orleans Inc., a nonprofit economic development agency. He moved to New Orleans in early 2006 after time in both San Francisco and New York. “There’s a sense of opportunity and possibility, combined with people who have the horsepower to actualize those possibilities.”
Since Hurricane Katrina, at least four formal entrepreneurial hubs have been established in New Orleans: Entrepreneur’s Row, the Icehouse, the I.P., (an acronym for Intellectual Property) and the Entergy Innovation Center. While they all hope to help nurture individual businesses, they are not technically incubators. Instead, they house start-ups and established companies while focusing on “clustering like-minded entrepreneurs to build their businesses together,” said Tim Williamson, 44, the co-founder and chief executive of the Idea Village, a nonprofit group founded in 2000 that helped created the I.P.
So far, they seem to be doing something right. According to the Louisiana Workforce Commission, the New Orleans metropolitan area reported an increase of nearly 100,000 nonfarm jobs from October 2005 — soon after Katrina — to June 2009. By 2016, the commission expects New Orleans area employment to grow 24 percent from 2006 levels, or to 98.8 percent of pre-Katrina levels.
“There has never been a better time in Louisiana for the creative class to thrive,” said Mitchell J. Landrieu, the state’s lieutenant governor.
Jon Guidroz, 27, is one of the entrepreneurs who was persuaded to move to the city. He grew up in New Orleans but was living in Massachusetts and working for Free Flow Power, a renewable energy company, after Katrina hit. “I wanted to return to help,” he said. But he said he did not see a strong business reason to move.
Then, last year, Sean Cummings, a real estate developer and entrepreneur in New Orleans, randomly found Free Flow’s Web site and noticed that the company had a Mississippi River project in the works. Mr. Cummings, 44, a co-founder of a group called Startup New Orleans, invited Mr. Guidroz to visit his offices in New Orleans at 220 Camp Street, a loft building called Entrepreneur’s Row. As an extra incentive, Mr. Cummings even offered to give him six months free rent.
“He helped me fulfill my dream of bringing this business to New Orleans,” said Mr. Guidroz, who moved back in January. “Until these guys rolled out the red carpet for me — immediate access to a substantial network in the city and state for getting things done, finding local investors — I don’t think we would have done it.”
Entrepreneur’s Row was conceived in May 2007, when Mr. Cummings received a phone call from Nicolas Perkin, the co-founder and president of the Receivables Exchange, an electronic marketplace for the buying and selling of commercial receivables. Mr. Perkin had recently gotten married, and he and his bride wanted to relocate to New Orleans from New York. What did Mr. Cummings think?
Mr. Cummings thought it was a great idea, and the two men set about figuring out how to attract other entrepreneurs to the city. “To really prosper, New Orleans must focus on the few opportunities where we have a compelling competitive advantage,” Mr. Cummings said. “We must likewise recruit entrepreneurs who are drawn to a joyful quality of life. It’s a home-run success story. Entrepreneurs are reinventing New Orleans, like Prague after the curtain, like Milan, like a smaller Seattle.”
Along with three other business executives, Mr. Cummings and Mr. Perkin came up with Startup New Orleans, a Web-based information service to connect entrepreneurs with the resources they need to set up a new business. In March 2008, Mr. Cummings established Entrepreneur’s Row. Today, it is home to nine companies, including the Receivables Exchange; Mr. Guidroz’s company Free Flow Power; and Audiosocket, a music licensor. (Mr. Cummings has a financial stake in at least six of the companies.)
The Icehouse — a 12,000-square-foot, renovated warehouse in the Seventh Ward, which was severely damaged by Katrina — opened in April 2008 and now houses seven businesses. They each pay $600 a desk each month, which covers a phone with private number, high-speed Internet, a kitchen and a rooftop deck access.
“One of the things we wanted to do post-Katrina was to make sure that our footprint had maximum impact,” said Robbie Vitrano, president of Trumpet, a branding and business development firm that is managing the building. “We wanted to be in a neighborhood that was redeveloping.” Mr. Vitrano, 45, is also a co-founder of Startup New Orleans.
