Category: Tech Startups

Mar 30

TEXTiUM Launches Precision Texting Product for Direct Mail Industry for a Personalized Consumer Experience

TEXTiUM CEO and founder, Craig Schmitz

TEXTiUM, a St. Louis-based tech company providing a precision texting platform for direct mail advertisers, announced today the launch of its patent pending product prior to the National Automobile Dealers Association (NADA) conference held March 22-25 in Las Vegas, where it will be formally introduced to users.

Craig Schmitz, TEXTiUM CEO and founder, said, “TEXTiUM is the optimal lead generating platform for the direct marketing industry. The technology allows the consumer to immediately respond to a direct mail offer through their phone, provides an instant personalized response to the consumer directly to their smartphone, collects their mobile phone number and instantly delivers the information to the advertiser in the form of a real-time quality lead.”

Why TEXTiUM Was Founded

Schmitz, a serial entrepreneur and current stakeholder with William Craig Diversified Holdings, a St. Louis-based venture capital firm that supports funding for start-ups, said that he used direct mail campaigns with the previous businesses he owned. The challenge Schmitz experienced with direct mail was that it was not as effective because the results for qualified leads could not be measured accurately.

Now that the preferred device to receive information is a mobile phone, Schmitz saw an opportunity to combine a direct mail piece with a personalized text response to the consumer. He knew that integrating a direct mail campaign with a personalized text would create a better process to respond instantly to consumer interest while at the same time capturing information for follow-up by the advertiser.

TEXTiUM can be used for any direct mail campaign by any business in any industry. Applicable industries include automotive, real estate, mortgage lending, banking, financial services, insurance, education, professional service providers, health care and not-for-profit organizations.

TEXTiUM does not design, print or sell direct mail. The technology is to be used and integrated with direct marketing campaigns.

How TEXTiUM Works

Advertisers target specific customers with a unique offer or message using a direct mail piece. When the consumer uses a text to respond to the direct mail offer, they receive a personalized reply created specifically for them. As the consumer responds, TEXTiUM acquires their mobile phone number that is combined with other pertinent data and instantly forwarded to the advertiser as a qualified lead.

“Grabbing a person’s attention isn’t as simple as mailing a postcard. When direct mail arrives, the recipient must at least touch it – if only for a moment before recycling it – but if you’ve crafted a targeted, meaningful and personalized message—with a convenient response mechanism—it will get opened, and action is more likely to be taken immediately. TEXTiUM technology will help grab the attention of consumers and connect them with responsive and innovative advertisers,” added Schmitz.

 

Contact:

Craig Schmitz, CEO and Founder, TEXTiUM 314.565.4148; craig@craigschmitz.com

Ann Marie Mayuga, Partner, AMM Communications 314.485.9499, annmarie@ammcommunications.com @stlpr

 

About TEXTiUM:

Founded in 2017, TEXTiUM is a pioneer for integrating the most modern texting technology with traditional direct mail advertising. TEXTiUM is the only product available that gathers rich, empirical data for direct marketers to offer targeted, cost-effective, campaigns. Its proprietary technology conveys unique offerings and information to consumers while acquiring the mobile phone number that is immediately shared with the advertiser in the form of a high quality lead. To learn more, please visit https://TEXTiUM.com, or call, 1.833.TEXTiUM.

Mar 21

Tech Startup Hubs in St. louis: The Cortex District

image of Cortex Innovation District — tech startup hubs in St. LouisWhen you hear the word “technology,” what comes to mind? You probably think about the devices that rule your life: your smartphone or computer. Maybe you think about a new app or streaming service. Technology embodies many different product and service categories spanning a wide range of industries.

What about the words “technology startup?” — Do they make you think of St. Louis?

Where do successful tech startups live?

For most burgeoning entrepreneurs looking to build unique companies, apps, products and/or services, the coast is oftentimes a rather appealing place to begin. As it stands today, California’s Silicon Valley is home to the nation’s largest technology community while New York remains to be the mecca for some of the United States’ most prestigious businesses.

For many tech startups looking to make a difference in the world, however, destinations like California and New York are unreachable — the cost of living is too expensive, or the thought of being swallowed up by a densely populated area is too daunting to consider.

These reasons, among many others, leave entrepreneurs searching for an alternative destination — a place that offers creative work spaces, project funding and rich local culture.

Enter the city of St. Louis.

Building a Community of Innovation

Thanks to St. Louis’ inviting midwest hospitality, business resources and pool of sharp talent from local universities, St. Louis has cultivated one of the fastest growing technology startup scenes in the United States. Contributing to this growth is the largest, most renown tech startup district St. Louis has to offer…

Cortex District

The Cortex District is known as St. Louis’ “innovation community.” Located about two miles east of Forest Park and just south of the Central West End, this up-and-coming zone is the home to a series of co-inhabited offices filled with innovative thinkers and doers.

At the time this article was published, Cortex boasts three unique locations and one organization that hosts weekly startup events:

Center for Emerging Technologies (CET)

“Founded in 1998, the Center for Emerging Technologies (CET) is the largest and oldest Innovation Center in Missouri. CET is nationally recognized for providing the infrastructure and resources needed for early-stage, high-growth companies in the fields of information technology, bioscience and consumer/manufactures products to innovate and thrive. An affiliate of the Cortex Innovation Community since 2012, CET fills an important program role in the Cortex district and broader St. Louis region.” — CET St. Louis

CIC St. Louis

“CIC started in 1999 with a vision and a simple idea: Startups make the world much better. We can help them by setting up and managing their office for them so they can focus on their business. We believed we could do that better than anyone else and we set out to prove it. Since then, more than 1400 companies have chosen CIC as their home and many have gone on to prove their value to the world as startups. More than $1.8B of venture capital has been invested in companies that were headquartered at CIC. We now house over 800 companies, most of them startups, and we haven’t stopped making CIC better every day.” — CIC St. Louis

BioGenerator

“BioGenerator is an evergreen investor that creates, grows, and funds innovative companies and talented entrepreneurs in the St. Louis region. BioGenerator identifies and de-risks commercially promising innovations and services; advises innovators and entrepreneurs; recruits and supports entrepreneurial talent; makes staged investments grounded in rigorous due diligence; and offers access to enabling lab space and capital equipment. We position companies to navigate the unique challenges of early-stage bioscience company development.” — BioGenerator

TechShop

“A playground for creativity, TechShop is an open-access, DIY workshop and fabrication studio. We are a community-based space where entrepreneurs, artists, makers, teachers and students come together to learn and work together.” — TechShop

Venture Café St. Louis

“We believe innovation is a process to improve the human condition.

The focus should not just be about making apps. The real challenges facing the human condition require innovative solutions. There is room for innovation in education, the arts, government services, healthcare, advanced manufacturing, social enterprise, and many other sectors. Join us each Thursday at 4240 Duncan or attend Venture Cafe Nights: Forward Through Resilience on the 2nd Tuesday of each month or Venture Cafe Nights: 39 North on the 3rd Tuesday of each month.” — Venture Café St. Louis

Want to learn more about tech startups in St. Louis?

In a mission to promote the absolute BEST of St. Louis, Elevate STL highlights the most innovative high tech startups, biomedical growth and nationally leading entrepreneurship our city has to offer.

For more stories relating to tech startups in St. Louis, bookmark our online Tech Startups category, and check it often. There will be more to come soon. Stay tuned!

