Why You Should Start a Company in... New Orleans
What do entrepreneurs do? They find an itch that needs to be scratched and go at it. After the devastating hurricane of 2005, New Orleans definitely had a lot of itches.
Years of effort to attract entrepreneurs and encourage locals to start something as an alternative to the corporate jobs that were lost are paying off. The city now boasts entrepreneurial enclaves like Entrepreneur's Row, Idea Village and Entergy Innovation Center, all of which is basically real estate housing startup efforts. And the Big Easy also counts several groups and events that have sparked a vibrant community, such as Net2NO, BarCamp, Social Media Club, Startup School, WordCamp, and TribeCon. Though New Orleans lacks an abundance of local capital, the state helps out with a 25% tax break for digital media companies, plus 10% on human capital costs.
It's still early days for this nascent hub, but one startup may put it on the map: Receivables Exchange. Started by a transplanted New Yorker, the company's product is a market for companies' receivable accounts. It recently closed a $17 million Series C round from Bain Capital, Redpoint Ventures, and Prism Ventureworks.
Chris Schultz, president of Internet firm Voodoo Ventures, spoke with Fastcompany.com about what makes New Orleans' startup scene unique.
What makes New Orleans a great place for startups?
Well, I think New Orleans is a fantastic place for startups, and the city as you know has reinvented itself post Katrina, but some incredible things have happened and that starts with the people that have moved to New Orleans since Katrina. We have this incredible influx of young people, energetic people, people that wanted to be here and want to kind of be part of the recovery. And a lot of folks realized that the best way to do that was through creating jobs by starting companies, so a lot of interesting entrepreneurs moved down. The community in general I think became a lot more open.
More specifically, I'd say the bullet points would be it's the type of place that I think is right for our times right now from a cultural standpoint. It's an incredibly creative and historic city with a rich quality of life.
But why should anyone choose New Orleans?
Startups can be anywhere and obviously we recognize that we're not Silicon Valley or New York, but I think that the virtualization of business as a whole is really benefiting us down here. And so, people can choose to be here because of the quality of life and, significantly, the lower cost of living.
You can build a business for much less down here. So that's an important factor too. Finally, I'd say that one of the things that has been very significant down here is the organizational and governmental support for the startup community. The state government has a number of tax credit programs. They're geared at digital media and specifically modeled after one in the film industry. Six years ago they launched this, a 25% tax credit on money you spend in Louisiana. It vaulted Louisiana to the third largest production in the country after New York and California.
And they've just done the same thing with digital media--the same tax credit, up to 35% of what you spend on building a tech company. So they're very curious about it and providing credible support.
Are there particular types of startups that do better in New Orleans than others?
I think that we're honing in on our identity as a community. One thing we are seeing is purpose-driven companies. I don't want to give the impression [that it's] non-profits or purely cause-driven companies. But companies that, you know, sort of the triple bottom line. The idea of doing well while doing good. We're seeing a lot of those companies down here and I think that that really [matters to] the people that moved here after Katrina, wanting to build companies that are kind of purpose driven.
How would you say that New Orleans is better or different for entrepreneurs than other cities?
Well, that's a good question. I moved here from L.A. in 2002, above all for the quality of life and I mean by that, the people that are here. I was searching for authenticity and, you know, soulful people and people with character and strong character and that's a lot of what you find down here.
And I think that's sort of what attracts a lot of people here. In October, we did the first Tribe Conference, which is a conference about leveraging power of community to create change. And three of the speakers that came to the conference--one is from L.A., another from Virginia, and another guy--all moved down here after that conference. Literally, moved to New Orleans because of the connections they've made, and the power and the spirit of community down here.
If you've ever sat down with a type designer, what you quickly realize is that they rarely talk about fonts in purely aesthetic or even functional terms: They talk about assertiveness or calm or friendliness. In short, they talk about personality traits. It makes sense, then, that your personality could be translated into a typeface. And Pentragram has done just that, in this lovely microsite, 