Earlier this year, the Idea Village and Greater New Orleans Inc. refurbished an 85,000-square-foot building at 643 Magazine Street in the warehouse district and called it the I.P. (Intellectual Property). It has nine tenants, including TurboSquid, a 3-D modeling company; TJ Ebbert and Associates, a disaster management consulting firm; and Carrollton Technology Partners, a technology development company. The building has a cafe, a gym with his and her saunas, business concierge desk and multiple “brainstorm rooms.”
Part of the appeal is that New Orleans is, perhaps, the ultimate college campus for adults. After work, many of the young businesspeople gather for drinks at International House, the boutique hotel in the central business district that Mr. Cummings opened 10 years ago across the street from his loft building.
Mr. Cummings and Mr. Perkin also hold monthly meetings at the hotel in which business owners can share war stories and vent.
“The thing about this city, like no other — everybody wants everyone to succeed,” said Seema Sudan, the owner and director of design at the knitwear company LiaMolly, who moved to New Orleans in October 2007. “I have never been in a place that is so community-oriented,” she said. “Competitive gets you nowhere. It’s about being collaborative. And this city is so like that, from the people helping each other rebuild their homes to building businesses.”
She said she also appreciated the quality of life, and the fact that she paid $800 for a 900-square-foot studio in the Garden District, and $1,800 for a three-bedroom apartment with a yard and tree house.
Two years into his project, Mr. Cummings remains enthusiastic.
“I am blown away by the caliber of talent,” he said. “It’s a thriving creative culture of invention. And it is growing every day.”
Laid-off Wall Streeters find entrepreneurial spirit
A small-business incubator in New York steps up to rival collaborations in Boston and Silicon Valley.
By Ron Scherer | Staff writer
July 23, 2009 edition
With thousands of Wall Street go-getters out of work, New York has a plan: Make it easier for them to channel their inner entrepreneur.
The city is opening up a small-business incubator just a few subway stops from the financial district. This is where anyone who has a fledgling plan for a small business can apply to set up shop and get off the ground.
What makes the incubator attractive is its low rent – far lower than the cost of most office space in New York City. Also, with multiple endeavors under one roof, the workers can compare notes and feed off one another’s energy.
A few perks come with the space, too. The Bill Gates-wannabes will have Bloomberg machines, which provide extensive business data. And the entrepreneurs can get an assist from interns – students from a university.
The city wants the incubator to scale up and up, with the ultimate goal of challenging America’s leading entrepreneurial and incubator centers.
“Given the scale of New York and [its] economy, we are hitting below our weight compared to other centers like Boston and Silicon Valley,” says Seth Pinsky, president of the city’s Economic Development Corp., which is spearheading the effort. “We want to start to carry the weight that is appropriate given the size of the city and our economy.”
To get there, the city is spending $15 million over five years. It will also draw on some $30 million in unused 9/11 federal money. Moreover, the city hopes to add some private capital, including $10 million in Angel Funds – money from affluent individuals who want an early equity interest in a promising new business.
“We estimate when this is all said and done, these [efforts] will create 25,000 jobs over 10 years,” Mr. Pinsky says.
The city’s unemployment rate in May, according to the New York State Department of Labor, was 9 percent – below the national average of 9.4 percent that month. New York City is somewhat better off, Pinsky says, because of its diverse economy and the growth of small companies in financial services. Some of that growth has apparently happened as people who lost jobs at large banks start their own businesses.
Interest in entrepreneurship emerged when some displaced Wall Streeters ended up at outplacement organizations such as Right Management in New York, says Leslie Hild, vice president for career management services. “We have sessions to ‘kick the tires’ to see if the idea is interesting, and [participants have] the opportunity to speak to experts in entrepreneurship,” she says.
