By Jeff Barrett, CEO at Barrett PR
If you only think food, cobblestones and “The Notebook,” you don’t know the new Charleston, S.C. It’s now a full-blown business community worthy of consideration as your startup’s HQ.
Spurred by coastal transplants drawn to the city’s potential, venture funding is fueling a boom in Charleston’s startup activity.
There’s still time, and space, to get in on the action. Just don’t be surprised by the crowds of tourists en route to your pitch meeting.
It’s safe to say that as a city, Charleston is punching above its weight. The 74th largest U.S. metro area has a population that is growing at a rate three times the national average, per the Charleston Regional Development Alliance.
Meanwhile, the state of South Carolina is setting new tourism records, drawing in $23.8 billion in 2018. Charleston likely carries the team. It has been named Travel & Leisure's No.1 U.S. destination for the past seven years.
I’ve visited Charleston multiple times, and it’s much more than a great place to eat, drink and sightsee. It’s a top 10 startup city about to be fully discovered.
Charleston as a startup city
Last year, speaking at regional tech summit Dig South, I saw the proof firsthand. When you meet with the founders shaping Charleston’s startup scene, you quickly notice one thing: Most aren't from around here.
That makes it unique as a startup hub. Most build from within, with a couple of core, homegrown companies that spur others and draw attention, investment and transplants. Charleston is a delightful inverse. With so many people visiting over the past 10 years, plenty have decided to plant flags here -- grow something here -- rather than follow behind a particular market sector or investor. As a result, two-thirds of its population growth comes from out-of-state transplants.
Charleston’s success is one of the most unconventional cases in my over two years of traveling and writing about startup ecosystems. Many would join me in deeming it the only startup hub in the country that owes its start to tourism.
Charleston is quickly becoming a hub for startup founders, who network at local conferences like Dig South.
Companies choosing Charleston
The migration of business to Charleston began with Blackbaud, a software company that moved from New York to the South over 30 years ago as a veritable startup. Today, it’s valued at over $4 billion. A younger company, Echovate, chose Charleston over Boston and Austin when relocating from New York in 2014.
But those are your solid, above-average tech hub bonafides. It gets more interesting.
Carolyne LaSala, who launched Apple's AppStore, recently teamed up with Amy Salzhauer, who in 1999 founded Ignition Ventures, a venture creation firm critical to the growth of Boston's tech scene. In 2017, the duo moved from their respective coasts to Charleston with a mission to drive investment in the region. Their firm, Good Growth Capital, is poised to further activate the wealth that exists in the Southeast for startup investment. For reference, investors brought $457 million to South Carolina from 2014-18.
LaSala and Salzhauer are on the leading edge of a second wave of professionals who have seen enough capital and startup growth in Charleston over the past five years to take the leap.
Meanwhile, the Harbor Entrepreneur Center serves early-stage startups with its business accelerator program. Past cohorts provide a sampling of the city’s budding businesses:
Interloop, a startup whose founders launched their sales forecasting software in 2015 after relocating to Charleston years prior
Corner Office, whose algorithm aims to make hiring easier by matching employers with executives based on oodles of information on their personalities and preferences
Sidegig, which nods to Charleston’s booming hospitality industry by matching gig workers with extra shifts in restaurants, hotels and the like
The Harbor Entrepreneur Center offers an accelerator program to help local startups grow.
Coming up in the Lowcountry
Currently, Charleston is nurturing the infrastructure to support growth. Stephen Zoukis, the developer behind New York's Chelsea Market retail-slash-office space, is another transplant. Zoukis originally moved to Charleston to retire. He’s since reconsidered. The result is the conversion of old warehouse spaces into two funky tech centers, Half Mile North and Pacific Box & Crate.
Half Mile North welcomed its anchor tenant, Charleston-born tech company Blue Acorn, in 2014. Blue Acorn has since expanded into a total 20,000 square feet of office space. Pacific Box & Crate opened in 2017 and is home to multiple large companies, a food hall that rotates restaurant startups every couple months and more amenities to provide everything employees need on-campus.
Tech company Blue Acorn is headquartered in Charleston's Half Mile North development.
Most startup ecosystems lose momentum when they run out of space, investment or the desire to nurture new companies. None of these is in short supply in Charleston. If I project out into the second half of the 2020s, I don’t see a single reason why this waterfront city shouldn't continue to thrive.
Even if a couple of its startups don't hit as well as expected, the city will remain a destination. It will always draw people who want to be here, live here, work here. And once you become a destination, the resources don't leave; they only grow.
Charleston’s leaders spent the 2010s convincing people they could create a billion-dollar business scene. They’ll spend the entire 2020s capitalizing on that being a fact.
And if I can make a case for Charleston without mentioning a single restaurant, Folly Beach, King Street or architecture, then its future as a place to launch your business has fully arrived.