RALEIGH – Veteran entrepreneur and investor Chris Heivly is not someone who is known as never expressing his opinions, and in talking about the state of the entrepreneurial ecosystem, across the Triangle he’s candid in his assessment of the region’s strengths as well as weaknesses. A recent survey ranked the Triangle as one of the nation’s “Tech Towns.” What’s Chris say?

We need … a lot.

Techstars

Heivly a serial entrepreneur and fixture on the local startup scene. Over the last nine years, he’s worked hard to build up the local innovation ecosystem, founding both Startup Factory and Big Top, the latter sold to Capitol Broadcasting Company and parent to WRAL TechWire. He’s currently serving as entrepreneur-in-residence at Techstars, traveling around the world to help other cities accelerate their own ecosystems. He’s set to appear as a speaker at today’s Innovate Raleigh.

WRAL TechWire’s Chantal Allam recently got to chat with him about the state of our ecosystem, what we need to work on, and why it’s ok that Amazon may not be in our future.

  • You’re back home just in time to appear at Innovate Raleigh. You’re slated to speak on the state of our ecosystem, and how we compare to others. So what’s it look like from where you’re standing?

In some areas, we’re doing better. We’re ahead of lot of peer cities of similar population in terms of funding — Austin, Philadelphia, DC, Atlanta, Nashville. Could it use some juicing? Yes, probably at the seed level.

We have a model that we use to characterize people in one of three levels: developing, emerging or leading. We are definitely in the middle pack of emerging. So some of things that we need to do is build more companies, companies need to scale up, we need more experienced executives; we need those executives to have exits. We need after those exits, founders to recycle their capital and put more money back into new companies, just like they got capital. When that is running like a machine, like in New York or Boston, the Valley, LA, maybe even in Seattle, it creates an opportunity for just about anybody who is motivated to kind of hopefully start and build a company.

We’re just a little light on all those things. My gut tells me, the number of new startups has kind of been flat for the last couple of years. We’re not building net new companies. It’s not increasing to the level it should if we’re growing. Why is that? That’s just my gut feel. We may have hit a little plateau. And now we need to think of some new things that we need to do. We build more better companies, capital from New York and Chicago and the Valley will come racing.

  • What about our pool of talent?

Every community today suffers from a lack of skilled talent for those kinds of things, and we’re not alone in that. We’re not any better; we’re not any worse. However, the challenge is, how can we be better and think differently to solve this problem compared to other places? It’s a dog-eat-dog world out there in terms of trying to recruit talent. You cannot grow your company if you cannot get skilled workers. I’m talking about software developers, digital marketers, mid-level to senior executives who have had experiences scaling companies to the levels we’re talking about. We need to think creatively about how we solve our own talent problem.

  • But we’ve got all these amazing local universities. Isn’t that a natural talent pipeline?

You’ve seen a hundred studies all talking about how RTP has these amazing universities and talent. Well, that sounds great on the surface, but the link companies and universities here is still weak. Most of the smartest people that come out of Duke and Carolina and State are already geared to go to New York or the Valley. Some of them think that’s the only option they have. Well, there’s a ton of options here, but we need a much stronger link between our universities and our students and the local companies.

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  • Any other suggestions?

It’s every company’s responsibility to figure out how to train people. Especially with the smaller and medium-sized businesses, they don’t train people. It’s not in the budget. They are expecting skilled workers to land at their door and ready to go. It’s ridiculous.

When I talk about thinking out of the box, the university is not the panacea to train all skilled workers. There are places like Momentum Learning (an immersive coding course based out of Durham). Full disclosure, I’m an investor as well. There are people changing careers, they’re 30-40 years old and they’re making switches. Between that and some other versions, that’s an alternative approach. To expect someone to get a four-year computer science degree in order to be a software developer is ridiculous by today’s standards. I don’t know why we’re not training thousands of people, not tens of people. I don’t know any reason why the state shouldn’t step up, especially some of our disadvantaged population. Learning a code is not white man’s game.

  • It hasn’t been the easiest week. From recent reports, it looks like Amazon has passed on Raleigh for its next headquarters. Why do you think that is?

Transit. We have a terrible transit problem. This should be a seamless community between Raleigh-Durham-Chapel Hill-Morrisville-Apex. We should be able to get on trains. I should be able to live in Raleigh and work in Durham and not think twice about it. It should be a 20-minute commute, just like you do in many big cities. We’re woefully behind.

Frankly, I’ve also got to think [it has something to do] with some of the things our state government has done with HB2. (The bill, which has since been partially repealed, barred people from using the restroom that corresponds with their gender identity.) These are scary things to more progressive companies and people, and the startup community is typically a little bit more left leaning and liberal. That’s not sending the right message.

  • So is there a silver lining?

It’s a hell of an opportunity, but I think Amazon would have used up a lot of the scarce oxygen that is in the room. That concerned me a little bit. I don’t mind that we didn’t get Amazon, but we better get Apple.

The backstory

  • Give us your backstory in 60 seconds or less.

I grew up in Philadelphia, and was co-founder of MapQuest. I then went to Chicago, ran a corporate venture fund for a while. I became president and ran McNally, which is a big map publisher, the biggest in the world back in the day when paper maps were important. I moved down here 12 years ago simply to get away from the weather.

I thought if one startup is fun, like my own, then helping ten at a time should be a complete blast. I ran LaunchBox Digital (startup incubator similar to Y Combinator) in 2010, and a year later ran the Startup Factory of upwards to four years. We invested in 42 companies in Raleigh-Durham. Put about $5 million into play. But more than that, we ended up being is helping to be one of the key catalysts in the area to create this frothy startup scene that you see today.

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  • How did you come to get involved with Techstars?

So when Startup Factory ran its course, I was looking for something interesting to do. About two years ago, TechStars said, ‘How would you like to work with us and do it around the world?’ My mission today is going into other communities, and asking, ‘How can we help you build a more robust startup community?’ It’s kind of like a consultant. The gigs range from three months to three years.

  • For the last 18 months, I understand you’ve worked with cities from Fort Wayne, Indiana to Lima, Peru. How much time do you actually spend in the Triangle these days?

Not much, not this year I should say. This year has been planting seeds. I think I’ve made 27 business trips, and nine of them international. It’s exciting, but also tiring.

You can’t go understand what the customer needs until you go talk to the customer. You’ve got to go back to the places. I’ve probably spoken to 150 people from 75 cities around the world and probably have visited 20-25 of those. You get to understand a lot of things, but the most interesting thing you understand is that every community is different. There’s not one playbook or recipe that you can run here.