Tennessee is known as the country western capital of the world. What many may not know is that there is a bubbling tech ecosystem in Memphis that is slowly but surely building up their diverse startup community and churning out some quality startups.
Eric Mathews is the CEO of Start Co, a venture development organization in Memphis, is an icon in the city and is dedicated to this long haul of building his community.
This time for the #StartupsEverywhere, series, Eric talks with me about building a diverse founder population, overcoming capital hurdles and the long term ROI when people invest in their community.
What’s your role in your ecosystem?
I am a champion for community and entrepreneurial change and have been working to build the startup ecosystem in Memphis for over a decade. In 2008 I founded Start Co. where I currently serve as CEO.
Can you tell us a little more about what Start Co. does?
Start Co. is a venture development organization that supports early stage, high-tech, high-growth potential startups with business and technical assistance, mentorship, programming, and capital access. This takes the form of community programming like 48 Hour Launches, office hours, and various competitions. We also run a number of mentorship-driven accelerator programs to help teams build sustainable startups. Finally, we provide post-acceleration support for growing startups. Of course, all of this work also entails building a broader ecosystem of support resources for our founders, from professional services to investment capital and more.
What’s the most exciting thing that has happened in Memphis in the past year?
We have seen more Start Co. teams break even and raise significant rounds of capital for scaling up, which is having a positive impact on the broader economy in Memphis. Four startups from our most recent cohort have raised over $1 million in funding. Another one of Start Co.’s 2015 graduates, Front Door, is actively seeking several million in funding to hire additional employees and grow its real estate platform. Overall, Start Co.’s graduate companies have enabled over 250 jobs to be created in our community. Looking ahead, I think we are going to start seeing more significant raises and even greater job creation.
What is the biggest challenge you face in Memphis?
The things that keep me up at night are limited access to later stage capital and the skilled talent necessary for rapidly scaling high-growth startups. These aren’t unique problems necessarily, but they are uniquely challenging to solve in Memphis. Memphis has one of the highest poverty rates in the nation and low educational attainment, and even though our population is very young, it is also more impoverished and less educated compared to peer metro areas. This means that most of our discretionary resources are going towards these more pressing macro issues, rather than entrepreneurial development. However, it is critical that these macro challenges are addressed in order for our ecosystem to be more fruitful. Thankfully many inside and outside of Memphis believe in working on both social impact and the jobs of tomorrow.
What are some of the inputs that have helped your ecosystem grow?
From the very beginning, we made it clear to our partners and investors that there are two types of “ROIs”—returns on investment and returns on involvement—and the only one that we could guarantee at the start was return on involvement. As a result, those who have championed our ecosystem have always understood that ecosystem growth takes time and that they had to look at the long road for a return on their support.
I think of it as a 20…