On Thursday the Charlottesville Business Innovation Council held a Tech Night Takeover at the Haven with a focus on space for entrepreneurial growth in Charlottesville. One of the larger TNT events to date, The Haven was abuzz with members of the startup community, real estate developers, and city, county, and elected officials, a testament to the importance of the topic.

"We know that people in Charlottesville are bright, have good ideas, and can set up companies that can grow exponentially.
But the critical element that needs to be addressed is space."

Martin Chapman

Martin Chapman, Founder of Indoor Biotechnologies and Vice Chair of CBIC, kicked off the discussion by highlighting the space problem in his view – a lack of 2 to 10,000 square foot spaces near downtown Charlottesville. “We know that people in Charlottesville are bright…have good ideas…and can set up companies that can grow exponentially,” he stated. “But the critical element that needs to be addressed is space.”

A panel of three local experts joined Chapman onstage to provide insight on the space conundrum including Carrie Roth, the newly appointed CEO/President and Executive Director of the successful Virginia BioTechnology Research Park, and Tim Miano, Co-founder and Chief Executive Innovation Officer of SP@CE, a $10-20 million “resource aggregator and innovation accelerator” in its early stages. Delegate David Toscano, House Democratic Leader in the Virginia General Assembly and representative of the 57th district rounded out the trio with his ample knowledge of state and regional initiatives and insight on the government’s view on tech companies.

On the Cusp of Doing Extraordinary Things

"You must form a leadership network – a core group of dedicated [stakeholders] sitting around a table…saying yes,
this is a problem that’s worthy of being solved and should be solved right now."

Tim Miano

Heads nodded in agreement at Tim Miano’s introductory statement that the night’s discussion was a timely one considering “Charlottesville is on the cusp of doing some really extraordinary things.” He went on to acknowledge that Charlottesville was definitely lacking in “innovation infrastructure,” and community collaboration. “No one group in Charlottesville can solve this by themselves. It requires a community of leadership to solve this problem together.” Miano called upon the stakeholders of an ‘innovation ecosystem’ including entrepreneurs, funders or high net worth individuals, the government, the community, the university, and large corporations to join forces in solving what he thinks is a “well understood issue” and one that is “entirely solvable.” He emphasized that Charlottesville already has these necessary stakeholders, including an extraordinarily innovative, creative, and high net worth community – nationally ranked 8th in venture capitalist funding, just behind Austin, TX. However, the community suffers economically from a prisoner’s dilemma and Miano reminded the audience that in Charlottesville, where we tend to look to our highly-esteemed university to solve our problems, “the role of universities are to educate its students. It’s not the mission of a university to reach out into the community and solve its bottleneck issues…it’s fundamentally not their role.” Citing an article by the Brookings Institute, Miano stressed, “Step one is you must form a leadership network to solve this problem – a core group of dedicated people sitting around a table, looking each other in the eye, saying yes, this is a problem that’s worthy of being solved and should be solved right now.”

Partnership in Action

"Startups are creating all the new jobs,
and that’s what we’ve got to be about here.”

David Toscano, House Democratic Leader in the Virginia General Assembly

A partnership between VCU, the city of Richmond, and the Commonwealth, and with over 55 different organizations, including non-profits, state forensic labs, large investors like Altria, VCU labs and a bio-tech center, the Virginia BioTechnology Research Park is a prime example of what collaboration can achieve. Despite its successes, Roth reminded us not to focus solely on the real estate, but to think strategically. “We have a strong alliance and partnership, but what we’ve struggled with over the last three years is ‘what do we want to be when we grow up?’” Roth explained that although the park has excelled on the real estate side, they should have focused more on job creation and helping startups move away from the accelerator and grow. “We’re moving into a larger innovation ecosystem. Instead of focusing on spaces, it’s about focusing on activity.”

When companies do outgrow their space in the BioTech Center, the city of Richmond is well equipped to handle their needs. “We have a partnership already with all of our major localities and the city of Richmond to work closely with our economic development allies to make sure that we have the product online.”

Is It All About The Money?

But Richmond has its challenges as well. Finding affordable wet lab space is difficult and can inhibit the growth of companies, or force them to look elsewhere.

“The Biotech machine in Charlottesville is really spot on,” said Miano. “Tom Skalak told me there are 45 biotech companies housed in Charlottesville, so there’s definitely demand for biotech space. But as Carrie mentioned, there are hurdles and costs associated with that space.” Miano suggested developers find anchor tenants to offset the costs of space for startup companies that have high-tech needs, but low-tech budgets. 