Mar 15

Techie Playground opens in Cortex District

Want to create the next great app, build the next great invention, create furniture or weld a new project? TechShop has opened a location in St. Louis’ Cortext District where you can do just that.

The workshop and fabrication studio chain opened in California nearly 10 years ago and has since expanded to Arizona, Michigan, Pennsylvania, Texas and Virginia, with a Brooklyn location opening soon.

Square, the ubiquitous credit card swipe/POS app and hardware for mobile phones and tablets got its start in a TechShop in California, where St. Louis born co-founder Jim McKelvey built his first prototypes of the swipe device.

“I think it’s fantastic for the St. Louis region because there are certain things that you need equipment to do and there’s a culture of experimentation there,” McKelvey said in a phone interview with the St. Louis Post-Dispatch. “TechShop is a big playground for makers.”

Each TechShop offers a host of equipment and tools for bourgeoning entrepreneurs and inventors to use including large sanders, glass cuttors, automotive tools, electrical measurement tools, drill presses, table saws, DSLR cameras, 3D printers, plasma cutters, and more.

For access, a membership is required. Dues are $150/monthly and gives you access to all tools and instruction in the building, provided you pass safety and basic use classes for each tool.

TechShop isn’t just for members though. Nonmembers can take advantage of any of their classes for a fee. Classes available include metal working, CAD, woodshop, sewing and more.

No experience is required for TechShop classes and TechShop has even worked to create classes for date nights. Discounts are given to students and active military personal.

It’s safe to say St. Louis’ start up and maker community is excited for TechShop’s opening. The workshop is currently on track to reach its goal of 1,000 St. Louis area members before it even opens.

Jan 31

St. Louis, Entrepreneurial Boomtown

Back in the mid-oughts, Jarret Glasscock was happily ensconced at the Genome Sequencing Center at Washington University in St. Louis, working on the federal government’s Human Genome Project. He and his fellow scientists were exceptionally good at what they did: they could sequence the DNA of a cell for about 1/100,000th the cost of traditional methods. Pharmaceutical companies soon came knocking on their door with contract offers to do DNA sequencing for drug development purposes. But the center was busy fulfilling government grants and kept turning the offers down. After a few years of this, says Glasscock, “we finally got it through our thick skulls that maybe there’s a need for some kind of company to exist.”

So, in 2008 Glasscock and a few colleagues pulled together whatever money they could, rented a former photographer’s studio downtown off Craigslist for $700 a month, and filled the office with half a million dollars’ worth of used genetic sequencing machinery—which they cleverly managed to convince the company that sold it to them to finance. Pretty soon, their new company, Cofactor Genomics, was making money. They hired more staff, bought better equipment, and briefly made international news when they helped map the genome of heavy-metal icon Ozzy Osbourne.

Eventually, Glasscock became the company’s CEO and the firm moved to its current digs, a squat brick industrial building in Midtown St. Louis that backs up to Interstate 64. A metal coatings factory sits on one side; on the other, across a vast empty parking lot, a giant grain elevator looms.

Inside, the décor is contemporary high tech with a slight midwestern twist. It’s mostly one big open space, with a couple of glassed-in conference rooms with math equations scrawled on the panes. Two ski lift gondolas, bought for $800 each from a resort in Wisconsin, are available for more intimate meetings. On a wall is a vintage sign that reads “Gun Shop” next to a picture of a revolver. The barrel of the gun points toward the back, where the gene sequencing lab is located behind closed doors secured with push-button combination locks—a precaution demanded by Cofactor’s pharmaceutical industry clients, who are serious about protecting their intellectual property. In a corner by the back door is a drum set and some old bikes the company’s eighteen employees can use to go to lunch. There haven’t been many places to eat in this aging industrial part of Midtown. But more and more restaurants and coffee shops are popping up to cater to the 150 startups now occupying several rehabbed buildings in the neighborhood, which has been renamed the Cortex Innovation Community.

Cofactor is now being feted by the kind of West Coast venture capital investors who, a decade ago, would never have thought to put money into a St. Louis startup. The firm’s leaders were invited to spend last summer networking at Y Combinator, the famed Mountain View seed fund that nurtured Airbnb and Dropbox. In February, Cofactor acquired a San Francisco–based competitor, Narus Biotechnologies.

To many Americans, St. Louis is known for urban dysfunction and slow economic decline. It was in the nearby suburb of Ferguson in 2014 that riots broke out after a white police officer shot an African American teenager. St. Louis is one of those places where every year or two another big homegrown company seems to get bought by outside owners: aircraft maker McDonnell Douglas in 1997, food processor Ralston Purina in 2001, May Department Stores in 2005, brewer Anheuser-Busch in 2008. As this magazine recently reported (see Brian S. Feldman, “The Real Reason Middle America Should Be Angry,” March/April/May 2016), as a result of changes in federal antitrust and other competition policies, the number of Fortune 500 companies located in St. Louis has shrunk from twenty-three in 1980 to nine today.

Growth industry: Kristine Menn, greenhouse coordinator for the St. Louis-based renewable fuel startup Arvgenix, works on a field pennycress flower in the Danforth Plant Science Center.

Growth industry: Kristine Menn, greenhouse coordinator for the St. Louis-based renewable fuel startup Arvgenix, works on a field pennycress flower in the Danforth Plant Science Center.

But as the story of Cofactor Genomics illustrates, a city that has lost so many big old companies is becoming home to a lot of small new ones. Last year, Popular Mechanics deemed St. Louis to be one of the fourteen best startup cities in America, and in January of this year, Business Insider said it had the “fastest-growing startup scene” in the country.

St. Louis is a long way from becoming another Silicon Valley. But its sudden emergence as a hotbed of entrepreneurship holds lessons for a country struggling to make a growing economy benefit Americans who don’t happen to live in a handful of booming coastal megalopolises. For decades, St. Louis followed the familiar economic development playbook: try to attract big out-of-town companies, or keep local ones from leaving, by showering them with tax breaks and other subsidies. While it hasn’t exactly abandoned that old strategy, St. Louis has increasingly shifted to a new one of attempting to grow its own small firms. Metro areas across the country are trying to do the same, in many cases with little to show for their efforts. St. Louis seems to have hit on the right formula, though actions in Washington could determine whether, over the long term, it succeeds or fails.

While it may be hard for people who think of St. Louis as part of “flyover” country to wrap their heads around the idea of it as a startup haven, the numbers don’t lie. Business creation in St. Louis has risen every year since 2009, jumping 18 percent from 2012 to 2013, a year business creation actually fell nationally. In 2006, St. Louis was 11 percent below the national average in the number of new firms per 100,000 people. By 2012, St. Louis had narrowed this “startup density” gap to only 3 percent, according to the Kauffman Index of Entrepreneurship. St. Louis now ranks twenty-sixth among the top forty metro areas by startup density, ahead of some cities that garner lots of attention for their entrepreneurship scenes, like Pittsburgh, Columbus, and Philadelphia.

St. Louis’s startup scene is most noticeable in the information technology sector, led by such firms as the social media company LockerDome and app developers RoverTown and Aisle411. Venture capital companies poured $176 million into area IT startups in 2015, up from $66 million in 2013, according to the St. Louis Tech Startup Report. That is roughly double the figure of Kansas City, a region of a similar population on the other side of the state. St. Louis tech startups employed more than 1,400 people in 2015, up from less than half that in 2011. In 2015, three new accelerators started in St. Louis, and three new venture capital funds entered the fray.

