East Coast Blizzard Aids Delaware in Courtship of Austin Startup

Wilmington, Delaware

Wilmington, Delaware Jon Bilous / Shutterstock.com

 

Connecting state and local government leaders

Two entrepreneurs got the red carpet treatment in the First State, which wants to boost its tech credentials.

These days, startups don’t have to cluster in the traditional places where the tech sector has previously found fertile ground. Instead of Silicon Valley, San Francisco, Boston, Seattle and Austin, you can find smaller but vibrant tech clusters in places like Miami, Omaha and Pittsburgh.

Delaware, like so many other states, is trying to boost its tech credentials to lure economic development to its cities. And the Mid-Atlantic’s recent blizzard was able to help Delaware woo an Austin-based startup to Wilmington, the First State’s largest city, to see if it’s the right place to put down roots.

The News Journal details how the Delaware state government, economic development boosters and civic officials in Wilmington courted “two out-of-state entrepreneurs in their late 20s who have no actual product on the market, no employees and a website that consists of two words: ‘Coming Soon.’”

According to The News Journal:

What had been planned as a three-day visit stretched into a week because of the recent blizzard and a growing slate of meetings with some of the state’s biggest movers and shakers.

Their visit ended up including face time with Gov. Jack Markell and top officials in the Delaware Department of State, casual chats with a few political candidates, sit-downs with some of the city’s top law firms, an appointment with the state’s largest incorporation service provider and investment meetings with some of the area’s most powerful business leaders.

It’s too early to tell whether the startup in question, Counsl—it aims to develop an app that makes the process of business incorporation easier—will become a big player in Delaware’s business community, but setting up shop in the nation’s 45th most populous state makes sense. Delaware, after all, is the nation’s incorporation capital.

The News Journal reports that state and business leaders think that Counsl could be a innovative and disruptive player in the legal industry.

And any new startups would certainly be welcome in Wilmington, which sits along the crowded Northeast Corridor and has to compete with bigger neighbors, like Washington, D.C., Baltimore, Philadelphia and New York City.

Last summer, Technincal.ly Delaware asked in an article: “Does Delaware have what it takes to build a thriving tech ecosystem?

The answer is mixed, according to Technical.ly, but the state has some of the elements to become are more visible tech player.

“In our own way, yes,” said Mike Bowman, whose Delaware Technology Park, in collaboration with [the University of Delaware], is successfully building out a wet lab, called the STAR Campus, in Newark. Bowman alluded to a 2013 Kauffman Foundation study of U.S. entrepreneurship. In the study, Delaware boasted the highest increase in entrepreneurial activity rate over the past decade.

“That momentum has continued but what I would call it is organic growth,” said Bowman, citing Incyte and SevOne as examples of startups that grew organically in Delaware. “It’s not ‘lasso ’em and see what we can drag in here’—that’s not the way it’s ever going to work in Delaware. We do not have the funding or the size to do that.”

“Size” is critical, and it’s something Delaware just does not have.

So rolling out the red carpet, which Delaware did for Counsl, is part of the formula that unlikely tech hubs like Wilmington need to use to stand out regionally, nationally and globally.

And for startups in a smaller environment like Delaware, it’s easy to stand out.

"Austin doesn't understand us," Counsl's chief technology officer, Rafael Lopez, told The News Journal. "We have an investor ready to jump in, but it took us five months to educate him on the market and why our product is needed. Here in Delaware, people we talk to get it in five minutes."

Michael Grass is Executive Editor of Government Executive’s Route Fifty.

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