Yet people who end up at outplacement firms tend to have higher incomes. New York’s effort to energize entrepreneurial instincts, meanwhile, is geared to those making $20,000 to $70,000 a year. These are people on Wall Street who helped firms process trades or worked as administrative assistants.
Of course, New York isn’t the only place trying to nurture entrepreneurs. According to the National Business Incubation Association (NBIA), there are close to 1,000 incubators in the United States. Some are attached to universities, some are part of a city’s economic development plans, and some are geared to make money.
“The networks and experience are staggering compared to 10 or 20 years ago,” says Dinah Adkins, president and CEO of NBIA. “Every year, we are getting ever-more-sophisticated entrepreneurs.”
Clustering entrepreneurs is quite useful, says Tim Williamson, president of the Idea Village, a New Orleans business incubator. “It allows people to interact closely, bump into each other at the water cooler, [and it] forces conversation,” he says.
The Idea Village is an example of how the clusters can grow. The organization has expanded its space from 3,000 square feet to 4,200 square feet. Included in the new digs: an intellectual-property law firm that hopes to assist the budding entrepreneurs and an “entrepreneurial concierge” whose job is to help build the sense of community.
For an incubator to be successful, it needs to bring in experienceed people to give advice and serve on a board of directors, Ms. Adkins says.
In New York, the person responsible for putting the incubator together is Bruce Niswander, a professor of technology entrepreneurship at Polytechnic Institute of New York University and director of the school’s Entrepreneurship Initiatives. He has already set up 20 entrepreneurs in the space. Among them: some energy economists, a company developing wireless interfaces for trading of securities, and an online group for foodies and restaurants.
“Some are just [brand-new] start-ups. The rest are two years old or less,” he says.
At the incubator, the companies sublease office space from NYU Poly at well below market rates. The companies can hire students from NYU Poly to work as interns – who will be on the payroll of the incubator, not the start-up. “It’s one of the bigger benefits,” Professor Niswander says. “The students get to work with real companies, and the companies get bright students.”
One new tenant is People Data Solutions, which calls itself a “talent exchange” for people laid off from Wall Street. The concept, explains Robert Davidson, the CEO, is for companies to “sponsor” employees they have let go. Such sponsorships, along with other information about the workers, are entered into a database at the start-up. These workers can then opt to have their validated corporate data reviewed by prospective employers.
The incubator has enabled him to move his business from his home, which comes equipped with a 3-year-old. He’s looking forward to being part of a community of entrepreneurs who are all trying to make their business plans work.
And he likes the potential for reasonable rent. “As a start-up, when we are not raising money,” he says, “we’re going into debt trying to figure how to do it.”
Entrepreneurial hubs are springing up across the city and spurring economic development
by Allison Good, The Times-Picayune
Sunday, 10:25 AM
The old adage about strength in numbers is ringing true for some start-up companies in New Orleans.
Entrepreneurial ventures in New Orleans are increasingly clustering together under the same roof in a bid to share ideas, support each other and spur economic development. Since Hurricane Katrina, three entrepreneurial hubs have been established in the city. A fourth is scheduled to open later this month. And GNO Inc., a local economic development group, is close to finalizing details for a similar hub on the north shore.
The hubs operate under edgy names — Entrepreneur’s Row, The Icehouse, the I.P. and the Entergy Innovation Center — and place an emphasis on providing more than office space to their tenants. They are not business incubators designed to nurture fledgling businesses; most house well-established firms. Instead, the hubs encourage networking and collaboration among innovation companies while seeking to recreate a freewheeling culture reminiscent of Silicon Valley.
“For the companies entering the building, it’s an exciting environment for them to be in and sometimes they find mutual business interests they share, so spontaneous partnerships arise and joint ventures start to form,” said John Elstrott, an entrepreneurship professor at Tulane University’s A.B. Freeman School of Business and executive director of the Levy-Rosenblum Institute for Entrepreneurship. “It creates an exciting collegial atmosphere.”
