By Kimberley Sirk
Innovation can crop up where and how you least expect it. In our series “An Unexpected Source of Innovation,” we will visit some of America’s little-known hubs of technological creativity!
Perhaps best known as a craft beer and independent restaurant mecca, and as a haven for musicians and artists of all genres, Asheville, North Carolina, frequently makes appearances on lifestyle-oriented “Top 10” or “Best of” lists. It is also a remarkably “green” community – some 80 percent of its 86,000 residents recycle.
Nevertheless, freshly brewed ales, live music, and regular recycling can’t provide enough economic opportunity to sustain a rapidly growing and desirable community for everyone who is flocking to this mountain town. Accordingly, local leaders in Asheville sought to build an infrastructure to enable businesses to start, grow, and thrive here – but with a local sensibility.
Enter the Venture Asheville initiative.
The brainchild of the Asheville Chamber of Commerce and the Economic Development Coalition for Asheville-Buncombe County, the Venture Asheville initiative works to energize a local high-growth entrepreneurial ecosystem. Fittingly, investing and growing “green” businesses – those which create value from renewable, sustainable activities that are mindful of reducing energy use and waste – are the basis of this ecosystem. Success is based on businesses that sustain the earth, and on a system that sustains itself and the local economy in large part by bringing like-minded people and ideas together. The interdependent elements of this ecosystem are entrepreneurs, talent, and the capital to make it all work. Actively connecting all three becomes the catalyst for business innovation.
Knowing that it takes a special combination of vision and development muscle to start an initiative of this type, the group hired Josh Dorfman, a startup veteran with experience on both coasts, to take the reins as director of entrepreneurship. A recent transplant to Asheville, Dorfman is the creator of The Lazy Environmentalist brand – giving him a potent resume that makes him at home in a small, green community with a high-tech story to tell.
Dorfman explains that the terminology “entrepreneurial ecosystem” is relatively new, as are the methods of developing one. A primary way of feeding an entrepreneurial ecosystem is to create opportunities for entrepreneurs to meet the people who can help them grow, and who can provide them with money other than that which comes from established credit.
Accordingly, a new investor network was launched earlier this year: the Asheville Angels. The invitation-only group is comprised of local businesses leaders to help mentor and fund budding companies. Dorfman did his homework before launching the organization: The group’s structure borrows from a similar, five-year effort in Greenville, SC: the Upstate Carolina Angel Network. That neighboring community’s network has been in business for more than five years, and has driven $10 million into its startup community. It provided Asheville’s leaders with a blueprint for its own process of curation, screening, and due diligence review of startups to consider bringing under the Venture Asheville umbrella.
Dorfman serves as the managing director of Asheville Angels, lending his own expertise in bootstrapping startup ventures to the mix. The Asheville Angels focus on green startups. Businesses seeking the support of the Angels are put through a rigorous process where they present and defend their business plans.
Dorfman is quick to point out that Asheville Angels is a network, and not a fund. “Asheville has a substantial number of affluent folks who’ve chosen to retire here,” he explains. “Asheville Angels provides the right vehicle for these folks, who want to invest in economic development in Asheville. Since we’re growing a network, as opposed to a fund, investors can have a closer relationship than that which they’d have by adding money to a fund,” he says. And, he adds, investing in startups is not seen as philanthropy.
“This offers greater value for both sides, rather than simply 50 investors writing a check for $20,000 each,” he adds. The return for the community is in creating a sustainable ecosystem of entrepreneurialism.
That’s not to say that a stated focus on green businesses precludes others from benefiting from the support of Venture Asheville. “We see a future for all in a diverse economy,” Dorfman says, “[so we are] seeding companies that millennials will want to work for.”
Startups in the community that work with Venture Asheville are remarkably diverse and unique. For example, there’sBROO, which has created an artisanal line of beauty products, including shampoos and other personal care products created from local craft beers.Appalatchproduces custom-made clothing from sustainable fibers using a 3-D printing process. And, under those custom-made clothes you can wearKnock Out!undergarments, made of 100 percent cotton with a high-tech absorbency twist. All these products are made in the USA, and show that sustainability is, well, sustainable.
Asheville’s entrepreneurial community is getting noticed. On Nov. 12, DoctorDirectory.com, an Asheville startup company founded in 1996, was purchased in a deal worth $65 million. The buyer is New York City media company Everyday Health.
So, aside from creating a beneficial ecosystem, what defines success?
“Job creation in high growth ventures is one way; investment flowing into startups and the number of investors who participate in funding by class of Angels are others,” Dorfman says.
Another metric could be the number of exits each year – i.e., an acquisition such as DoctorDirectory’s – where the investors get their money back. For a small community like Asheville, which at its heart is a community of local, small businesses, exits are a new concept which needs to be tried on more often to feel comfortable.
But Dorfman has his own definition of ultimate success: “I believe that when we have truly created FOMO – the fear of missing out – that is success.”
With all the innovation flowing out of Asheville, it seems like that dream is already a reality. By drawing together the unique characteristics of a community to foster a culture of “why didn’t I think of that” innovation, Asheville is evolving past its well-publicized eclectic roots into a model for sustainability in both ecology and economics.
Kimberley Sirk is a North Carolina-based writer and editor with government, higher education and big-brand healthcare public relations and marketing experience. Follow her on Twitter TWTR -4.00% at @kimberleysayshi.