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In the South, Startup Lessons

The Pros and Cons of Creating Startups in the South

- Emma Tamplin -

This year’s 36/86 conference featured several panels that addressed the benefits of being a tech entrepreneur in the Southeast. One such panel, How to Use Geography as a Growth Asset, invited three founders—Ken McElrath (Skuid), Todd Olsen (Pendo) and Cynthia B. Kaye (Alive Studios)—to share their own startup experiences in Chattanooga, Raleigh and Atlanta, respectively. The panelists talked relocation, growth and talent acquisition compared to the typical Silicon Valley startup experience. Here is a list of the pros and cons associated with building a startup in the South, according to the panelists’ wisdom.

Pros:

Friendly, family-oriented communities are more abundant.

Each panelist had his or her reasons for moving their startups to the South, but Olson, founder and CEO of Pendo, moved to Raleigh from San Francisco for the family-oriented community. Even Kaye, founder and CEO of Alive Studios, has found her hometown of Atlanta to have a friendly startup community.

Your money goes further.

The panelists agreed that—aside from these communities having more benefits for family life—the region allows their money to go much further. After a stint in Silicon Valley, McElrath moved to and then relocated from Phoenix because he saw potential in the town of Chattanooga; not only was it closer to his family, the cost of doing business was significantly lower than moving back to the Bay Area. Skuid was able to bootstrap its first two years before seeking investors.“Bootstrapped growth like ours just couldn’t have happened in the Bay Area and it wouldn’t have meant as much as it does to this city,” he explains.

Innovative talent will find you more attractive.

Skuid started as a team of 5 members who willingly followed McElrath to Chattanooga. Now, the company has over 160 employees. Attracting tech talent can be a challenging task, but McElrath believes that regions with multiple startups and less competition are attractive to people looking for careers in the the startup world. Olson explains that surrounding universities are also great resources in the region because they attract young, energetic talent.

 

Cons:

There’s a lack of experienced networks.

Olson explains that while the energy of the area and his employees was vibrant and forward-thinking, finding experienced executive talent is an issue. It isn’t exactly ideal to hash out the challenges of managing a team to the team itself. There is a need for networks of experienced techies for executives looking to learn how to best manage their startups.

Finding adequate funding and local investors can be a challenge.

McElrath explained that, while there are people in Chattanooga “doing and building for the next generation,” finding investors can be difficult because they can’t yet see the promising outcomes. When asked what he would change if he could change just one, McElrath says, “I wish that Chattanooga would have been what it will be in 10 years, 10 years ago.” People need to see the tangible effects of bringing tech into the community. Kaye and Olson agree that selling the business to local investors is difficult because they speak a different language. Tech jargon isn’t always understood or even welcomed in places rooted in the manufacturing industry.

The general consensus: The South is full of people interested in building up their communities, but for the vision to come to fruition entrepreneurs must be ready to spend more time selling that vision in an effective way. Communication, patience and a steadfast commitment to the community are integral for entrepreneurs looking to reap the benefits of doing tech in the South.  

 

 

Jun 14, 2017Emma Tamplin

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10 months ago In the South, Startup Lessons36|86, Atlanta, Chattanooga, panel, Raleigh66
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Emma Tamplin

Emma is the summer 2017 editorial intern at Startup Southerner and a student of Sociology and English Literature at Belmont University. She uses reading, writing and photography to explore her interest in people and society. Emma is interested in the role of education, infrastructure, and religion in creating equitable and sustainable communities.

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