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Illustration by Timothy Cook
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Larkin Garbee, founder of co-working space 804RVA
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Photo by Jay Paul
Knox Payments co-founders Tommy Nicholas (second from right) and Thomas Eide (right)
It’s a sunny Friday in January, and a slushy white blanket from a winter snowstorm surrounds Pho So 1, a West End Vietnamese restaurant where entrepreneur Rob Forrest orders up a piping-hot bowl of pho, a brothy noodle soup. Bespectacled, clean-shaven and affable, Forrest should have been your college roommate during freshman year. He eats with gusto and is full of praise for the pho’s earthy richness.
Forrest is also a food lover whose big idea several years ago, hatched with three other partners, was to help restaurant owners scrub harsh dining reviews from the Internet. In his opinion, negative feedback posted online is more constructive when restaurant owners are the only ones who get to read it. That idea morphed into the tech startup called Speakeasy, which Forrest and his partners launched in 2012 as an alternative to the popular review site Yelp, known for brutal criticism aired openly by commenters.
The Speakeasy concept seemed perfectly timed, just as the Richmond region’s food scene was enjoying a crescendo of entrepreneurial activity and national media attention.
The company’s first signs of promise had come early, when EAT Restaurant Partners, owners of popular local restaurants such as the Blue Goat and Fat Dragon, signed on to use the service, enabling Speakeasy to see it in action.
Then, in April 2013, the company scored a blast of exposure and money. By winning the 2nd Annual i.e.* Startup Competition — an effort of the Greater Richmond Chamber of Commerce to spotlight local innovation — Speakeasy received a $10,000 prize and six months rent-free in the offices of venture-capital firm New Richmond Ventures.
An investment deal seemed inevitable for the startup. But now, more than a year later, no serious investors have stepped forward, leaving Forrest and his team with nowhere to go. After everything seemed to be moving in the right direction for the company, just why did Speakeasy stall?
Searching for an answer, Forrest hovers over his bowl of pho and furrows his brow. In an attempt to illustrate the difficulties of drawing investment to Richmond’s startup culture, he stumbles through one metaphor after another.
“Someone sees a $100 bill on the ground, and the guy next to him says, ‘That’s impossible, because someone else would’ve picked it up already.’ ” This is Forrest’s way of explaining how some local investors will blatantly ignore a viable business idea — there’s an expectation for startups to be self-sufficient, he says.
Even when local leaders and economic boosters tout Richmond as a melting pot for innovation and creativity, big new ideas based on computer code often have a hard time competing with more tangible ventures. Speakeasy was designed to reach a large audience. Scaling up would produce the best results — more reach and more feedback from diners. It needed an investor to believe in that wager. Instead, the service remains in limbo. That’s a deadly place for ambitious startups that have already received a quick shot of publicity. To the risk-averse Richmond investor, a maker of premium shirts with a storefront and an online store may be a better bet than an online service whose best work exists in some sort of “cloud.”
It was six months into his company’s limbo when Forrest sat with a Richmond magazine writer in Pho So 1. As the lunch crowd started to thin out, Forrest — already a low-key personality — grew quiet. His big bowl of pho was empty. With the sense of “what if” hanging in the air, he took a sweeping look around the empty room before making an exit.Importing Success?At the same time Speakeasy won the honor of the Region’s Next Best Start-Up in early 2013, several other events occurred that signal the desire (and maybe even desperation) of Richmond-area leaders to become a thriving, hot location for talented, job-hungry millennials, the tech-savvy generation under the age of 35.
First, a group called Richmond’s Future — with a deep roster of the region’s power players — reported results from a study involving 3,500 millennials. The report, unsurprisingly, tied the long-term economic future of American cities to the retention of young talent. According to the report, the No. 1 amenity drawing millennials to a city is a vibrant local food scene — an area where Richmond scores high.
It’s also not a surprise that the respondents noted innovative jobs, in particular, as another point of attraction. College students surveyed for the report said they see few options in Richmond. More than half of the respondents already working in the city also believe it would be easier to start a business elsewhere.
The results dovetail, highlighting the critical relationship between a region’s culture and economy: Those who want knowledge-driven jobs are likely to exchange knowledge at a hip eatery.
The study’s release came just ahead of the second event, in May 2013, when a group of Richmond-area leaders and economic boosters, descended on Denver, Colorado, in search of the future.
The three-day InterCity Visit, organized by the Greater Richmond Chamber of Commerce, was one in a series of annual fact-finding missions designed to import cultural and economic concepts from other successful regions. Joining the delegation of 150 visitors were Mayor Dwight Jones and members of his administration, as well as grocery and banking magnate Jim Ukrop.
