From “build it, they will come” to “there it is, let’s go”
Gig Tank begins its fourth iteration at the end of May. This year, the annual startup accelerator centered on Chattanooga’s gigabit Internet is bringing much of the focus back to where it began three years ago: companies whose business models are built around the networking possible with the Gig.
I spoke with Alex Lavidge, director of this year’s Gig Tank, and Mike Bradshaw, executive director of the Company Lab, which sponsors Gig Tank, about what’s different in Gig Tank number four.
“We’re starting to see our track record increase,” says Lavidge, with 2014 Gig Tank graduates like Feetz and Gridcure scoring major angel funding and being accepted into top-tier national accelerator programs. “We’re also starting to see an evolution in the way that we think about startup acceleration.”
“Normally you’d say, well, these guys got investment in their company, now it’s capitalized, it’s ready to go and see you later,” Bradshaw added. “When companies come out of a program like Gig Tank, if they are able to get into accelerators that expose them to West Coast investors a little more readily than we are able to at this point, it builds more and more of those connections,” which benefit both the companies and Chattanooga’s overall innovation economy.
Some of those connections also come from companies that want to engage with Gig Tank startups as partners in the entire accelerator program. Partner companies announced this year include Alcatel-Lucent, Verizon Wireless, HomeServe USA, UPS Connect, US Ignite and Mozilla.
According to Lavidge, major companies are increasingly interested in startups because they’re feeling the disruptive effects of new technologies nipping at their heels. At the beginning of the year, Lavidge represented Chattanooga and Gig Tank at an invitation-only, three-day gathering of 200 entrepreneurs, executives and investors from around the world, hosted by entrepreneur Peter Diamandis.
One of the big topics of conversation was “exponential technologies” that are on the tipping point of causing disruptive change in many industries. They’re one of the major reasons most of the Fortune 500 companies from 1950 no longer exist, and why 40 percent of today’s Fortune 500 are expected to disappear in the next 10 years.
“That kind of change is going to come from areas like big data, 3-D printing, virtual reality, wireless sensor networks, artificial intelligence, robotics and human genome sequencing,” says Lavidge. “What’s the theme? Those exponential technologies all require more bandwidth.”
More companies are taking this shift to technologies that use ultra-high bandwidth seriously and moving to position themselves to participate in the change, rather than be destroyed by it. Part of that, for established companies, is engaging with the startups that are exploring the technologies now, even before the bandwidth is in place to roll them out nationwide.
“We have an accelerator process that works, and it’s turning a lot of heads in investment communities across the country,” says Lavidge.
Bradshaw points out that until recently, this dynamic was stuck in a chicken-or-egg conundrum. Visionaries believed ubiquitous high-speed bandwidth was coming, so it made sense to build products that need it. But until it existed, it was tough to convince funders to pay many millions to develop a product that wouldn’t be commercially viable without new national infrastructure that would cost billions of dollars. In the last few years, though, it’s become clear that the change is beginning to happen.
“So that’s the theory of operation behind Gig Tank this year,” says Bradshaw, “that in order to make progress on ultra high-speed, low-latency network applications you’re going to need a great set of scaled partners around you.”
Partners might be either first customers, who by using a new product can help a Gig Tank startup understand the market they need to penetrate, or companies that have already made the strategic decision to develop Gig-enabled products and see partnering with Gig Tank startups as a product development opportunity.
“Established companies operating at scale are including these new lines of business in their 3- to 5-year plans,” says Bradshaw. “That’s a new thing. It’s a distinction between where we were in 2012 when Gig Tank began and now.”
“We’re not just selling the Gig,” adds Lavidge. “I’ve been traveling across the country and talking to people all over saying the only thing moving faster than the Internet in Chattanooga is the rate at which people come together and share ideas and form a community.”
He sees these established companies’ ties to places like Silicon Valley, Austin, Texas, and Boulder, Colorado growing weaker because they are expensive places to live and do business.
“When we bring people here and they see how quickly things can happen because of Chattanooga’s cultural DNA,” he says, “that’s a huge selling point, on par with the gigabit infrastructure.”
Rich Bailey is a professional writer, editor and (sometimes) PR consultant. He led a project to create Chattanooga’s first civic web site in 1995 before even owning a modem. Now he covers Chattanooga technology for The Pulse and blogs about it at CircleChattanooga.com. He splits his time between Chattanooga and Brooklyn.