Density of startups. Density of innovation. Density of entrepreneurs. Density of knowledge being shared. Density of events.
Density, most entrepreneurship experts say, is key to a thriving startup community, one that is supporting and growing startups at all stages, attracting capital from inside and outside of the community and importantly, creating the collisions between community members that prompt deals to happen and connections to be made.
Today, American Underground
, the network of startup workspaces in downtown Durham and Raleigh (and parent of ExitEvent
), releases its first annual report
, revealing double the density of a year ago, 323 new jobs and more than $40 million invested in AU-based and affiliated companies. Early 2015 expansion
to two more floors on Main Street in Durham will let the network expand from 180 companies to more than 200. 680 people work in the three spaces today.
American Underground Chief Strategist Adam Klein compares AU's impact to a large creative company moving into the center of downtown Durham.
“It brings dynamic energy and excitement and also a great economic ripple effect to a downtown,” Klein says. The report shows that AU tenants spent $674,700 at downtown Durham and Raleigh businesses during the year.
But the big picture of today’s report isn’t necessarily the growth and success of the Southeast’s largest startup hub. According to Chris Heivly
, co-founder of the Startup Factory and a long time Triangle community leader, it represents growth of an important and necessary part of the startup community that leads to the creation of more, bigger and better companies, the kind that earn national recognition (Read his recent blog post
for more on that).
With density, Heivly says, comes everything else. And American Underground is proving that.
More national attention—Google was first, naming American Underground one of eight Google for Entrepreneurs hubs in 2013 and hosting two of its teams for a high-profile Demo Day earlier this year (in which AU teams Windsor Circle and Automated Insights came in first and second place). Klein promises more partnerships in 2015, and American Underground has hired Jesica Averhart, formerly in charge of American Tobacco campus partnerships and sponsorships, to lead the charge.
More educational programs—The Iron Yard code school was an addition in 2014 and Klein hints at another educational initiative focused on digital marketing in 2015. Marketing training is a request from AU members and others in the community.
AU also kicks off a new program called the Landing Spot this week for laid off workers from Cisco and other large corporations in town. They receive three months of free co-working and mentorship from Groundwork Labs. Four people have taken advantage of the program.
More benefits—Red Hat took interest in American Underground's efforts this year, providing free workspace at its Mountain View, Calif. office for AU startups traveling to the city for meetings with customers, potential partners and investors. Google has also expanded its network to provide members of its hubs access to workspace in 24 cities around the globe. 12 AU members have taken advantage of the perk, working out of hubs in Austin, Chicago, San Francisco and London.
More focus on inclusion—With sponsorship dollars from Google this year, AU helped to launch the SOAR initiative to better support females in startups with mentors and educational events. Smaller efforts included adding a nursing room for moms working at the Main Street campus, serving wine at events and tweaking the design and color scheme of the spaces to attract to all populations. AU reported a dramatic increase in female members over the year—23 percent are women, up from 7 percent at the beginning of 2014. AU also hosts Code the Dream, a series of coding classes for minority populations in partnership with Uniting NC. It's an effort to prepare more workers for careers with companies at AU and in the broader community. 16 people completed the first classes and a second round kicks off in Raleigh in January.
Klein's team is well studied on the research. More diverse companies perform better and hire more diverse workforces, he says. And he believes the Triangle has an advantage over Silicon Valley, which is frequently criticized for its lack of diversity.
"The Silicon Valley community has calcified so much—the leadership is established," he says. "In Durham and Raleigh, you don't see that yet. Our entrepreneurial initiatives are still just getting started. We can broaden the leadership in the community and create a talent pipeline."
More diversity initiatives will be announced in the new year too.
Klein says the report is a first step at tracking the performance of the companies in the underground, in hopes of better understanding how that density impacts their performance over time.
Heivly hopes it leads to even bigger goals—say 500 companies in downtown Durham and even bigger ones setting up offices, like Google or Facebook.
"I don't think you can stop creating enough density," he says. "I don't know if that's for AU or ATC, but I do think space is a piece of it. You want to be the convener, the place where people show up."
The report also helps to show the local economic impact of startups to city and community leaders—Durham Mayor Bill Bell will attend today’s report reveal.
"What we're really saying is this is where a lot of action is taking place, where a lot of great companies are gathered and making incredible progress," Klein says. "We have a role in that, but by and large, we are here to support the companies, to share their stories."