Building Startup Culture in New Orleans

Posted by: John Tozzi on January 27, 2012

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Since Hurricane Katrina, New Orleans has reinvented itself as a bit of an entrepreneurial hub, replete with incubators and accelerators and an Entrepreneur Week now in its fourth year that draws visitors from Google, Stanford, and venture capital firms. It has homegrown success stories like the Receivables Exchange and Naked Pizza that now have national profiles.

The groundwork for building a startup community in the Crescent City began long before Katrina put it in the spotlight. Part of the effort originated in 1999, when New Orleans native Tim Williamson met at a bar with four other entrepreneurs to discuss ways to counter the brain drain that began in the city in the 1980s. The tech boom of the 1990s had largely missed New Orleans, Williamson says, and most people with good business ideas left the city because they encountered an insular business community with little support for new entrepreneurs. Williams soon co-founded the Idea Village, a decade-old nonprofit intended to change that. His question: “How do you make entrepreneurship part of your culture?”

It’s a question cities across the country are trying to answer. From New York to Detroit to Cleveland, business and political leaders see high-growth entrepreneurship as a salve for unemployment and decay, especially in areas where manufacturing or other industry has disappeared. Smaller cities are seduced by the prospect of becoming the next Boulder or Austin, centers of technology and growing industries that draw young, educated workers and high-paying jobs.

“I believe this can happen anywhere,” Williamson said in an interview yesterday. That’s not to say it’s easy, or that every plan to make Akron or Omaha into a startup center is going to work. Williamson says that cities plunk down big sums and try to orchestrate entrepreneurial revivals from the top down are likely to fail. Local entrepreneurs need to lead the effort and build relationships in different networks throughout the city. “It takes time. It doesn’t take money,” he says. “Lack of money is good, in a sense.” That forces communities to develop local support for entrepreneurs organically, rather than, for example, building a shiny new incubator building.

The job’s not done. New Orleans still doesn’t have the sophisticated investors that help make Boulder and Austin attractive places to start companies. Williamson says no venture capital firm has an office in the city, and many of the angel investors are funding companies for the first time. But more than a decade’s work has created an environment more welcoming to innovators and entrepreneurs. It’s welcoming enough that iSeatz, a homegrown tech company that left for New York after Katrina, moved its headquarters back to NOLA in 2007. “There’s a belief now that New Orleans is a great, supportive environment,” Williamson says. “People don’t leave when they get funded.”

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What's it like to run your own company today? Entrepreneurs face multiple hurdles new and old, from raising capital and managing employees to keeping up with technology and competing in a global marketplace. In this blog, the Small Business channel's John Tozzi and Nick Leiber discuss the news, trends, and ideas that matter to small business owners. Follow them on Twitter @newentrepreneur.

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