How some cities are luring startups with real estate developments
One reason that major cities are able to attract the most talent is that they have wide variety of work options — and that means a variety of working space options from traditional offices to startup-friendly co-working venues.
The big picture: Not so long ago, it was a big deal for a co-working space to open up in smaller or "second-tier" cities because it signaled there was finally enough demand from newcomers looking for a cool place to work.
- Now the focus is to create bigger, branded, physical places to attract more companies, entrepreneurs and investment, according to a new "Rise of the Rest Ecosystem Playbook" put out by Revolution.
- Between the lines: These developments are using the "if you build it, they will come" strategy, hoping to lure people wanting to escape the high prices of the usual hot spots.
The playbook breaks down four archetypes that are being built across the 43 cities that Steve Case and Revolution have visited during Rise of the Rest tours over the past 5 years.
"[E]very city, without fail, is trying to figure out how to retain the talent they have, encourage people who have left to return, and recruit new people to consider moving there," Case emailed.
1. Anchor Tenant: A key company that attracts others to cluster around it (like in a mall).
- Detroit: Quicken Loans moved it's headquarters from the suburbs to struggling downtown Detroit, and CEO Dan Gilbert opened a real estate arm (Bedrock) to acquire properties in the central business and financial district to house regional offices of Amazon, Twitter, Google and others.
2. Innovation District: A cluster of startups, incubators and companies, sometimes in partnership with local government.
- York, Pennsylvania: The city is re-developing a 2-acre site to house robotics research, labs, alternative manufacturing, offices and temporary housing.
3. Vertically Integrated: Complex or high-rise with space for accelerators, labs, co-working and corporate offices, designed to let startups move through "stages" in one place.
- Columbus: An old shoe factory was turned into a 65,000 square-foot facility for working areas, classrooms and workshops. The tenants were curated to house venture capital firms, lawyers, marketing agencies and other professional services to support the businesses setting up shop there.
4. Work-Live-Play: Mixed-use development that includes residential, commercial and entertainment and is pedestrian-friendly.
- Orlando: Health-focused Lake Nona is a master-planned community that houses operations for Johnson & Johnson, Veterans Health Administration, and Nemours Children's Hospital.