On the group’s agenda was a visit to a co-working space in Denver called Galvanize. Housed in an old bank note building, Gal-vanize is aggressively turning the city’s historic Golden Triangle district into a youthful destination. Inside, a full-fledged café serves craft beer and creative dishes.
On its website, Galvanize beckons digital entrepreneurs and tech startups by noting, “Entrepreneurship can be lonely. Welcome home.” And it exhorts its members to “Co-learn. Co-create. Go!”
Successes stemming from Galvanize, which has four Denver locations, include Forkly, a smartphone app for food reviews.
Over lunch at an Asian bistro, which he also founded, Galvanize’s techie CEO Jim Deters explained to his Richmond visitors how older generations of business people connect with millennials — largely by providing capital and a community that will keep them from leaving. The InterCity Visit’s purpose reflects one of the most contentious issues between grassroots entrepreneurs and established institutions. Can you transplant a good idea?
Chamber CEO Kim Scheeler says it’s not possible to predict what could be the “next big thing” in Richmond. “At this point, no one’s trying to own the startup scene,” he says. “An entrepreneur is not for me to define.” He believes it’s smart, then, to find out what works and what doesn’t in other cities. Richmond’s strategy, he explains, should not be simply to copy an idea. Rather, it’s more about noticing how others are integrating innovation into an urban landscape and culture.
Enter Peter Chapman, Richmond’s deputy chief administrative officer of economic development and planning. Before coming here, Chapman previously served as economic policy director for Denver from 2003 to 2007. “Denver has a formula for attracting millennials: tolerance, talent and technology,” he says. “Some of these ideas you can easily transplant, some you can’t. Some of it happens organically. Some of it happens through investment.”
The most important thing, Chapman believes, is to create a sense of innovative culture. “Certainly, Richmond has the talent and the intellectual capital — maybe not yet the kind of capital that allows you to dramatically scale up.”
Before the Galvanize visit was over, Deters suggested to his visitors that they read a book called “Startup Communities,” written by Deters’ friend Brad Feld, another influential Colorado entrepreneur. Coincidentally, at that moment, the same book was on the shelves at a much smaller, fledgling version of Galvanize not two miles from Richmond City Hall and the Greater Richmond Chamber of Commerce.Closer to HomeTwo blocks away from the Robert E. Lee statue on Monument Avenue is where you might find the most immediate contrast between the history for which Richmond is best known and the future its leaders want to embrace.
804RVA, on the corner of West Broad Street and Allen Avenue, is a coworking hub, one of several in the city, where the founders of small tech startups brainstorm alongside other types of entrepreneurs. Even though it’s a straight shot from City Hall, it wasn’t until late May that Jones and other local leaders made a visit here as they did to Galvanize, nearly 1,700 miles away, the year before. (They attended an event at 804RVA organized by Virginia Sen. Mark Warner.)
804RVA’s mission is to transform Richmond by nurturing collaboration and innovation. The first thing you notice walking through the door is creative chaos — laptops scattered everywhere, mostly MacBooks, not all of which are attended to. Local coffee and beer are on hand. Denim is the rule.
It seems loose, yet the majority is working intensely. Someone is bound to greet you, and most of the time that person is Larkin Garbee, the space’s founder.
Garbee is something of a maverick. She’s charismatic and speaks enthusiastically about multiple projects she has on the burners. She’s full of determination, too. When her idea for a co-working space failed to win Richmond’s startup competition, she moved forward with 804RVA anyway. Now she consults with several startups — including Speakeasy, before it lost out on an investment deal.
“I see large organizations like i.e.* and Venture Richmond as trailblazers, actually,” Garbee says. “They opened up the city’s innovative culture, and even though we’re not replicating their particular vision, we’re realizing Richmond’s potential.”
It’s true that Richmond’s boosters and marketers have put their weight behind the “RVA” brand. Those three letters appear on everything from bumper stickers to pint glasses. The RVA logo was developed at the behest of Venture Richmond in 2010 with the help of the region’s top advertising and marketing minds. It was crafted as an “open-source experiment,” inviting locals to create and express their versions of the brand. However, for all the celebrating of the region’s creativity, Garbee thinks it’s also important to offer a practical path forward. She doesn’t want local startups to get stuck at the idea-generation stage.
In fact, you can find regulars of 804RVA who are skeptical of relentless brainstorming. Taylor Jones is a designer who works with one of Richmond’s most successful startups, Knox Payments. The company, co-founded by Tommy Nicholas and Thomas Eide, wants to make e-commerce safer, more of a one-step process. “If you really believe that you’re developing a world-changing idea, but you spend all your time networking at these events, then you need to be knocked out,” Jones says. “The idea is to be heads down, focused on action.”
