Reno-Sparks saw nearly 100 startups spring up in 2 years, and more are coming
Over the past two years, nearly 100 startups have moved to Reno-Sparks. Doug Erwin is the senior vice president of entrepreneurship at the Economic Development Authority of Western Nevada. He spoke with KUNR Business Reporter Kaleb Roedel about why new businesses are flocking to Northern Nevada and what the startup ecosystem needs in order to keep up.
Kaleb Roedel: I’m here with Doug Erwin, the senior vice president of entrepreneurship at EDAWN. Welcome, Doug.
Doug Erwin: It’s good to see you, Kaleb.
Roedel: I wanted to revisit a conversation we had back in July 2020. You told me that the startup ecosystem in Northern Nevada feels like a dam about to burst, so my question is: Has the dam burst, or how would you describe it now?
Erwin: I appreciate you bringing that up. I do remember that conversation, and, yeah, I feel like things have really flooded, I guess, in our community. I mean, you know, now that we are sort of living with COVID, and we've had a chance to kind of come out of hiding and really take a better sense of what's going on in the ground, we have definitely seen a dramatic increase in the number of companies, the number of quality companies, the amount of money that's come into the community, all of that has really been on the rise in the last 12 months or so.
Roedel: And how has the pandemic played a role in some of that entrepreneurial growth that this region is seeing?
Erwin: Yeah, I think there's a couple different things motivating that. I mean, we see a couple of different factors. You know, a lot of companies that were based in the Bay Area, this was like the final straw that broke them, and, you know, it felt like they needed to get out into smaller communities. And, so, the character of those companies look a little bit different. You know, where you might get a whole team, now you're getting a senior executive plus three, or four, and the rest of the team is remote. So, I think you're seeing a pretty major disruption in how companies were structured, you know, pre-pandemic and post-pandemic. So, we saw a lot of companies that just showed up here; they didn't call us, they just kind of ended up here and they got small teams. You have a lot of other companies that are just, you know, continuing to grow and expand and can't afford to do it in California.
Roedel: Since the pandemic started, what trends have you seen in terms of the types of startups that are launching here or moving here?
Erwin: We're just seeing companies that are coming up, coming into the ecosystem at a little bit later stage, which in the early days, or even just a couple of years ago, we were seeing more seed stage companies. We still see those, but we have more Series A and Series B stage companies than we've ever had in my tenure at EDAWN.
Roedel: You kind of touched on this already, but why has the region become such an attractive place for entrepreneurs to launch or accelerate their business?
Erwin: Well, I think COVID demonstrated it really accelerated remote work by probably a decade. And what really makes this place a great place for entrepreneurship is it's a great place to live. And one of the challenges was, when people didn't think they could do startups or, you know, grow their businesses outside of these key centers. Well, you know, COVID really changed that very quickly. So, you're seeing a mass migration, or mass, you know, people are moving places they want to live. And, so, you know, Reno being more affordable, although it's gotten more expensive, for sure, but its proximity to skiing, you know, climate, there's the geography, smaller community, all of those things now are even more appealing when you decide that you can kind of live or work anywhere.
Roedel: And Doug, what are some areas in the startup ecosystem that are lagging behind and need improvement?
Erwin: I think we could really benefit from seeing a nationally-ranked accelerator. I'm very hopeful that that will become true in the not-too-distant future. We've got some great programs, but, you know, having a program that really links to a broader network of mentors, and capital is really critical. I think we're still, we built really good bridges outside the community, but, you know, we need to continue to build those networks. And, so, kind of linking with a nationally-ranked accelerator program, I think will help with that.
Roedel: Where do you see things going from here, then?
Erwin: I'm hopeful that we continue on this trend. I mean, I'm definitely a little concerned about the costs. You know, that is definitely making it more difficult for startups. You know, we're still cost competitive relative to California, and the West Coast, but, you know, because people can kind of choose to live anywhere, you know, that makes it a little bit less competitive with certain areas, certain regions. That said, our proximity to California is amazing, so I'm really excited. And just the things that used to be barriers for people to come to Reno, kind of that ick-factor that, you know we used to have to overcome, are just not there anymore. They're just not there. And I think, you know, COVID has not been great, but there are, if you're going to look for a silver lining for us, I think it has definitely allowed people to come here and live here and enjoy living here. And they're just telling their friends, and so more and more people keep showing up. I mean, our founder dinners, which we host every couple of months, continually surprised me in a good way for the number of quality founders that are showing up to the community and building their businesses. It's really exciting.
Roedel: Thanks for coming in.
Erwin: Yeah, it's always good to see you, Kaleb. Thank you.