But it is not just about business. Tim Williamson, president and co-founder of Idea Village, said his group has intentionally established entrepreneurial hubs where they can have the greatest impact on neighborhood revitalization.
“Post-Katrina, we sought to accelerate progress by creating clusters to revitalize these neighborhoods,” Williamson said.
Miji Park, an urban planning expert with the Idea Village, agreed.
“Our goal is to listen to the neighborhood to find out what needs are there,” Park said. The group is considering establishing entrepreneurial hubs in Gentilly and New Orleans East, areas she believes are “in need of serious economic redevelopment tools.”
“Clusters are a validation that entrepreneurs can create economic and social change,” Williamson said.
Supporting each other
Sean Cummings developed one of the city’s first entrepreneurial hubs — now known as Entrepreneur’s Row — in July 2007 when the Receivables Exchange moved into his building at 220 Camp St. Since then, seven other startup firms have moved into the building with the Receivables Exchange, which runs an online marketplace for the buying and selling of receivables such as leases and invoices.
“We moved in at the beginning of this year,” said Jon Guidroz, director of project development for Free Flow Power, a renewable energy technology firm. Guidroz said his company has already benefited from the clustering of start-up ventures at Entrepreneur’s Row.
“As an entrepreneur, you tend to become insular in your thinking and get consumed by what you’re trying to accomplish, and whether it’s heading to the water cooler or getting a drink after work, the interaction helps you with the bigger picture mindset and seeing things from different perspectives,” he said.
The Icehouse is another entrepreneurial hub that evolved after Trumpet Advertising nursed along a series of start-up companies.
“We were a growing branding firm that had become an Ellis Island for startups, so after Katrina we secured a location where we could effectively apply resources for these baby companies and create jobs and service the community,” Trumpet Advertising President Robbie Vitrano said.
Vitrano selected the Icehouse’s location strategically.
“The idea was to find a place that needed the catalytic impact, so this seemed an ideal location,” said Vitrano, who settled on the 7th Ward because it is at the center of three of the 17 recovery zones identified by the city of New Orleans.
The Icehouse, which opened in April 2008, now houses five businesses.
Earlier this year, the Idea Village and local economic development group GNO Inc. converted the former McGlinchey Stafford building on Magazine Street into the I.P., which now houses six tenants, including TurboSquid, iSeatz and Couhig Partners, a law firm that specializes in intellectual property. The Idea Village itself relocated to the I.P. in April. The building allows dogs and has a gym with a sauna and showers.
New center
On Wednesday, the Idea Village’s Entergy Innovation Center will open as the city’s fourth entrepreneurial hub. The center, which had its groundbreaking in August 2006, will house a community technology center, conference space and flexible office space for entrepreneurs and nonprofits. It will be on North Galvez Street in the Upper 9th Ward.
“We liked the Upper 9th Ward, because we knew Habitat (for Humanity) was making an investment in the Musician’s Village and that there would be a critical mass there for a pilot program,” said Allen Bell, a co-founder and chief operating officer for the Idea Village.
The Idea Village’s Park said Entergy Corp., which donated $200,000 to the project and became its biggest contributor, also liked the location.
“They believe in economic redevelopment and revitalization, and the goal here is to inspire entrepreneurship in the Upper 9th Ward,” Park said.
The center has two retail tenants on its first floor: Darryl Porter’s Lollipop Boutique, a children’s shoe store and Connie Jacobs’ Unlimited Communications, a telecommunications and bill-pay store.
Jacobs, whose four retail locations were destroyed during Katrina, said she thinks her services will be a welcome addition to the neighborhood.
“This place is perfect for me, because I’ve always worked in low- to moderate-income areas,” she said. “Since the storm, most homeowners are back but lots didn’t have banks or checking accounts, but they still had to pay their gas, light and utility bills, which is where I come in.”
Sen. Mary Landrieu, D-La., said she is optimistic that the center will be a catalyst for economic and social change.