Nicholas, a Richmond native, is tall and bed-headed, and appears to have just hustled from somewhere else. He speaks in measured tones about being an ambitious startup. “Raising money in Richmond is next to impossible,” he laments. “We’ve raised $1 million and about $400,000 was from here, but we were very, very fortunate.”
Nicholas and co-founder Eide find plenty of reasons to stay put. They say the price of doing business here is appealing. They also cite Richmond’s talent pool and cost of living. Knox was able to move into a larger office this spring at the Gather co-working space downtown on East Main Street.
Still, promising startups like Knox can get pressure from outside investors to uproot completely, and Nicholas feels that “the city doesn’t really support its entrepreneurs.”“The [best] advice you can get in Rich-mond about scaling a tech startup isn’t even [considered helpful] in San Francisco, and that’s actually become a huge problem already,” Nicholas says. Only weeks earlier in Feb-ruary, Nicholas and Eide’s startup won the “best enterprise” award at the Launch Festival in San Francisco — it came with a $25,000 prize.
Knox would like to avoid failure, even though Silicon Valley seems to embrace that outcome as proof that a company or entrepreneur is battle-tested and has learned valuable lessons for later success. A March article in New York Magazine referred to it as the “Silicon Valley’s failure fetish.” Like some Newtonian law, the devastating impact of a startup company’s failure seems directly proportional to its ambitions.
You can find smaller tech startups at 804RVA who sidestep the desire or need to dramatically scale up. Their homegrown, grassroots approach succeeds on charm and ingenuity — a less frenetic, if less spectacular, startup culture.
To catch a glimpse of these starlets, you have to stick around 804RVA into the night hours. That’s when Garbee hosts a monthly showcase. She usually gets support from friends like Arnold Kim, who directs Mac Rumors, a tech blog that’s popular nationwide and has been spotlighted in national publications.
On this particular March night, around 40 people attend. The evening crowd at 804RVA is mellow, and the local beer on tap gives the space a respectable bar vibe. Appropriately, everyone is waiting for a presentation about drinks, restaurantsand tech.
The four members of Trinkin step up. Zealous hype is somewhat expected during startup demos; sometimes the tone is downright utopian. But the modesty of Trinkin’s presenters is disarming. They all have day jobs, and they just want to help Rich-monders find craft beer.Trinkin.com emphasizes discovery — locating a local lager, for example, paired with dinner specials or or finding an evening beercentric event after attending a daylong festival. Businesses benefit, too, by finding their audience.
Dave Al-Attiyah, the principal accounts manager, says businesses are “the heart and soul” of Trinkin.com. That’s because managers and owners, who pay a subscription fee, must personally update their information every week, if not daily.
Trinkin doesn’t currently have plans to scale up and invest in a smartphone app, which would be expensive. Strategies to go statewide were only recently developed. The service is a labor of love, paid for out of pocket and developed in hiding years before its release.
Garrett Ross, co-founder of product-development company Mobelux, is listening intently. You might call Ross an elder statesman of Richmond’s startup community. In part, he and co-founder Jeff Rock helped attract Tumblr’s support department to the Corrugated Box Building in Manchester, where more than a dozen other startups are based. Tumblr is a freeform blogging service, which Yahoo! bought last spring for $1 billion. This may be as close as Richmond gets to tech celebrity.
Recently, the Mobelux team worked on a project called Elixr. It’s a slick app wholly sustained by users who document local watering holes. Elixr’s first user was drinking a Bud-weiser at a TGI Fridays in India. It might seem self-restricting for Trinkin to remain hyper-local, only publicizing beer offersings. But Trinkin’s bespoke quality might be an asset. It carries a defined identity that’s suggestive of local flavor. With more than 60 clients and 70,000 online visitors from Richmond, Al-Attiyah says Trinkin.com is “no longer a proof of concept — it’s a viable, sustainable business tool.”
The presentation earns Trinkin’s quartet a polite round of applause. Tomorrow, there likely will be no call from Richmond investors. Al-Attiyah seems at ease with that, and pours himself a beer.Pomp and CircumstanceRichmond Chamber CEO Scheeler admits that he hadn’t had a chance to read the book recommended by Deters in Denver. In that book, author Feld outlines the problems any startup community is likely to encounter. Feld is most vocal about the “pomp and circumstance” behind city innovation campaigns. The problem is that entrepreneurs and governments operate in different time zones. The net worth, leadership and focus of a startup can literally change overnight.
