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Wanna start a business? It is just possible that the time is right in New Orleans.
The local climate for startups has received considerable attention of late. That is because the national business press has picked up on New Orleans’ trend toward “clustering” fledgling businesses together. Newspaper and magazine stories about local entrepreneurial “hubs” have appeared with regularity during the past six months.
The thinking behind the hub concept is that by locating entrepreneurs close to each other, their shared energies and instincts for innovation will work to their mutual benefit.
Local real estate developer Sean Cummings launched one of the first such hubs in 2007. Dubbed Entrepreneur’s Row, the Camp Street site has become home to seven young, technology-based businesses that feed off one another’s energies. Among the tenants are the Receivables Exchange, an online marketplace for buying and selling business receivables, and Free Flow Power Technology LLC, a company that plans to install underwater power-generating turbines in the Mississippi River.
More recently, advertising business owner Robbie Vitrano started a hub he calls Icehouse, which provides low-cost office space at a St. Phillip Street address to a half-dozen growing businesses. And in the Upper 9th Ward, nonprofit business accelerator Idea Village started the Entergy Innovation Center, aimed at clustering startups in that area. So far it houses a community technology center and has drawn two retail tenants: Lollipop Boutique, a children’s shoe store; and Unlimited Communications, a telecommunications and bill-pay store.
Greater New Orleans Inc. President Michael Hecht says such business clusters not only benefit the participating companies, but also make it easier for organizations like his to market the city to potential new and expanding business clients.
Not long ago, the business development agency partnered with Idea Village on a digital media hub called the I.P. (intellectual property), which currently houses local businesses TurboSquid, iSeatz, Carrollton Technology Partners and LaunchPad. Idea Village, itself, also has moved into the Magazine Street space, which formerly housed a local law firm. Hecht says I.P. serves as both a physical and symbolic heart of local creative media and technology companies, and it gives business marketers something tangible to show to outside prospects. “It lets us take observers there and say, ‘This is where it’s happening,’” he says.
While business clustering has been the focus of much media attention, veteran entrepreneur and Tulane University professor John Elstrott says the trend is but the latest in a series of positive developments in New Orleans business.
Elstrott describes today’s local entrepreneurial climate as “attractive, stimulating and inviting.” The post-Hurricane Katrina flow of recovery money into the city and an influx of young people anxious to make their mark here have been big pluses, he says. While he notes that both the city and the state could stand a few improvements in regulatory, tax and zoning matters, “overall there’s a sense of optimism in the city that we can now get things done that we couldn’t get done before. It’s just an exciting environment.”
As executive director of the Levy-Rosenblum Institute for Entrepreneurship at Tulane, Elstrott, along with his colleagues, is trying to capitalize on and support local business trends with new programs. An annual business plan competition at the university’s A.B. Freeman School of Business has helped to raise the school’s profile regionally and nationally. That, along with programs in entrepreneurship – including a recently launched social entrepreneurship initiative that focuses specifically on New Orleans – have helped put Tulane in enviable company. A list published by Entrepreneur magazine and The Princeton Review recently ranked Tulane at No. 4 among the top graduate schools in the nation for entrepreneurship.
The university’s rising star has helped attract new talent, such as Stephanie Barksdale, who’s helping to get Tulane’s social entrepreneurship initiative off the ground. Barksdale says the initiative is the school’s response to students and community leaders who have urged “using innovative ideas to create social change.”
This year, Tulane’s annual business plan competition will include a social entrepreneurship component that offers a $20,000 prize to the student who presents the winning proposal for a socially responsible, sustainable enterprise that will benefit New Orleans.
Barksdale says the university also will present a speaker series that will bring national business leaders to the campus. Speakers will include Darrell Hammond, founder and CEO of KaBOOM! Playgrounds, which aims to dramatically expand the availability of playgrounds throughout the country; Bill Drayton, founder of Ashoka, the world’s leading network of social entrepreneurs; and Blake Mykoskie, founder of TOMS Shoes (with every pair of shoes purchased, the company gives a pair of shoes to a child in need).
Tulane also has begun a search to fill its newly endowed chair in civic engagement and social entrepreneurship. “There’s a great energy in the community, and we feel Tulane can be the institution that supports academic thinking in this field,” Barksdale says.
Meanwhile, still more activity is afoot off-campus, with the development of Social Entrepreneurs of New Orleans.
The organization’s mission is to “support emerging and early-stage social entrepreneurs with their most pressing needs by connecting them to resources.” SENO is working with a few dozen local entrepreneurs to help find the assistance and support they need to grow.
As anyone who has ever started a business can attest, the road to success is long and difficult. A high percentage of startups don’t survive to celebrate their fifth year in business. Nevertheless, Tulane’s Elstrott believes the environment for building new businesses in New Orleans is outstanding. Along with other factors in entrepreneurs’ favor, he says, access to capital is improving.
“I think you have a ready group of angels out there,” he says, referring to sources of startup capital known as “angel investors.” He adds that venture capital and other types of new business financing also are loosening up.