CEO Insights: Ramping Up Tech Entrepreneurs

How do you increase the success rate for technology entrepreneurs in our region? You accelerate them by giving them a place to move from launch to growth, which is exactly what the new regional business accelerator in downtown Roanoke plans to do. Having an incubator as a place for entrepreneurs to get support and launch their company is just the beginning. An accelerator is an altogether different idea and those businesses that make it to the finish line, have a much better chance at success.

Last year, Roanoke received a grant to turn the old Gill Memorial Hospital building on South Jefferson Street downtown into a “technology accelerator”. With an expected completion date of December 2016, The Roanoke-Blacksburg Technology Council (RBTC), City of Roanoke, Virginia Western Community College, and other key advisors are coming together to create the Regional Acceleration and Mentoring Program, or RAMP. This highly-focused acceleration program will evaluate entrepreneur applicants, favor those who intend to stay in the region, and select three to five technology companies per year for an intensive three-to-four-month structured mentoring “boot camp” designed to build, test, improve, and speed to market a company’s product. The RAMP Accelerator fulfills several conditions for not only technology entrepreneurship, but also improvement of the entire Roanoke-Blacksburg innovation ecosystem.

The goal of an accelerator is rapid growth, but also to sort out all of the operational and other strategic challenges for a business and make them “investor ready”. Businesses may fail or stagnate, but do so sooner in an accelerator program, and they’re able to change their trajectory faster and learn more quickly how to be a successful company. According to the Brookings Institute, accelerators differ from incubators and other ecosystem players because they’re fixed term, cohort-based, mentor-driven, and culminate in a graduation or demo day. Incubators lack the expedience to launch businesses and carry many under-performing companies for years. What makes accelerators so valuable and desirable to startups? Brookings found that accelerators offer the kind of immersive and focused education that all founders eventually learn, but the accelerator program speeds up the learning cycle. The RAMP Accelerator is designed to do the same and bypass the years it may take to launch a successful business to stand on its own.

“Business acceleration” is a growing trend in the commonwealth tied to technology startups and the hopes of sparking Virginia’s innovation economy. With the highest density of technology professionals of any state, it makes sense to allow a venue where ideas can be heard and supported, both financially and with mentorship. Since 2005, the number of accelerators has grown to almost 200 in the U.S. with 50 percent growth year-to-year between 2005 and 2014. Companies like AirBnB, DropBox, and Reddit are just a few well-known accelerator graduate names. In our region, we have seen a number of technology companies leave for accelerator programs elsewhere. The goal of RAMP is to keep our local technology entrepreneurs here by offering them the access to mentors and other valuable resources they so desperately need.

An active accelerator concentrates a lot of activity in a community in one place – generating vibrancy around innovation, and giving various ecosystem actors exposure to one another in a dynamic environment. Basically, wherever there is a collection of innovative startups, there’s typically an accelerator backing them up. Brookings also found that in cities where an accelerator is established, the city typically has more seed and early-stage entrepreneurial financing activity, even for non-accelerator companies, and more venture capital to the regional economy in general. Attracting venture capital to a region has positive impact on broader employment growth and entrepreneurship. Accelerators play a critical role because regardless of the seed financing or venture capital the program graduates can attract, it’s how well they can build a network of support for their peers and future companies, collectively creating more jobs as a result. The future of the technology industry depends on the success of accelerator programs, both in the Roanoke-Blacksburg region and across the commonwealth and nation.

Technology startup hubs like San Francisco-Silicon Valley, Boston-Cambridge, and New York claim 40 percent of the accelerator programs. But good activity is happening in smaller cities like Chattanooga, Cincinnati, Milwaukee, and Boulder. Technology companies not only need seed money, they thrive on the right mix of other high-tech companies, mentors, and graduates in the region. That mix of assets kick starts entrepreneurship and it’s exactly what RAMP intends to pull from for success. The recent Kauffman Foundation Index of Growth Entrepreneurship finds that the five highest ranked metropolitan areas are Washington, D.C., Austin, San Jose, Columbus, and Nashville. Columbus. With a marketing and advertising industry focus, Columbus had a first place rank for share of scale-ups and a fourth place rank in the overall index – the city’s success at entrepreneurial growth is a validation for the region’s startup ecosystem.

If a startup ecosystem is to thrive in the Roanoke-Blacksburg region, the use of effective mentors offered with RAMP will be the start. RBTC intends to elicit the best of our region, specific to startups, to provide sound counsel. The RAMP accelerator will also need to build a culture of entrepreneurship around the accelerator that perpetuates the program for a lifetime. As a highly collaborative initiative among technology mentors, higher education, and government, RAMP is just another way forward to speed up the region’s entrepreneurship rankings, employment, and the overall diversified growth of our economy.

(This post also appeared on the Roanoke Times website)

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