Perhaps the hardest struggle is simply agreeing on what a startup is. Eugene Trani, former president of Virginia Commonwealth University and chair of Richmond’s Future, points to local shirt company Ledbury as an example of a successful Richmond startup. Unlike tech startups, though, Ledbury has a brick-and-mortar storefront, where it sells tangible products. Merchants are also unlikely to suddenly change the fundamental nature of their product.
Tech startups are still dependent on ecosystems created by global companies like Google and Apple. They present and collect vast amounts of data in novel ways. They build on top of other industries — dining, for instance. They frequently navigate a two-sided market, where business owners must sign on to a service, and customers must use it.
Some local investors are eager to find a middle ground. “I tossed my golf clubs into the ocean,” says Jim Ukrop. “I’ve decided to learn about things like lean startups, which means that you slowly develop a product, instead of throwing money at a big- picture idea.”
Ukrop says he particularly liked the café inside Galvanize. He wonders about the connection between food and work. “I walk around downtown Richmond and see all the people on laptops in the Urban Farmhouse Café and say — well, isn’t this a co-working space?”
Ukrop is now a partner with New Richmond Ventures, which has consulted with more than 300 companies, including Speakeasy. Only five or six of those companies have been passed along to the venture capital firm’s investor network. That’s a tight market. Is a café really the horizon for young entrepreneurs in Richmond?
“We do need a front door in our community for our startup scene,” Scheeler insists. “Young people want to know what’s possible in a city.”
The Corrugated Box Building, where Mobelux and Tumblr operate, appears to be a hub with a strong gravitational pull for tech-minded talent with ambitions. Yet local business leaders rarely describe that hub in trophy terms, and 804RVA consistently flies under City Hall’s radar.Undeterred, Garbee is attempting to build consensus to transform the abandoned bus depot on Cary Street into an “innovation village,” which would include retail and housing. She’s also excited about potential plans for an “accelerator” in Richmond — a program that will mentor startups and provide entry-level funding. All the while, some Richmonders still buy into the Silicon Valley myth of a tech utopia, when in reality, very few dreams come to fruition there.Joy Liu is an entrepreneur who is grounded in reality. Liu says she’s working on Local Yum as a “proof of concept.” She mostly wants to see if her idea will get up and move around.
In order to build a website, Liu taught herself to write computer code over the 2012 Christmas holidays. “I didn’t really know any programmers when I moved here, and I couldn’t really afford to hire one, so I bought a tutorial,” she says.
In fact, Liu did not really know anyone at all, which inspired the idea for Local Yum. She wanted to organize dinners where you can meet people and exchange ideas. The LocalYum.me site charges a small fee to restaurants that post their events, which users or “yummers” can attend.
It’s interesting to read strategic recommendations made in the study on millennials. Merge food and tech. Create one-stop websites. Help people discover unique dining experiences where they can share ideas. Local Yum, Trinkin, Speakeasy — they pursue these goals, but without the same hype showered on local microbreweries and apparel companies.In a city with a history of underground arts, there’s a bubble gum-and-bailing wire feel to Richmond’s small-scale tech scene.
“Richmond is a very forgiving place. You know, there’s room for failure here,” says Micheal Sparks, a local designer who produces a pop-up dinner series called the Underground Kitchen. “I think Local Yum can do something for this city. We’re entrepreneurs by necessity, not only for reasons of style — we’re reinventing ourselves every day just to keep up.”Adapt or DieSecond chances do exist. Rob Forrest says he’ll still run with the one-on-one customer feedback idea. He plans to “pivot” toward medicine; under the new health insurance law, Medicare will reimburse care providers based on patient satisfaction scores. He may drop the Speakeasy name. That doesn’t erase the sting of rejection, of course.
“You ever have someone keep giving reasons for why they can’t date you?” Joey Figaro asks. He’s the former programmer at Speakeasy. The letters tattooed on his knuckles flash when he strokes his beard. “That’s kind of what it was like with New Richmond Ventures. I felt we were on the runway for so long, waiting to take off — we just ran out of fuel.” Startups like Speakeasy are in the business of making predictions, requiring others to affirm their foresight. They might consider themselves a hot commodity, but they need a hot date with an investor to keep operations running.
Turns out, the dating metaphor is fairly popular in the startup scene. “If you’re desperate, no one wants to date you, yet if you play hard to get … ” says Graham Henshaw, with a raised eyebrow. Henshaw is the partner at New Richmond Ventures who worked closely with Speakeasy. In his view, it’s not enough to find a few esteemed restaurateurs who feel their bottom line is affected by negative reviews. If Speakeasy had first become an integral part of the local restaurant industry’s daily operations, then investors would be doing the chasing, not the other way around.
“We’re not hanging those guys out to dry, and they’re always welcome here,” Henshaw says. “In my view, we’re in a long-term relationship.”