The Tao of TechMark Shaffer / Lowcountry Weekly
Beaufort's New Hi-Tech Incubator Brings the 21st Century to Town
Last January Beaufort Mayor Billy Keyserling cut the ribbon at 500 Carteret Street officially ushering in the city's Age of Technology. In a town that dates back centuries some things are better late than never. Enter the Beaufort Digital Corridor, a hi-tech incubator sponsored by the city to grow the tech and knowledge-based companies of tomorrow in the shadow of the Antebellum South. The Beaufort model is a slightly modified spin-off of the highly successful Charleston Digital Corridor, the brainchild of Ernest Andrade – also instrumental in getting the Beaufort project up and running.
The driving force in recruiting Andrade and bringing the project to life in an astonishingly short six months is City Councilman, Stephen Murray. The final piece of the puzzle was finding someone both capable and dynamic enough to run the thing. Karen Warner seemed the perfect fit with nearly three decades spent as a manager and an executive in High Tech and Marketing. She describes her job as "managing a techno ecosystem." Her experience in venture capital factors in directly with a key element to the incubator's long term success: finding the money to fund the dreams.
I recently sat down with Murray and Warner in the Corridor's newly renovated facility in the old Bank of America building on Carteret Street. The BDC's BASEcamp has been neatly transformed from a dreary 1980's branch bank into 5000 square feet of state-or-the art office and meeting space. Private offices are available for public lease as are "touchdown" spaces, basically plug-in cubicles designed for short term and temporary use. "It's perfect for visitors or guests who need some work space for a day or two," says Warner. The modern minimalist design is meant to evoke Silicon Valley. "And we're dog friendly," she adds.
Murray, a businessman and member of the Redevelopment Commission, says it all began when Council got some disturbing census numbers in 2015.
"It was shocking to a lot of us," says Murray. "We found that over ten years we had about a 40 percent decrease in per capita income in Beaufort. At the same time we had about a 25 percent decrease of 21 to 44 year olds in the city. Meanwhile the cost of owner occupied housing is about twice the state average at around $250,000. Not positive trends when your citizens are getting poorer, older and the young folks are leaving and the cost of living is skyrocketing. So, we took a hard look at how to turn some of these things around."
The typical approach to economic development tends to be large scale industrial recruitment. This, says Murray, was simply not a reality for a place like Beaufort. There had to be another solution, one that would have maximum economic impact with a minimal footprint. The suggestion to reach out to Andrade came through a mutual friend over drinks.
Over 15 years Andrade's non-profit incubator has been hugely successful in helping to grow Charleston's hi-tech base. With an average salary just shy of $90,000, Holy City "techies" make nearly double the regional and state average yearly wage.
Stephen Murray: They had a very similar problem. Young people were leaving, there was a rapid rise in the cost of living and a very seasonal, tourist driven economy with low wage service and hospitality jobs.
Karen Warner: Over 15 years, 148 companies incubated with a $88 million in capital raised by those companies. They've got about 356 members.
Murray: We really hit it off with Ernest and brought him down to Beaufort and walked him through this space and the pieces just fell together. He's very passionate about the program and what they've done in Charleston and he was willing to help us. So, in June 2016 the Redevelopment Commission and City Council authorized a partnership with the corridor and we raised just shy of a million dollars. We were able to upgrade this facility with no cost to city taxpayers, which was pretty exciting. Even more exciting was that the time we authorized to the day we opened was about six months.
Warner: We cut the ribbon January 12th.
Mark Shaffer: The idea's based around 4 components.
Murray: Talent – cultivating innovation and knowledge-based businesses. Capital – creating access to money through investment or other areas. Space – that's the Corridor where you can rent an office here or a "touchdown" space. And community – building a formal way for the tech community to meet on a regular basis and the hope that ideas and other companies will grow out of that network.
MS: And Karen gets to coordinate and implement all of this. This all came together very quickly. How did you get involved?