Looking to Delegate Toscano, Chapman redirected the conversation to the legislative side of the house, asking for the government’s views on tech companies and how they can help accelerate their growth. Toscano reminded the audience that government officials were in attendance. “Now’s the time to lay it on them,” he joked.

Highlighting the need for a more diverse economy in Virginia, Toscano said, “We are going to have to create some pretty good nodes of technological and bio science activity. Charlottesville, for its size, is really in quite a unique position.” He also asserted the governor’s focus on creating jobs and his enthusiasm for business growth. “You’re going to see more money and more initiatives to encourage this area.” 

Toscano also emphasized a need to reprioritize tax credits the state currently offers. “We created, many years ago, a tax credit for coal that totals $90 million and that JLARC recently concluded has outlived its purpose. That’s $90 million for coal and $6 million for R and D for bioscience?” 

Martin added that the tobacco commission also irks those in the biotech sector. Toscano admitted that the tobacco commission does some good, like providing seed funds that allow small businesses to expand, but that other recent projects haven’t made a lot of sense. “You have to start wondering, do we need to get a more business oriented approach on that commission?”

Carrie Roth stressed that there are grants in the state catered to small businesses that often go unused. Toscano added, “We are not going to build a huge bioscience company, we’re going to build a lot of small bioscience companies. And to the extent to which we have programs in Virginia that are targeted to small businesses, it’s going to help us. Startups are creating all the new jobs, and that’s what we’ve got to be about here.” 

How do we make it happen?

According to a 2010 Kauffman Foundation report, since 1977, in all but 7 years, net job growth has come exclusively from startups. If startups are important to the economic success of our community, how do we help them make a home in Charlottesville?

“As Carrie and David have mentioned, [these spaces] require a certain critical mass. You need enough people coming together with enough density to make these things happen,” offered Miano. “That’s technology and biotech, but it’s also arts and design and community engagement.”

Private developers were encouraged by the panel to create new space that’s close to amenities, namely the downtown mall, move-in ready, but also affordable to startups. 

Miano added that many established companies that began here had to fight to stay in Charlottesville due to the infrastructure bottleneck and the difficulty finding space to grow, a bad plan for economic development. And when Miano’s team polled local businesses to determine their needs they all said the same thing – they want a hub where they can come together and have friction points. 

Roth noted the importance of stakeholders collaborating with the government, “The tools we can get from the general assembly is to help foster and grow a vibrant startup community. The space issue is very unique to the community and they need to be authentic to the community. But you need the government to champion the types of spaces you’re building…and remove roadblocks.”

But Toscano believes government should have a very specific role in the entrepreneurship and economic development game. “Governments are never good at finding who the good entrepreneurs are. The market finds the entrepreneurs,” he explained.  “The beauty about having real estate people in the room is that if there are tech people in the room, and they have space needs, they can say, ‘we want a hub, help us get it.’ To the extent you need some government help, then get a little grant to help you do it.” 

Final Thoughts

David Toscano:

“Great places don’t’ just happen, they’re products of decisions people take and a lot of different areas. We’ve got a pretty good place, I’d say a pretty great place, but we can make it even better. If you’re in the room helping people make the decisions, it’ll get better.”

Carrie Roth:

“Charlottesville has a tremendous community, the opportunities and the assets here are some of the finest in the commonwealth. The number of actives that are going on at UVA – Michael Straightiff and his team are doing an incredible job. The talent that’s coming out of UVA is equally as important and let’s make sure we’re keeping those people here in Virginia. We spent a lot of money educating them. But when you’re making these decisions, don’t forget the quality of place and what makes it a livable community and a likable community. And then your industry clusters can grow.”  

Tim Miano:

“I want to emphasize that this is actually a pretty well understood issue. I would direct anybody interested in this topic to read the Brookings Institute report on how to build innovation districts. It gives point by point examples, it describes all the successful financial models in the US, around the world, from urbanized science parks to anchor tenant models to revitalized warehouse districts. It’s well understood. 

This is about Charlottesville’s specific needs, and the bottleneck in Charlottesville at this moment is leadership and infrastructure. If you remember nothing else I have said tonight, think this, if you do not build it, they will not come.”