“This entrepreneurial clustering, it’s all about how you rebuild a neighborhood,” Landrieu said at a roundtable discussion with local entrepreneurs last month. “We’re putting the UD (urban development) back in HUD (Housing and Urban Development).”
New Orleans Ideas And Technology Now Has New Home
Written by: BayouBuzz Staff
April 17,2009
New Orleans has never been known for technology but after last night’s opening of a building called IP, it now has a place it can call home and build upon.
IP opened Thursday night to a packed crowd of enthusiastic technologists and entrepreneurs who are looking for some of the same spirit and synergies that have made other locations throughout the globe take off into the high-tech world.
The building is located at 643 Magazine Street on the corner of Magazine and Girod. The building is not just bricks and mortar, but is a symbol.
“The opening of the IP Building is both practically and symbolically significant, said Michael Hecht, the President and CEO of Greater New Orleans Inc.. Practically, it creates a physical community for innovative companies, which will benefit from each others’ energy and intellect. Also, the IP will provide a compelling example of the “new’ New Orleans region for companies considering us as a location, as well as the media. Symbolically, the IP marks the birth of an economy based on intellectual capital where, given our culture, cost of living and business incentives, we have a world-beating competitive advantage, said Hecht.”
The President and CEO of the Downtown Development District of New Orleans expressed similar thoughts and emotions ”The opening of the IP in Downtown is the latest, and one of the most concrete, reminders of the transformation underway in New Orleans. Industries of the Mind, creative media, entrepreneurship – whatever you want to call it – it’s starting to take hold in New Orleans. It’s palpable, and it’s gaining momentum fast.
“New Orleans has seen a remarkable influx of talented individuals and firms in the last few years, with the largest concentration being Downtown. Whether it be arts-based, bio-medical, digital media, or other tech firms, these new industries are our future. The DDD is pleased to partner with developers like Brian Gibbs, Idea Village, GNO, Inc., the City, State and others to transform this region into one of the world’s most attractive destinations for Industries of the Mind, said Brian Gibbs.”
“We are creating a physical manifestation of the entrepreneurial community that is taking root in New Orleans,” describes Tim Williamson, co-founder and CEO of The Idea Village. “New Orleans has become a vibrant center of innovation and the I.P. will become the magnet for the entrepreneurial talent that is transforming our community,”
For leasing information, contact Bobby Talbot, of Talbot Realty Group at btalbot@talbot-realty.com.
You can’t spell ‘hip’ without I-P – April 17, 2009
You can’t spell ‘hip’ without I-P
Friday, April 17, 2009
Commentary by Greg LaRose Managing Editor
It wasn’t your typical chamber of commerce event. Actually, it was just a straight up party Thursday night when the founding tenants of the IP unveiled their new digs.
The five-story Intellectual Property building at 643 Magazine St., home to the McGlinchey Stafford law firm for 25 years, will now house six companies — a roster flavored heavily with entrepreneurial and tech-driven businesses. They include the Carrollton Technology Partners, Couhig Partners law firm, iSeatz.com, Launch Pad, TurboSquid and The Idea Village, which collaborated with the economic development entity Greater New Orleans Inc. to create a shared space for creative, upstart businesses.
Developer Brian Gibbs bought the 85,000-square-foot building from McGlinchey Stafford and gave it a cutting-edge feel with his makeover. At iSeatz.com, an online travel reservation service, the common area looks more like a swanky spa or lounge than an office.
That’s a good fit for Kenneth Purcell, iSeatz.com CEO, who is relocating from his former office space at Canal Place.More of a flip-flops guy than a coat-and-tie type, Purcell and his fellow IP tenants are decidedly laid back.
TurboSquid’s cast of creative digital media professionals should also feel much more at home in their new environs rather than the conservative Texaco Center. The IP has even been declared a dog-friendly environment.
Will Donaldson typifies the spirit behind the IP. The Tulane MBA student is one of the partners in The Launch Pad, which will provide workspace and meeting facilities at the IP for fledgling entrepreneurs who aren’t ready to commit to a long-term office lease.