But it’s not just IT and biotech startups that are flourishing. New St. Louis firms are popping in sectors like education, food, and—in the longtime home of Budweiser—craft beer.

The roots of St. Louis’s startup boom go back to the late 1990s, when a group of political and business leaders, frustrated with the metro area’s slow economic growth, began studying how other old industrial cities, such as Boston, were turning themselves around. They concluded that St. Louis had the necessary resources—highly ranked universities, med schools, and hospitals, plus major research-focused agricultural firms like Ralston Purina and Monsanto—to become a hub of life science startups. This precipitated the creation of a number of economic organizations that today form a kind of infrastructure for entrepreneurial activity: new investment funds, incubators for companies, new workforce programs.

Two organizations were especially critical in these early years. One was the Donald Danforth Plant Science Center, which opened in 2001 with funding from Monsanto and the Danforth Foundation (William H. Danforth was the founder of Ralston Purina). It has quickly grown into a world-renowned research facility, attracting tens of millions of dollars in federal grants annually to support hundreds of plant scientists. These scientists work directly with ag-tech startups developing new strains of crops that have, say, higher nutrition value, or better capacity to withstand the droughts that come with climate change. The center also cofounded the Ag Innovation Showcase, which has become the premier event in the nation around agricultural technology and innovation.

The other key institution was the Skandalaris Entrepreneurship Program at Washington University, begun in 2001 and expanded in 2003 with a grant from the Ewing Marion Kauffman Foundation. Renamed the Skandalaris Center for Interdisciplinary Innovation and Entrepreneurship, it became a hub of entrepreneurial training and networking, with a mentoring program for budding area entrepreneurs that has proved invaluable.

To many Americans, St. Louis is known for urban dysfunction and slow economic decline. In fact,Business Insider says it has the “fastest-growing startup scene” in the country.

But by 2008, all this activity still wasn’t generating much in the way of actual economic outcomes. This was partly a result of the inherent cycles of research and development and commercialization in the sectors St. Louis chose to stress. It takes longer to build a plant science company than a new mobile app startup. Then the Great Recession hit, shrinking St. Louis’s per capital personal income by 5 percent that year and eventually driving the metro unemployment rate to over 10 percent. Worst of all, 2008 was also the year that multinational brewing giant InBev acquired Anheuser-Busch, the corporate crown jewel of St. Louis, and laid off hundreds at its South St. Louis headquarters.

That same year, a former telecommunications manager and entrepreneur named Jim Brasunas had an idea. Brasunas had lived in St. Louis since 1994 and been involved with several technology companies, including running an incubator in downtown St. Louis. In his dealings with tech entrepreneurs around the region, he discovered that they all felt alone in their attempts to build successful companies there. They didn’t know other up-and-coming entrepreneurs in the same sector, or have successful older ones they could turn to for advice. Brasunas also learned that area investors looking to put money into IT startups had no idea that there were any such firms in St. Louis. Sometimes an entrepreneur and an investor would be on the same flight to San Francisco to talk to venture firms, utterly unaware of each other’s presence. “After hearing the same story twenty-five or thirty times, I just started getting these people together casually,” says Brasunas. In 2008, he formalized this network by starting a nonprofit organization, the Information Technology Entrepreneurs Network (ITEN).

To get his operation off the ground, Brasunas applied for funding from the Missouri Technology Corporation (MTC), a public-private investment fund controlled by the state government and championed by Governor Jay Nixon. The MTC’s very existence was another example of the change in thinking that was occurring about how to jump-start economic growth. As in just about every other state and municipality in the country, Missouri’s strategy had long been to throw tax dollars at big, footloose corporations. It’s a popular practice with voters and politicians, affording the latter the opportunity to hold press conferences to announce that they’ve lured a new corporate headquarters to the area or kept an existing one from leaving. But in terms of actually boosting net economic activity, it’s a mug’s game. A study by the researcher Nathan Jensen found that St. Louis–area companies receiving Missouri state tax incentives have actually performed worse in terms of creating jobs than companies elsewhere in Missouri that didn’t receive incentives.

The MTC’s modest initial grant to ITEN in 2008, plus later expansion grants, turned out to be wise (the Kauffman Foundation also supported ITEN). Over the next eight years, ITEN helped catalyze the entire entrepreneurial ecosystem in St. Louis. Today, many entrepreneurs and others give a huge amount of credit to Brasunas and ITEN for building connections and thus creating a new network of entrepreneurial support. Indeed, Yasuyuki Motoyama, in a paper coauthored with Karren Watkins at Washington University, points out that the “connections between novice and experienced entrepreneurs” that ITEN facilitated are probably the single-biggest factor in St. Louis’s entrepreneurial emergence.

For decades, St. Louis followed the familiar economic development playbook: try to attract big out-of-town companies with tax breaks and other subsidies. It has increasingly shifted to a new one of attempting to grow its own small firms.

Three years later, the MTC made another shrewd bet: it put seed money into a new program, called Arch Grants, with a model for economic development unlike any in the country. The organization runs a global competition to identify potential entrepreneurs from virtually any industry sector. It then provides those with the most promising business plans $50,000 equity-free grants and pro bono support services if they agree to build their businesses in St. Louis. Even more important than the money, Arch Grants helps these emerging entrepreneurs connect with each other—building bonds not unlike those among a class of college freshmen—and plugs them into St. Louis’s increasingly thick and energized network of entrepreneurs, funders, work spaces, and social events.

By 2013, all of this activity was bearing fruit. That year, the St. Louis Regional Entrepreneurship Initiative Reportreleased an analysis of entrepreneurial activity and deal flow. According to the report, in 2007 only eleven companies reached “validated startup status.” (This was judged to be when a company reached milestones such as going through an accelerator, receiving equity investment, completing an intellectual property license, and so on.) By 2012, forty-two companies had become validated startups.

Importantly, the composition of startups receiving equity investments had changed significantly. In 2006, two-thirds of investments went to bioscience companies; only a quarter went to tech startups. This reflected the orientation of official economic development efforts in St. Louis. Yet by 2012, the situation was precisely reversed: tech firms received two-thirds of equity investments, and bioscience companies accounted for one-quarter.

Entrepreneurship has also found its way into the old corporate heart of the region: beer. Schlafly, a craft brewery that has been around for twenty-five years, has experienced strong growth and, earlier this year, announced it was doubling annual production to meet demand. Just within the last few years, more craft breweries have followed: O’Fallon Brewery, Urban Chestnut Brewing, and Senn Bierwerks, which will open in 2017. Oh, and don’t forget about the William K. Busch Brewing Co., founded in 2011 by the great-grandson of Adolphus Busch, cofounder of Anheuser-Busch.

In some ways, St. Louis is not unique. What we call “startup fever” has swept the country over the last several years, with cities of all sizes creating accelerators, incubators, pitch competitions, and all sorts of other programs intended to boost entrepreneurship. Pittsburgh, for example, has been celebrated for its entrepreneurial renaissance, with recognition from various “best places to start” rankings, and an increase in venture funding, new incubators, state programs, and more. Similar to Washington University’s role in St. Louis, Carnegie Mellon has played a catalytic role in Pittsburgh entrepreneurship. And yet, by other measures, this activity has yet to translate into entrepreneurial outcomes. In 2014 and 2015, Pittsburgh ranked last among large metro areas on the Kauffman Index, with the lowest rate of new entrepreneurial entry, the second-lowest startup density, and even one of the lowest rates of “opportunity” entrepreneurship. A similar story might be told of cities such as Milwaukee, Cincinnati, and Philadelphia.