Warner: I'm exactly the people we're trying to keep here. I was an executive coach and that required me to get on a plane and go somewhere else. I looked around when I moved here and I really wanted to be part of the community. I come from the Boston technology corridor and worked for over two decades there in venture capital. And so I thought: what can I start in Beaufort? How am I going to do this? And my brother in-law said 'you need to know about the Digital Corridor' and introduced me to Stephen and some others. And just looking at what Earnest was doing in Charleston was pretty amazing - the amount of growth he's managed to achieve out of nothing. I thought I had some background that might be relevant to running this thing, so I threw my hat in the ring.
MS: What's been the biggest surprise?
Warner: I thought bureaucracy and city would be a problem, not knowing the government here. I've been amazed at how everyone is blocking and tackling to help me do my job.
MS: A little unusual for this city...
Murray: I think that when it comes to economic development, part of the community's been hesitant because for a long time the mindset has been smokestacks and pollution and anti-industrial development – and rightfully so. But I think technology has a certain sexy edge to it. Everybody uses technology. Your grandparents are on Facebook now. Everyone has a smartphone.
Warner: About smokestacks versus technology in Beaufort . . . one form of technology might be clean energy and helping to keep the area pristine.
Murray: We also have some pretty heavy in-fill goals for redevelopment downtown. We have areas nearby that are in pretty poor condition. And one of the things we found about the tech companies in Charleston is they can go in anywhere. Ernest has a company that went into an old Walmart, completely renovated it. Now it's their corporate headquarters and class A office space. While we're really trying to create opportunity for people, we hope to have a broader positive impact in the city and the region.
Warner: I feel like there's a nice balance struck between doing what Ernest has a vision for here and also making sure it accommodates Beaufort, because Beaufort is not Charleston.
Murray: The public/private partnership's important. Initially we'd talked about the Charleston model which was solely a public model that was sponsored by the city of Charleston. Ernest was a city employee. The lesson they learned was that it's important to have some separation from the government. While the city is a sponsor of the program, we don't own it. It's owned by a non-profit and my job is to block and tackle for Karen to help her be successful.
MS: So, this is a non-profit and part of the Charleston Corridor?
Murray: Right now, it's run under the Charleston Digital Corridor Foundation. And we expect that this year we will come out from under their umbrella and stand under our own Beaufort Digital corridor non-profit. To get going as fast as we could we thought it was a benefit to do it this way.
Warner: There's no question that it was a benefit to get this place renovated and looking like it does. Earnest had a vision and knew how to execute it and save a nickel, I must say.
Murray: One of the cool things about partnering with Charleston is that members get free use of the space in Charleston and vice versa. I think they sort of look at us as their retreat destination. We look at them like –
Warner: The mothership.
Murray: Lots of resources.
MS: Where do things stand three months in?
Warner: We have two residents right now and 24 members. Residents have to be members but you don't have to be a resident to be a member. We have people who offer services like intellectual property law that would be available to our clients. And we vet those partners. Ernest and I really screen to see who's here to provide a unique service to our membership. Members tend to be companies and they pay a membership pro-rated on their revenue. And we have investors. Investors can be anyone.
We get a lot of people walking in who've been in Beaufort a long time who have the background and the experience to help. The best way to help is to become a member. You're going to get all the communication and know what's going on and see for yourself where we need help and jump in. We've got a lot of people aged 59 and up with a lot of experience who could be mentors. In 2015, 20 percent of the companies started were started by people in their 60's.
Murray: The real goal here is to create great jobs and create companies out of the community to give the folks who have to work here the type of living they need to offset this high cost of living. I've often said that most people don't move to northern Beaufort county because they want to live in a sleepy retirement village. They move here because we're a very diverse, authentic place – a real hometown. My fear is that if we keep losing our young professionals to this mass migration of retirees at some point we wake up and we are a sleepy retirement village and I don't think anybody wants that here.
You know, before the tourists came and brought their high cost of living with them you could hack out a living here and make it work. That's changed. The economics just don't work. I think this is us trying to shape our own destiny rather than letting destiny shape us.