And if one of these new businesses or an Idea Village-backed venture need legal guidance, Rob Couhig’s firm is positioned ideally to provide counsel. Carrollton Partners is capable of handling their Web needs.
GNO Inc. chief executive Michael Hecht envisions similar collaborations under one roof throughout the 10-parish metro area. But given the collection of creative and entrepreneurial types calling New Orleans home these days, there are probably enough prospective tenants in the city to fill IP 2 through 10.
We’ll see if Gibbs in game.
Former McGlinchey Stafford building becomes hub for entrepreneurial companies
Kate Moran, The Times-Picayune
April 13, 2009
A collection of technology and startup companies started moving last month into the former McGlinchey Stafford building on Magazine Street, launching what they hope will become a hub for recruiting and retaining young, entrepreneurial talent in New Orleans.
The project is the brainchild of the Idea Village and GNO, Inc., nonprofit business groups that have tried to create an atmosphere that evokes the creative, freewheeling culture of Silicon Valley in the heart of this city’s buttoned-up central business district.
The building is not an incubator designed to foster fledgling businesses, but rather a home for established companies whose founders share similar values and believe they will derive a social and intellectual benefit from clustering at a single address.
Six anchor tenants have either leased or agreed to lease space inside the building, including Carrollton Technology Partners, TurboSquid, Launch Pad and iSeatz.com, the city’s only Inc. Magazine 500 company. The Idea Village itself plans to relocate to the building, as does Couhig Partners, a law firm that specializes in intellectual property.
Kenneth Purcell, chief executive of iSeatz, said the company’s former offices on Canal Street were a handicap in recruiting employees from technology centers like Dallas and Chicago who were used to more modern, collaborative work spaces. The McGlinchey building, now called The I.P., allows dogs and has a gym with a sauna and showers.
Purcell hopes the building, whose name is shorthand for intellectual property, will foster the same sort of energy and entrepreneurial spirit that flourished inside the building in New York City where his company temporarily relocated after Hurricane Katrina. Startups-turned-mainstays such as priceline.com and the online magazine salon.com congregated at that address, called Tech Space.
“This building will enable us to bring a different sort of white collar worker to New Orleans,” Purcell said.
The building’s appeal does not end with its ability to draw creative workers. Tim Williamson, president of the Idea Village, said he expects it to help retain the young and upwardly mobile set that will form friendships and business connections inside the building. His group plans to organize programs inside the lobby to bring together the various tenants.
“There will be a lot of interaction by virtue of being in the same building,” said Chris Schultz, whose is starting a company called Launch Pad that will provide low-cost office space to freelance writers, designers and others launching a new business who cannot afford to sign a long-term lease.
Williamson said the Idea Village has been turning over the idea of a hub for entrepreneurs for almost 10 years. Michael Hecht, the new chief executive of GNO, Inc., begun mulling a similar idea, and the two managed to recruit a number of companies whose leases happened to be running out this year. The six anchor tenants they assembled have scooped up almost a third of the 85,000 square feet inside the building, located at 643 Magazine St.
“There might not be a Fortune 500 moving to New Orleans, but we together create a virtual billion-dollar effort inside this building,” Purcell said.
Developer Brian Gibbs purchased the building from the law firm McGlinchey Stafford last July. He intended to convert it into apartment housing, but he said he was intrigued by the opportunity to help attract and retain boutique businesses in the city. The viability of his apartment buildings, including the high-rise he is erecting at 930 Poydras, hinges in many ways on the affluence of the city’s workforce.
“Our resident base, to some extent, depends on a healthy office market,” he wrote in an e-mail. “.¥.¥.I see the I.P. as my opportunity to be proactively involved with economic development by driving the demand side of the equation.”
Austin Marks, chief of staff at GNO, Inc., said his group hoped to launch similar buildings on the north shore and in the river parishes. He and Williamson said they are trying to build a community of entrepreneurs across the region, an effort that does not stop once the McGlinchey building is filled.