What, then, is St. Louis doing differently that might explain its relative success? In a recent article in the journalInnovations, Ken Harrington, who led the Skandalaris Center for over a decade and has been closely involved in the St. Louis startup scene, argues that the secret sauce was “connectivity.” In the past, St. Louis was not without entrepreneurial energy, according to Harrington, but it existed in disconnected pockets. This stymied the formation of an “entrepreneurial genealogy” that occurs when successful entrepreneurs from one generation become the next generation’s mentors and investors. This genealogy is a distinguishing characteristic of places like Silicon Valley.

Home is where the lab is: Cofactor moved from a former photography studio to its current headquarters, which sits across from a grain elevator.

Home is where the lab is: Cofactor moved from a former photography studio to its current headquarters, which sits across from a grain elevator.

A metro area without this genealogy needs to create it by bringing together the disconnected pockets. It’s faddish in economic development circles today to talk about collisions. If you create lots of bars and coffee shops and parks, serendipitous unexpected connections will occur: the strategy is premised on people literally running into each other.

But that’s not what happened in St. Louis. Instead, organizations such as ITEN, the Skandalaris Center, and Arch Grants came into being and intentionally and deliberately built connections and networks.

A good example of how this connectivity can work is RoverTown, a startup that provides student discounts through a mobile app. After receiving an Arch Grant in 2013, the company moved to St. Louis from Carbondale, Illinois. It relocated to the T-REX, a nonprofit co-working space downtown, went through an accelerator program called Capital Innovators, and received a follow-on Arch Grant. It then took part in another program run by ITEN called Mock Angel, which prepares entrepreneurs to make their pitches to equity investors, and secured nearly a million dollars in funding last year. In 2014 it was named the fastest-growing tech startup in St. Louis.
RoverTown is not small-time—they have a satellite office in Chicago, and two VPs of GrubHub are on the board. They are in St. Louis by choice.

RoverTown’s experience also illustrates another side of St. Louis connectivity. One of its investors is Tom Hillman, a serial entrepreneur who formerly owned Answers.com, a leading IT firm based in St. Louis. Hillman has become a central figure in St. Louis entrepreneurship and philanthropy, and embodies the new entrepreneurial genealogy that has developed in the region.

St. Louis’s recent success at fostering startups shouldn’t be all that surprising. The metro area has had most of the ingredients for a long time: a central location, great universities, large sophisticated corporations, an educated workforce, world-class cultural institutions (symphony, art museum, zoo, botanical gardens), suburbs with good schools, and city neighborhoods full of beautiful old homes available at affordable prices. (Okay, yes, St. Louis is very humid in the summer.)

Several key ingredients, however, were only added relatively recently. The first was a change in mentality of the leadership class at the city, metro, and state levels. These folks—elected officials, university presidents, old money muckety-mucks—needed to be persuaded that the traditional ways of trying to foster growth (bribing big companies with subsidies, pouring endless tax dollars into downtown redevelopment projects) weren’t working, and that giving some attention and public and philanthropic resources to fostering startups might. Crucially, the new mentality needed to be shared by executives at the big locally based corporations who have an interest and the autonomy to participate in local civic life. The Danforth Center couldn’t have been built without the help of Monsanto, for instance, and its renewable fuels program is funded by the family that owns St. Louis–based Enterprise Rent-A-Car. In 2015, ITEN launched a corporate engagement program in which startups and large corporations will interact in a variety of ways, including “reverse pitches,” in which the corporations pitch their ideas and needs to startups. Initial corporate partners included Monsanto, the Reinsurance Group of America, and Enterprise.

The second missing ingredient was connectivity. Fortunately, St. Louis had civic entrepreneurs like Jim Brasunas, Ken Harrington, and the founders of Arch Grants, who figured out how to increase the connections among people and institutions in ways that make an entrepreneurial scene gel and grow.

Challenges remain, of course. Despite all the energy and excitement, there’s no point at which the startup scene in St. Louis is “finished” or “complete.” Nearly everyone we have talked to agrees that St. Louis faces a challenge in sustaining today’s entrepreneurial momentum.

Policymakers in Washington could make the city’s job easier—or harder. Many of St. Louis’s most promising startups, especially in the biotech and ag-tech sectors, would never have been started and could not continue absent federal investments in medical and agricultural research. Cofactor Genomics is a perfect example. CEO Jarret Glasscock got his training while working on the federally funded Human Genome Project. Contracts from the NIH and the USDA make up a significant portion of the firm’s revenue. Federal tax credits covered some of the cost of its new building and equipment. In general, more federal funding for these programs would help St. Louis, and cuts would hurt.

The federal government can also help places like St. Louis by remaining economically open and engaged with the rest of the world. Because of the Danforth Center and organizations like BioSTL, a university-led seed investment fund, St. Louis has become a global center of plant sciences, attracting new entrepreneurial companies to the area. Earlier this year, an Israeli company, NRGene, announced that it was establishing its U.S. headquarters in St. Louis—impressively, it is the fourth Israeli plant science company to set up its base in the city in the last two years. If our next president insists on alienating the rest of the world, you can bet that the flow of foreign entrepreneurs into St. Louis and other cities will slow, if not cease altogether.

Sometimes a St. Louis entrepreneur and an investor would be on the same flight to San Francisco to talk to venture firms, utterly unaware of each other’s presence.

Better parental leave policies from the federal government could also help by making it possible for more women to follow their entrepreneurial dreams. St. Louis, like other cities, faces a gender imbalance in terms of participation in the startup scene. Motoyama and Watkins found that men make up 70 to 80 percent of the people who participate in many of the city’s entrepreneurship support organizations. In the United States as a whole, business ownership has fallen among men and remained stable among women, as women make up a large and growing share of the workforce, especially the educated workforce.

More could also be done to open up opportunities for minorities. The talent is certainly there: World Wide Technologies—the nation’s largest black-owned business, according to Black Enterprise magazine—is based in St. Louis. Yet minorities are underrepresented among the new crop of St. Louis startups.

Financing is another area where federal policymakers could extend help to entrepreneurs. While St. Louis has seen an increase in equity investments into startups, most new businesses (including tech firms) do not receive equity financing. Instead, they seek out various forms of credit from banks: loans, lines of credit, credit cards, leasing, trade credits, and so on. Young and small firms, moreover, seek credit from small banks and credit unions at higher rates than large companies do. Yet small banks—including black-owned banks—were hit hard by the financial crisis. Some went under; others were acquired by larger banks that took advantage of decades-old federal deregulatory decisions, a phenomenon that continues to shrink the ranks of small lenders. New federal regulations put in place since the financial crisis have reinforced the advantages
of bigness.

