Innovation is Greater Philadelphia's economic fuel. The 11-county region's ability to develop, attract and retain entrepreneurial talent is launching fast-growth companies like RJMetrics, Clutch, Vuzit and OneTwoSee.
Though it had already built a thriving technology sector, Greater Philadelphia will enhance its world-class reputation as a center of innovation – and enhance the city’s skyline – thanks to a $1.2 billion facility planned by Comcast.
The Philadelphia-based communications company, parent of NBC Universal, plans a 59-story tower that will rise 1,121 feet next to its global headquarters in the heart of the city.
More important than how the building looks on the outside is what will happen on the inside. The company, which announced a planned acquisition of Time Warner Cable in February 2014, plans to make the Innovation and Technology Center the dedicated home for its growing workforce of technologists, engineers and software architects.
The new center is expected to create $2.75 billion in economic activity in the state and create more than 20,000 temporary jobs, 4,000 permanent jobs in the state, and 2,800 new permanent jobs in Philadelphia.
Comcast will use about 75 percent of the building for its technology staff. It will also be the new home of Philadelphia’s NBC and Telemundo television station affiliate, creating a media center in the heart of the city. And it will offer space for other local technology startups, which are in ample supply throughout the region.
An area that stretches from Philadelphia’s Old City through its Northern Liberties neighborhood has taken on the moniker N3rd Street and is populated by numerous technology companies and spaces geared to tech entrepreneurs.
Two co-working spaces in the N3rd Street district include Indy Hall and Devnuts, places where entrepreneurs can engage and connect with other entreprenurs.
The region is awash in tech startup successes. Clutch, an e-commerce app that combines e-gifting, loyalty programs and merchant rewards, started in a basement. RJMetrics, whose analytics software gives small and mid-sized e-commerce companies tools once reserved for large firms with deep pockets, “launched” in a co-founder’s attic.
Both tech companies have seen exponential growth. In both cases, the idea that became a company started somewhere else – for RJMetrics, in Manhattan, for Clutch, in Silicon Valley – but the founders intentionally came home to set up shop in Greater Philadelphia.
“The cost of running experiments about what works as a business is half or less what it would be in New York or The Valley,” says Robert Moore, CEO of RJMetrics.
Andy O’Dell, chief commercial officer at Clutch, says the area’s affordability, even measured against other East Coast cities, is a big draw.
“That plays out in a competitive hiring situation,” O’Dell says. “It also gives us a pricing advantage.”
Tech Investment Outpaces U.S.
The 11-county region’s ability to develop, attract and retain entrepreneurial talent is launching fast-growth companies in industries such as renewable energy, video game development, mobile devices, biotechnology and e-commerce servicesvices.
A recent study from Ernst & Young, Ben Franklin Technology Partners of Southeastern PA and the Greater Philadelphia Alliance for Capital and Technologies found that between January 2008 and June 2013, Greater Philadelphia saw $4.1 billion invested in the region’s early-stage technology companies.
Venture deals in 2012 increased 17 percent over the previous year, though they declined 3 percent in the United States as a whole.
Apps for Enterprises and Gaming
Emerging tech players include Vuzit, which has developed software for sharing and controlling documents, images and other sensitive content on the Web; and OneTwoSee, which helps sports-related enterprises monetize fan engagement.
FireWater Games, at the Rutgers Camden Technology Campus, is turning its attention to “wearables” in the wellness space. In the “Internet of Things,” the idea is micro apps that deliver a highly personalized experience designed to change behavior, says founder Vance Souders.
Additionally, Philadelphia Game Lab, also in Center City, works with local universities and industry experts to create a hub for game developers, publishers, investors and related businesses.
“Starting and growing in California was not the right strategy for a host of reasons,” O’Dell says. “We purposely set up in Philadelphia. We are Philadelphia kids who believe in Philly’s future and want to have a part in it, large or small.”
Local Founders, Local Hires
In January 2011, RJMetrics employed four people, including the two co-founders, who met as colleagues at a venture capital firm in New York City. By the end of 2013, the company had a team of 40 in Central City.
“We are always hiring,” Moore says.
RJMetrics’ software suite provides hundreds of online merchants with analytics that help them make better business decisions, including the most profitable return on marketing dollars. The company has a strong relationship with the engineering program at Drexel University and has hired nearly 10 Drexel graduates.
Clutch is now in Ambler, northwest of Center City, in a reclaimed brick building. The late-1800s structure, once the power generation facility for a plant on site, has huge windows throughout. It is, O’Dell says, “much less basement-like.”
In 2013, the company closed a $5.3 million Series B round; bought ProfitPoint, a gift card and loyalty platform provider, and its 3,000 merchant accounts; and received the Best Mobile App Award from Emerging Payments Ltd.
“Starting in California and growing in California was not the right strategy for a whole host of reasons,” O’Dell says. “We purposely set up in Philadelphia. We are Philadelphia kids who believe in the future of Philly and want to have a part in it, large or small.”