Investors Hold Key to Next Wave of Nashville’s Startup Growth
Guest Blog By Rob Bellenfant
The potential is there. The opportunity exists. Now it’s up to Nashville to step up and grow up as a startup hub.
Steve Case painted a colorful picture for Middle Tennessee’s tech future during his visit earlier this year, praising its emerging startup ecosystem as “stronger and more diverse” than many he’s seen in recent years. Regional groups like the Nashville Entrepreneur Center and Launch Tennessee have helped build an infrastructure that encourages entrepreneurs and fosters startup creation, but they need help from others in the community to grow and sustain it.
“The future of big companies and cities will rest on their willingness to help this next generation of startups. They need to embrace these partnerships and pursue them with gusto, or they’ll risk losing them,” the AOL co-founder said during his Rise of the Rest tour. “There are structural advantages to cities like Nashville, which have a history of manufacturing and have complexity and culture. Now it’s up to the city’s leaders to come together to make Nashville a mecca for startups.”
While city and corporate leaders must continue playing key roles in local startup growth, it’s investors who need to step up the most. The region’s rich culture and low cost of living have proven valuable in convincing big companies to move, but the lack of available capital has been a major factor in forcing emerging companies to bolt. As a result, the structural advantages Case described — like the city’s proud history in healthcare and music — are suddenly facing legitimate challenges from other regions. Tennessee’s health innovators were notably absent from Rock Health’s latest list of the top 50 health IT entrepreneurs, while in-state neighbor Knoxville is making a play at becoming the go-to city for music technology.
“It’s hard to put a band together, a little harder to get into a club, harder still to get signed by a hit record, harder still to have a series of hit records,” Case said, effectively using a music metaphor to describe Nashville’s entrepreneurial journey. “You have to build a brand and a following that spans decades.”
The recently released Inc. 5000 List of America’s Fastest Growing Private Companies proves Nashville continues to build a solid entrepreneurial brand for itself. Nearly two-thirds of Tennessee’s 80 companies on the list — and all four of its representatives on the prestigious Inc. 500 list — are headquartered in Middle Tennessee, while rapidly-growing Williamson County is emerging as a popular tech destination. Brentwood and Franklin are home to more than half of the Nashville area’s 49 Inc. 5000 companies, including Entrada, EHD Technologies, HCTec Partners, and TechnologyAdvice.
Nashville also continues finding new ways to fight one of its biggest sustainability challenges — recruiting and developing a workforce with the skills to lead more tech innovation. Top IT talent has traditionally bypassed or bolted from the South in favor of more lucrative opportunities in Silicon Valley, Boston, and New York. However, recruitment efforts from the Nashville Technology Council and the Nashville Chamber’s WorkIT program, among others, are starting to bridge the gap and develop infrastructure for local training programs. Forbes currently ranks Nashville as the third most creative city in America, while NewGeography ranks it fourth in a list of the country’s new “brainpower” cities (based on where most recent college graduates are settling).
Case spoke at length about the next wave of innovation taking place in the “third wave” of the Internet. Once the Internet was created, the second wave involved building it out through apps and processes. Now, Case says, the Internet’s integration into every aspect of our lives is the next area for tech entrepreneurs to explore.
So, too, must Nashville move forward into the third wave of its entrepreneurial journey. The efforts of many created an infrastructure, which in turn attracted innovative minds and created exciting new startups. Now Nashville must organize a willing base of investors to generate the capital necessary to retain and grow these opportunities. Without it, the Middle Tennessee entrepreneurial community will never fully-develop into the impactful, self-sustaining ecosystem many believe it could be.
Rob Bellenfant is an entrepreneur and investor specializing in IT, sales, marketing, and talent development. He is the founder and CEO of TechnologyAdvice, a Brentwood, Tenn.-based company that helps businesses find the IT solutions that best fit their specific needs.