Indeed, arguably the single-biggest favor the federal government can do for St. Louis’s startup scene is to change its policies on antitrust enforcement. For more than thirty years Washington has allowed corporate mergers and acquisitions to take place largely unimpeded, to the point where a handful of huge companies dominate market after market. Most of those behemoths are located in places like New York, San Francisco, Seattle, and LA. And most startups today, especially in the technology fields, never expect to grow their companies, but instead hope to get bought out by one of the big boys. This makes for a useful “exit strategy” for investors. But it also leads to less competition: startups seldom get big enough to challenge the incumbents. And it means that smaller cities like St. Louis that have painstakingly nurtured startups are likely to see most of them skip town after getting gobbled up by the Googles, Facebooks, and Pfizers of the world. In that scenario, instead of competing in the big leagues, St. Louis would become an uncompensated farm team for San Francisco and Boston.

This is the world today as we find it. But it is not necessarily the one that entrepreneurs would prefer. Asked if he expects Cofactor Genomics to be acquired, Glasscock replies, “Interesting question. That’s been the thinking of our board from the beginning.” On the other hand, he says, he loves living in St. Louis (he’s originally from Arizona), loves the corporate culture he and his colleagues have created, loves the challenge of steering the ship. “I can definitely imagine us having 500 employees ten years from now,” he says, with a noticeable twinkle in his eye.

Dane Stangler is vice president of research and policy at the Ewing Marion Kauffman Foundation. Colin Tomkins-Bergh is a research analyst for the foundation.

Courtesy Dane Stangler and Colin Tomkins-Bergh

Jan 31

St. Louis is the New Startup Frontier

In 2013, when I was a reporter for The Wall Street Journal, I flew to St. Louis to learn about the city’s budding startup scene. The city, like the rest of the U.S., was stuck in a decades-long entrepreneurial slump that had left its economy dependent on a handful of big, staid corporations — corporations that were pulling up stakes to head overseas at a rate that alarmed local leaders. (The city’s iconic brewer, Anheuser-Busch, had been sold to a Belgian conglomerate five years earlier.) But an informal coalition of local business leaders, wealthy investors and ambitious 20-somethings weretrying to spark an entrepreneurial revival in the Arch City. They had launched a fund to invest in local ventures, created entrepreneurship clubs at local universities, and converted part of a massive downtown office building into an unlikely startup hub.

I was impressed by the group’s enthusiasm but skeptical of its prospects. Countless cities had tried similar strategies — “incubators,” “accelerators,” venture funds, tax breaks — in an effort to capture some of Silicon Valley’s elusive magic. Few had succeeded.

But maybe my skepticism was misplaced. Data from the Census Bureau released last week showed that in 2014, 9.7 percent of the businesses in the St. Louis metro area were startups less than a year old, up three percentage points from 2009. Only Elizabethtown, Kentucky, saw a bigger increase during that period. In just five years, St. Louis rolled back 15 years of decline in its local startup rate.

The news is grimmer in the country as a whole. The national startup rate fell in 2014 for the second straight year, to 8 percent. The rate at which Americans start businesses has been falling for more than three decades, and while the decline has slowed in recent years, it has shown no sign of reversing. The trend worries economists because new businesses play a vital role in creating jobs, improving productivity and spurring economic growth; some researchers believe the decline in entrepreneurship, and in other measures of economic dynamism such as labor mobility, could be part of the reason the U.S. has experienced such a slow bounceback from the past two recessions.

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Over the long term, the decline in entrepreneurship has been strikingly universal, cutting across industries and regions. But as the St. Louis example shows, some areas are seeing signs of progress. From 2009 to 2014, the startup rate rose in about a third of U.S. metro areas and 12 of the 50 states, with Missouri leading the way. Three of the five most-improved cities were in Missouri — St. Louis, Springfield and St. Joseph — and Kansas City was number 12.

NEW BUSINESSES IN 2014
METRO AREA TOTAL SHARE OF ALL BUSINESSES CHANGE IN SHARE SINCE 2009
1 Elizabethtown, KY 179 9.0% +4.3
2 St. Louis, MO-IL 4,876 9.7 +3.0
3 Bowling Green, KY 217 9.1 +2.5
4 Springfield, MO 826 9.6 +2.0
5 St. Joseph, MO-KS 171 7.5 +1.8
6 Odessa, TX 220 7.5 +1.5
7 Victoria, TX 145 6.1 +1.3
8 Manhattan, KS 132 6.1 +1.3
9 Tallahassee, FL 528 7.9 +1.2
10 Bismarck, ND 224 7.3 +1.2
11 San Angelo, TX 180 8.0 +1.2
12 Kansas City, MO-KS 3,027 8.4 +1.1
13 Redding, CA 203 6.2 +1.1
14 Lexington-Fayette, KY 681 7.5 +1.1
15 Columbus, IN 71 4.9 +1.1
16 Naples-Marco Island, FL 834 9.9 +0.9
17 Burlington-South Burlington, VT 341 6.5 +0.9
18 Pine Bluff, AR 67 5.1 +0.9
19 State College, PA 152 5.9 +0.9
20 Racine, WI 178 5.7 +0.9
Metro areas with fastest-growing rate of new startups, 2014

New businesses are less than one year old.

On the one hand, it isn’t surprising to see Missouri making progress. Both the state’s public and private sectors have been unusually aggressive in promoting entrepreneurship. The state has its own investment fund, theMissouri Technology Corporation, which invests in local businesses; the fund, together with newly formed private investment groups, have helped the state emerge as a regional leader in startup financing. The Kauffman Foundation — a prominent nonprofit that researches and promotes entrepreneurship — is based in Kansas City.

But it’s hard to know whether those efforts — or those of local boosters in St. Louis — are what’s making a difference. That’s partly because the limited data on entrepreneurship makes it hard to study the impact of government policies. Reliable data on business creation and destruction, even at the national level, has only been available for the past few years; until relatively recently, economists didn’t even know that the startup rate was declining. Even now, the measures are crude, making it hard to distinguish a fast-growing startup from a local mom-and-pop store.

Our knowledge is improving, however. Earlier this month, the Census Bureau, in a joint effort with the Kauffman Foundation, released the firstAnnual Survey of Entrepreneurs, which provides new information on America’s businesses and the people who found them. The report’s most valuable insights will come in future years, as trends become clear, but even the first year’s data contains interesting nuggets. For example, by far the largest share of new businesses in Missouri — nearly a third — are in health care, an area the state has actively promoted. Also interesting: Women own a higher share of startups in Missouri than in any other state. That could be a hint that one way to help turn America’s entrepreneurial slump around is to help more women to start businesses.

“What we’re seeing is a lot more gender and ethnic diversity in our newer businesses than we had in our older businesses,” Secretary of Commerce Penny Pritzker, herself a former entrepreneur, said in an interview. “This is the kind of information that is really vital for policymakers.” Armed with better data, perhaps leaders in both the public and private sectors will at last crack the code for promoting entrepreneurship — and reverse the startup slump in the process.

Hunger in America

Here’s some welcome news: Fewer Americans, and particularly fewer children, are going hungry. According to data released by the Agriculture Department this week, 15.8 million U.S. households, or 12.7 percent, experienced “food insecurity” at some point in 2015, meaning their access to food was limited by financial or other constraints. That’s a big improvement from 2014, when 14 percent of households were food insecure, and from 2011, when the food insecurity rate neared 15 percent in the wake of the Great Recession. The share of households that experienced actual hunger — what the government calls “very low food security” — fell too, though not quite as quickly. Children went hungry in 274,000 households at some point during the year.

