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Chattanooga, TN’s Startup Scene Is On the Rise

In case you didn't hear: Gig City is the place to be for entrepreneurs.

By Teree Caruthers on November 29, 2016

chattanooga, tn
Chattanooga / Staff Photo

When Ted Alling and fellow Samford University alumni Barry Large and Allan Davis founded logistics powerhouse Access America Transport in 2002, there wasn’t exactly a stampede of entrepreneurs moving to the Scenic City. Thanks in part to the trio’s latest venture, the Lamp Post Group, Chattanooga’s startup stats have seen a dramatic uptick.

Capital Visionaries Alling says the group started Lamp Post, a venture incubator that provides not only investment capital to promising startups but also legal advice, mentorship and office space, to give other entrepreneurs the same opportunities they received and to foster an environment in Chattanooga where budding businesses can grow and thrive.

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“When I started my first business, it was uncommon for people from other cities to relocate to Chattanooga to start their company. That has changed,” Alling says. “At Lamp Post, we bring people to Chattanooga all the time who want to move here.”

Lamp Post played a major role in recruiting Bellhops, an Uber-type moving company with more than 2,000 contractors in 116 cities.

“Lamp Post understood how to value an early-stage consumer tech company,” says Cameron Doody, co-founder of Bellhops. “They understood how important valuations are to an early-stage company that requires capital to grow, and they allowed us to raise the amount of capital that we needed to really scale our company. There is a totally different philosophy here around investing that very few people are familiar with in the South.”

Innovative Thinking

Over the last decade, the private and public sectors have invested in attracting and retaining top talent and capital.

In 2015, Chattanooga leaders unveiled the 140-acre Innovation District downtown, envisioned as uniting a mix of start-ups, incubators, accelerators and other catalysts for knowledge-based companies and creating spaces and places to interact and socialize away from work.

Development of the district will create a “highly urbanized, highly caffeinated area” that appeals to entrepreneurs and knowledge workers, says Ken Hays, President & CEO of The Enterprise Center, revamped by local leaders in 2013 to guide efforts to capitalize on Chattanooga’s 10 gigabit-per-second fiber optic Internet service known as “The Gig.”

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Hays’ office in the renovated Edney Innovation Center sits in the heart of the district. Neighbors include the renowned accelerator Co.Lab and the member-based Society of Work shared office space.

“Leading research shows that if a city is not focused on the innovation economy then it’s going to be left behind,” Hays says.

The region has made a significant commitment to resources to ignite entrepreneurship.

The Chattanooga Area Chamber of Commerce runs the Hamilton County INCubator, a 127,000-square-foot support center for startups – the largest business incubator in the state and the third-largest in the country. The INCubator has helped more than 500 companies get started, pumping millions into the local economy.

“Part of the reason entrepreneurs are attracted to Chattanooga is because there’s an open mindedness and a willingness to collaborate and pursue new ideas, especially in the downtown area,” Alling says.

Scenic City Attractions

The region has been able to attract and cultivate a score of savvy tech-oriented startups, companies like Ambition, creator of a motivational platform described as “fantasy football” for sales and marketing professionals. The company’s founders came to Chattanooga from Birmingham, Ala., to launch the business, which now employs about two dozen, because it found its resources and support network for entrepreneurs far more inviting than other communities it considered.

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The Gig and numerous initiatives supporting small businesses are “a kind of sweetener” that makes it better for a company to be started in the area, Doody says. Quality of life amenities and low cost of living were also a draw for the fledgling company.

“There are major benefits of running our company in Chattanooga, as opposed to San Francisco in terms of expenses, in terms of cost of office space or the average cost of an employee,” Doody says. “Plus we have to be able to recruit world-class talent to compete at the levels of companies based in New York City or San Francisco. In order to do that you have to be in a place that people want to  move to, and Chattanooga is such a place.”

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