THE BETASPRING TEAM Allan Tear, Melissa Withers, Owen Johnson, and Jack Templin. [Photos by Richard McCaffrey]
Before we dive into a discussion how, someday, you and I — and an untold number of other Rhode Islanders — may work for a startup company, perhaps it’s helpful to explore exactly what the word “startup” means. After all, in the course of the Phoenix’s recent exploration of the local startup “ecosystem,” it was clear that definitions for the word vary.
Pamela O’Hara, co-founder and CEO of the small-biz customer relationship management (CRM) software company, Batchbook, tells us that “startup” describes a tech company before it has broken even or received a significant venture capital investment. “For the most part, [with] angel money, seed money, friends-and-family money, you’re still in the startup phase,” she said. “When you raise $60 million, you’re out of the startup phase.”
Khalil Fuller, Brown University student and CEO of the startup nonprofit, NBA Math Hoops, which aims to raise interest and aptitude in math among teens through board games and mobile apps based on pro basketball statistics, defines “startup” as any person or group “who sees . . . a specific part of the world and says ‘That sucks’ or ‘That can be better.’ ” Someone involved in a startup will aim to make that thing work better or suck less, he says.
Meanwhile, Allan Tear, co-founder Rhode Island’s renowned startup accelerator, Betaspring (more on what a “startup accelerator” is later on), pins the word “startup” to the size of a person or organization’s ambition. “A startup is a small organization that is on a quest to become big,” he says. “And usually [it’s] trying to do that by taking its products and services nationally or globally.”
But it wasn’t all disagreement among local entrepreneurs on the subject of what it means to be a startup. The word “growth” popped up again and again in our conversations.
“ ‘Startup’ is a company that’s built for growth, that is willing to lose money in order to achieve it,” says Charlie Kroll, CEO of the Providence-based financial services tech firm, Andera.
“Some people think of a startup as ‘I work independently, I don’t have a boss,’ or ‘I have exposed brick in my office’ or ‘I can wear jeans,’” says Angus Davis, founder and CEO of Swipely, the payment and marketing service for small businesses. It’s true, he said; jeans and exposed brick are things you might find at a startup. But the word boils down to a simple equation, he says: “ ‘Startup’ equals ‘growth.’ ”
And, indeed, when you tour Rhode Island’s startup companies and speak with founders and employees, it is the growth of these companies that’s so surprising and exhilarating. Maybe you’re speaking with recent Brown grad Parker Brown, director of marketing communications at G-Form, who tells you how his company has hired nearly 30 employees since the winter of 2012, when he came on board. Or maybe it’s the folks at Swipely describing how, just one year into their newly launched credit/debit-card payment-processing services, funds from client transactions in 29 states are flowing through their system at a rate of $1 billion per year. It’s during these conversations that you start to ask yourself, “Am I still in Rhode Island? Is this the same state with the infamously stagnant post-manufacturing economy? The state with the 49th-ranked business-friendliness, according to CNBC? The state still plagued by the stench wafting from the ashes of the 38 Studios bonfire?”
"REACTIVE PROTECTION TECHNOLOGY" G-Form's Parker Brown.
That’s not the state where Dr. Rajiv Kumar works.
“When it comes to the. . . economy, there are two Rhode Islands in many ways,” he says. His Rhode Island — an admittedly smaller place than the one we’re familiar with — is a place where success stories are common, compensation packages hover at an average of around $90,000 at his company, and job listings for highly technical positions stay open for months “because there’s a battle for talent and we simply can’t find people with the skills quickly enough.”
Kumar is the founder of ShapeUp, a company that grew out of a nonprofit venture he co-founded while a Brown med student as a way to encourage large groups of people to get healthy together. He describes ShapeUp as “a Facebook for health”: a social media network where users encourage each other to lose weight, exercise more, and pursue various other healthy habits. So far, their corporate-based network has over a million users, many of them coming from large clients like Boeing, Bank of America, and Hewlett Packard. But, just as Facebook eventually tore down the walls confining users to their particular university, down the road, the walls limiting ShapeUp to a particular company or institution may come down, too. “Corporate wellness, alone, is a $2 billion market,” he says. “[And] if we look at overall health and wellness, it’s tens of billions of dollars.”