Hunger rose during the recession and has been slow to decline in the recovery. The issue has at times become a political cudgel — just Google “Obama” and “food stamps,” or, better yet, don’t — but this week’s report shows the pace of improvement is finally starting to accelerate. That’s just the latest sign that with unemployment falling below 5 percent, the economic recovery is starting to reach some of the most vulnerable American households.

Slower growth

The jobs report earlier this month showed that U.S. employers added 151,000 jobs in August, a solid though somewhat disappointing number. But on Wednesday, the Bureau of Labor Statistics said that pretty much all of those jobs will effectively disappear from the data when it revises its numbers early next year.

Hold on, Jack Welch, don’t go trumpeting any conspiracy theories quite yet. The announcement was part of a standard annual process of “benchmark revisions.” The monthly jobs figures are based on a survey of businesses, which is the only way to make estimates available in a timely manner. But the government also collects a much more precise count of the jobs in the economy via state unemployment insurance records. Every year, it reconciles the survey-based numbers with the more reliable unemployment records and makes whatever adjustments are necessary.

This year’s adjustment is relatively small by historical standards. According to a preliminary estimate from the BLS, there were 150,000 fewer jobs in the U.S. as of March than previously believed. That’s a downward revision of 0.1 percent, smaller than the 0.3 percent average adjustment over the past decade and much too small to change our understanding of how the economy as a whole is doing. By far the biggest revision, on a percentage basis, came in the mining sector, which isn’t surprising; the oil and gas industry, which is part of the mining sector, has been extremely volatile in the past year due to tumbling oil prices. That kind of volatility can be hard to track in real time.

The week ahead

Hiring is up and unemployment is down, but as of 2014, Americans still weren’t making any more money: Median household income has beenessentially flat since the recession ended in 2009. This week, we’ll learn whether 2015 was the year that finally began to change. On Tuesday, the Census Bureau will release its annual report on income and poverty in the U.S. and the individual states.

It’s likely the report will show at least some increase in household income in 2015. Sentier Research, a private firm working with publicly available government data, estimates median incomes began to rise in mid-2014 and are now essentially back to where they when the recession began nearly nine years ago, after adjusting for inflation. Even if Sentier is right, however, it is unlikely that the poverty rate is anywhere close to its prerecession level. The U.S. poverty rate was 14.8 percent in 2014, up from 12.5 percent in 2007.

Elsewhere

Scott Patterson, John W. Miller and Chuin-Wei Yap of The Wall Street Journal tell the remarkable tale of a Chinese billionaire who stockpiled 77 billion beer cans’ worth of aluminum in the Mexican desert.

Inequality is up in the U.S. — that’s well-known. But the picture looks different from one state to the next. Quoctrung Bui of The New York Times charts the trends and finds some interesting patterns.

State and local governments aren’t the only ones that spend public dollars to build private sports stadiums — the federal government does, too. And it’s every bit as bad an idea as it sounds, according to new research from Ted Gayer, Austin J. Drukker and Alexander K. Gold of the Brookings Institution.

Derek Thompson of The Atlantic interviews Economist columnist Ryan Avent about his new book on how technology is reshaping the global labor force.

Article courtesy of Ben Casselman at FiveThirtyEight, see the original story here.

Jan 31

The Right Way to Build a Tech City

Startups should know what differentiates their product from others. Building around an unique strength, a facet that’s difficult to emulate, offers small companies a chance to gain critical mass. New companies should focus on a strength and own one particular piece of their market. Startups that fail to do this can quickly become commodities.

The same can be said for cities and regions looking to make themselves into destinations for tech. Simply trying to emulate the Bay Area and its vast net of tech-related disciplines makes for an impossible task. As I wrote about Chicago and its tech ecosystem recently, there’s more to getting true traction than simply giving startups places to work. Just as a startup needs to do one thing exceedingly well before it tackles other missions, cities should take the same tack and concentrate on one sector of tech to make their own.

I recently was in St. Louis and, while there, I talked to some of its VCs, startups and people who run its incubator and accelerator spaces. Just like anywhere, there exist startups doing all sorts of things in the St. Louis area, but many of the most interesting companies have coalesced around the bioscience space. This isn’t by chance. The city’s tech players have seized on some of the area’s inherent strengths in healthcare and biotech. Washington University, which has one of the top medical schools in the country, is constantly throwing off ideas and graduates who have new ideas in the space. DuPont’s bioscience arm is based here, as is Monsanto, the king of engineered macro-crops. And perhaps most important in all of this, St. Louis was the site of a major set of layoffs by Pfizer in 2010.

St. Louis' Biogenerator Labs and accelerator. Courtesy: Biogenerator.

St. Louis’ Biogenerator Labs and accelerator. Courtesy: Biogenerator.

 While the prospect of one of the leading pharma companies in the world cutting 600 well-paying jobs—those belonging to Ph.D.s and researchers—might seem dismal, it proved to be a fire-starter for St. Louis. It’s rare that so much ready talent gets dumped into a single job market at once. Eric Gulve, the president of Biogenerator, a unique incubator focused on biotech in St. Louis, saw opportunity and hazard in Pfizer’s layoffs.

The hazard: If the St. Louis community couldn’t find jobs for these people, they would be forced to leave the area, depriving the metro of elite brains that Midwestern cities like St. Louis can sometimes struggle to attract. The opportunity, as Gulve saw it: “These people had been in biotech for years and had great ideas, far better than first-time entrepreneurs coming from outside the industry.”

Gulve asked Pfizer if, before the last day of work, he could come in and present to employees about what working a startup is like and what the landscape was like for funding and founders. Pfizer, which wanted to find new roles for its employees as much as Gulve did, said yes. Gulve came in and gave his presentation to Pfizer employees on-site, and then took five in-person meetings the same day. Biogenerator ended up funding four groups from those meetings, one of which turned into Confluence Life Sciences, which now employs 35 in St. Louis.

At the same time, Gulve was hustling to complete a new building and set of labs for Biogenerator. He wanted it ready to catch some fo the fallout of the Pfizer layoffs. A pilot set of labs opened in the fall of 2010, just a few months after Pfizer made its cuts. The 5,600-square-feet of space was filled within 18 months. Biogenerator used that success to raise a total of $145 million and fund 54 companies that have attracted another $250 million in outside capital. The incubator, part of the Cortex Innovation Community, has also added another 12,400 square feet of lab space.

“If you have layoffs in a city and you don’t have this kind of infrastructure in place, you’re not able to take advantage,” explains David Smoller, a partner at St. Louis’ Cultivation Capital who holds a Ph.D. in molecular biology and has been part of several biotech exits. “A lot of the best intellect in the area is now at these biotech startups.”

The lab space is free for Biogenerator companies—and many of them stay there for years after their initial funding, even after finding traction and hiring a significant number of employees. Lab equipment—stuff like mass spectrometers and automated robotic arms for preparing large numbers of samples—is expensive. Small companies can’t afford to finance a lab all their own—but they also don’t need the lab every hour of the day. This allows several startups to easily share the same lab equipment. It’s a unique infrastructure for rearing biotech companies for which St. Louis has found a niche.

The city may have a chance to repeat the feat with 2,600 global layoffs just announced at Monsanto. It’s unclear where exactly those job cuts will take place around the world, but it’s likely that a few hundred will be in St. Louis. “Hopefully a subset of those people won’t want to retire,” says Sam Fiorello, chief operating officer of the Donald Danforth Plant Science Center. “They know the ag space in and out and we need to be ready to provide them support.”

Danforth has multiple missions, including the pursuit of agricultural solutions to mitigate hunger and disease across the world, but it’s also one the U.S. hubs for new companies focusing on the ag tech space. With labs, office space, mentors and a complete talent network, companies here can stay focused on their product.

Experimental plants being reared at the Danforth Center.

Experimental plants being reared at the Danforth Plant Science Center in St. Louis.

Fiorello, who was the chief of staff for Henrik Verfaillie when the latter was Monsanto’s CEO, has been grinding to create a complete program for nurturing ag tech companies and, just as important, a base of employees who can easily be plugged into growing ag ventures. “You can’t just build lab space and expect people to come,” he says. “It’s not a real estate play.”

The biggest pain point for Danforth’s companies has been finding skilled workers for the lab. To that end, Fiorello has worked with St. Louis Community College to create a plant science training program that now boasts a 98% job placement—the remaining 2% go on to get bachelor’s degrees. Danforth, now with two buildings and attracing ag-tech from around the world—including multinational companies from Germany and Israel—now houses 575 people with an addition on its main building that will make room for another 100.

The next project for Fiorello is yet another new building for Danforth that can help him catch Monsanto refugees. One company already using Danforth’s resources, Arvegenix, was founded by three former Monsanto employees who are developing hearty strains of Pennycress, a winter annual plant, as a revenue crop for during what’s normally a dormant period for North American farmers. The plant will provide animal feed as well as oil that can be used in biofuels. Arvigenix has raised $9 million and is now using the core lab at Danforth to develop its seed. Arvegenix has set up shop in St. Louis’ Helix Center biotech incubator, yet another local platform aimed at the space.

St. Louis, like Chicago, has a lot of work left to achieve its goals as a destination and long-term home for tech, but it has made the shrewd choice of identifying sectors where its infrastructure and intellectual capital already had a head start.

Article is courtesy Christoper Steiner at Forbes.com. See the original article here.

 

Jan 30

Stadia Ventures Announces Move into Cortex Innovation District

Stadia Ventures, the two-year-old sports-focused business development firm and accelerator that helps early stage sports startups connect with investors, brands and teams, today announced it is moving its headquarters into the CIC@4240 building in the Cortex Innovation District next month. Since Stadia started in 2015, its headquarters have been located in T-REX downtown.

“We’re thrilled to move into the Cortex district inside CIC and further engrain Stadia in the growing St. Louis startup ecosystem,” said Art Chou, Stadia Ventures co-founder and Managing Director. “T-REX and CIC play vital roles in the entrepreneurial ecosystem and we look forward to continuing to support both facilities, holding events such as our Spring 2017 Finalist Pitch Day event  at T-REX in late February.”

T-REX, which plays hosts to over a dozen entrepreneur support organizations, has been home to almost all of St. Louis’ startup accelerator programs. Prosper Women Entrpreneurs Startup Accelerator, SixThirty and SixThirty Cyber accelerators and the Purina PetCare Innovation Prize are based in T-REX, with the Yield Lab accelerator also having a T-REX office. Capital Innovators, previously headquartered in T-REX, moved to CIC@4240 in 2016 as part of a partnership with Maritz, Inc.

Tim Hayden and Art Chou of Stadia Ventures
Tim Hayden and Art Chou of Stadia Ventures

Stadia Ventures focuses on fostering connections between startups and its partners in the $150 billion sports business market including the St. Louis Cardinals, St. Louis Blues, ESPN, CBS Sports, Rawlings, Wilson, Dick’s Sporting Goods, Under Armour, the San Francisco 49ers, the Jacksonville Jaguars, the Philadelphia 76ers and others. Stadia just completed its third cohort.

“The Stadia Accelerator has been a game changer for our business,” said Joe Shuchat, founder and president of Winning Identity, a Stadia Ventures portfolio company and accelerator graduate. “The guest speakers they’ve brought in have been world class industry leaders. The advisory team has put us in a position to take our business to the next level.”

Jan 26

New Residential Infill Nears Completion in Old North St. Louis (1323 Monroe)

A three townhome project at 1323-39 Monroe Street in Old North St. Louis is nearing completion. The 3BD, 2.5BA homes are listed for $155K by Rome West Realty. The three corner lots are three blocks south of the 14th Street project and Crown Candy Kitchen, the urban center of Old North. The neighborhood saw an incredible 27.7% population increase, gaining 416 residents from 2000 to 2010.However, momentum then slowed as the economy faltered, and the big idea, the $4B, 1,500-acre NorthSide Regeneration plan immediately to the neighborhood’s west, never got off the ground.

However, momentum then slowed as the economy faltered, and the big idea, the $4B, 1,500-acre NorthSide Regeneration plan immediately to the neighborhood’s west, never got off the ground. Now two-thirds of the way through this decade, the $2B NGA headquarters project and planned or hoped-for nearby development may return growth to the area. In the meantime, project like this one offer an affordable option and quality infill to an area with high vacancy.

All photographs via Matt Fernandez. Renderings via Rome West Realty.

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Jan 25

Historic Gratiot School Transformation to 22 Apartments Moving Quickly

The historic Gratiot School at 1615 Hampton Avenue near Manchester Avenue is undergoing a conversion to apartments by Garcia Properties, which purchased the vacant school from the district for a reported $414,700. The building closed in 2013 after having served as home to the St. Louis Public School archives since 1992.

The 27,474 sf school dates from 1882 with additions in 1899 and 1919 and is quite a bit smaller than other former school buildings that have been converted to apartments in recent years. The building will accommodate 22 apartments. Having been used to store archives, the building was in decent condition when sold to Garcia. As of this post, new windows had been installed on the north side of the building (see image below).

Though the school appears rather cohesive architecturally, the center section predates the rest of the structure by several decades. From the National Register of Historic Places:

The east elevation is eleven bays wide, the two-story building has red brick masonry bearing walls laid in common bond resting on a raised, split-faced random ashlar limestone basement. The center section of the building is the original 1882 schoolhouse designed by H. William Kirchner.

The north and south wings of the east elevation are identical in form although they were constructed at two different times. Both wings were probably designed in concept by William B. Ittner c. 1899 although the plans for the southern addition bear Rockwell Milligan’s name. The northern wing was constructed in 1899 under Ittner’s direction. The southern wing was constructed in 1919 under the direction of Ittner’s successor Rockwell Milligan.

[Read Gratiot School National Register of Historic Places nomination]

Gratiot School c. 1882:

Gratiot School and floor plans c. 1935:

Photographs from late 2015 by Andrew Weil for the National Register of Historic Places Registration Form:

Images from Google Streetview and Google Earth:

Images from Paul Sableman via Flickr:

Image by 24th Ward alderman Scott Ogilvie (1/23/2017):

Jan 25

Dabble Is Here To Help You Play With Your Curiosity

“Dabble was founded on the idea that everyone has interests, skills and passions and we all long to connect,” says Dabble CEO and Chief Dabbler, Jay Swoboda. After all, it seems like most people today are too busy with work to cultivate after-hours interests (they’re lucky if they squeak in a trip to the gym), much less “dabble” with a few to find one they love—or just play with their curiosity.

Dabble, an “event marketing technology and interest discovery platform,” aims to change this by connecting “curiosity with passion in local communities,” says Swoboda. “We believe that learning doesn’t need to happen in a classroom, can be “fun” and that anyone can teach, learn or host.”

Erin Hopmann and Jess Lybeck founded the company in May 2011: As “young professionals in a big city, they found it hard to just “dabble” in their interests, try new things and meet new people rather than committing to often expensive, multi-session classes,” says Swoboda.

Jay Swoboda
Jay Swoboda, CEO of Dabble

Originally, both had quit their day jobs to launch a marketing and branding company that would focus on small businesses and entrepreneurs, Swoboda says. “One thing that seemed to be a common denominator was that everyone needed more customers, and that many talented people needed support sharing their passion and skills. Over and over, it seemed that events, classes and workshops were an incredible way to find new, loyal customers.” 

The founders drew on sites like Skillshare.com andLearnapalooza.com for early inspiration and began building the first website on WordPress for what would eventually become Dabble.” After attracting their first teacher partners they launched with 18 classes and bootstrapped for a year before raising funding and moving the platform to a Ruby on Rails site in late 2012,” says Swoboda. 

Hopmann and Lybeck built the company for three years “before handing the reins over to the new team when resources ran out,” says Swoboda. Today, he says “they remain some of our biggest cheerleaders.”

A Rollercoaster of a Ride 

Dabble’s ride hasn’t always been an easy one: It’s “grown and scaled back many times over its five-plus year existence to make ends meet,” says Swoboda.

Dabble laid off “just about everyone in September 2013,” says Swoboda. “The company was very close to going under, but the idea is just too good to die and has proven resilient against the odds.”

Dabble
A Dabbler takes a woodworking class

During that time, they launched a website that would deeply resonate with the startup community. “When Dabble was considering what to do in the fall of 2013, the founders launched a website that struggling entrepreneurs still read today called “30 Days of Honesty” that documented the founders’ journey as they struggled to keep Dabble alive,” says Swoboda. “The resulting response and surge of energy from the community as a result of their candor and transparency very likely saved Dabble.”

They’ve carried on that spirit in their current operations. “It is this same transparency and honesty that we embody every day in how we operate Dabble with our team and our community,” says Swoboda. “Running a startup is hard. Really hard—even with funding—but without funding it’s like having your kneecaps slammed with a sledgehammer if you’re not honest with yourself and your customers.”

Since 2013’s hard times, they’ve seen support come in from some significant sources: They won an Arch Grant in 2014 and followed it up with participation in Capital Innovators Spring 2015 cohort, which “was very instrumental in the rebirth and continued existence of Dabble.”

“Over the years, we’ve learned that even without funding and money in the bank, a good idea can survive,” says Swoboda. “We exist today because of the strength of our teachers and hosts and the willingness to keep working–despite a lack of financial resources–to provide a platform where over 75,000 people can explore their interests, try new things, meet new people and build their own brands by offering events on the platform.”

Even last year saw big changes: “Earlier in 2016, we had 10 staff members and our own office in the River North area of downtown Chicago. Now, we have four distributed full-time staff with over 28 part-time company ambassadors supporting 4,000-plus teachers and hosts who list on the platform in the US.”

No longer in the River North office, the team members work out of Soho House in Chicago, and they’ve created an office culture that’s lively and vibrant. “We make an effort to make each other crack up throughout the day through frequent GIFs and passive-aggressive fake support emails we take turns fighting the urge to send,” Swoboda says. 

They’re not the only ones in the learning/experience/events space, either:
“The event and experience ticketing space is pretty crowded with some big names like Eventbrite, Meetup, Ticketfly, Ticketmaster and even the relatively recent addition of Airbnb,” says Swoboda. “However, the local event ticketing and marketing space is a bit smaller, led by Chicago-based Groupon. Other competitors like Coursehorse, Vimbly and Zozi have partnered with larger companies or moved to SaaS platforms and don’t seem to directly compete.”

There’s one big competitor out West, though: San Francisco-based Verlocal. They launched a little more than two years ago, says Swoboda, and “raised a bit more funding out of the gates.” Since then, “they’ve grown aggressively to 15-plus US markets, expanded with a handmade marketplace and are pushing local services (hair, nails, etc.) and a social network.” But they’re not where Dabble is: Although they’ve grabbed a lot of the market, they still haven’t been able to crack into Chicago, Denver and St. Louis.

All that aside, Dabble occupies a unique position in its world: By focusing on class and experience ticketing and marketing, they occupy a niche that other companies orbit. “As a result we have the No. 1 spot on Google when it comes to anyone searching for ‘classes’ in Chicago, Denver and St. Louis without having to spend a dime on SEO/SEM,” says Swoboda.

Dabble
A Dabble cocktail course.

Passing the Torch

When Swoboda took over as Chief Dabbler in 2014, he was ready for a challenge. “Growing up without a lot of resources on a working Missouri farm as one of 13 kids will prepare you for just about anything,” he says. “I’ve been financially independent since I was 14 and had started six companies in the nonprofit sector and sustainability space before taking over Dabble in 2014. I’ve learned to be self-sufficient but also to really appreciate the lucky hand I’ve been given.”  

Despite their difficulties, Swoboda sees big things ahead for the company. “Dabble has come a long way over the past five years, but we’ve got a lot of things we can still do and improve upon. I’m incredibly encouraged that we’re growing so well (75% YTD over 2015) with such a limited geographical footprint and a lot of opportunity with our tech.

In December 2016, the company had just listed their 10,000th in-person class or experience, “which truly demonstrates the depth of skill and passion among our teacher network around the US.”

And more funding is coming through: “We raised $1.5 million in equity [in 2016] and $2.25 million to date and are raising a new round to keep growing our monthly revenue beyond the $50,000 per month average to keep growing our community to hit 100,000 users in early 2017,” says Swoboda.

Speaking of the users, who exactly are Dabblers? “It changes from city to city, but the overwhelming demographic of the Dabble user is a 25- to 40-year-old professional woman,” says Swoboda. “They love to explore their city, mix up their routine and even share their skills building their own businesses. Dabble is a tremendous resource for them and they support us in a huge way. They are our best ambassadors for Dabble and push us to continue to improve and bring new experiences to the community.”

What’s Next

If we can secure the resources to keep growing Dabble, we are pushing hard for an expansion across the US through some national partnerships as well as the organic demand for authentic and affordable local experiences,” he says. “We’re building a seamless and simple product for anyone looking to host and promote events anywhere that is more affordable than the competition and, more importantly, tied to data-driven marketing technology to actually market listed events driving revenue and loyal customers.” 

As far as all this means to its users: “I believe that Dabble can become the de facto site for monetizing your side hustle and finding cool things to try in your local community,” says Swoboda. “My search for someone to teach me how to build an oak cask and to learn to plaster led me to Dabble. What can it lead you to? There is so much knowledge in the world that is not being shared, and I would love for Dabble to be such a repository of skills and knowledge.

Dabble seeks to empower lifelong learning, and I believe such a vision can inspire millions of people to share their skills and break up their routine through one-time classes and experiences.”

Part of the platform is bringing the local aspect to a globalized world, where it seems like you can learn anything with a quick Google search. “There is inherently a very local network effect required for Dabble to flourish on a global scale, but through my travels and our team’s work, we’re making the world more local every day empowering human connection through Dabble experiences,” says Swoboda.