Month: February 2018

The University of Virginia’s i.Lab is where good business ideas go to become great ones.

Local entrepreneurs and their teams apply for the incubator program in January, and if they’re one of about 20 groups selected after a Shark Tank-style round of pitches, they’ll be admitted into a 10-week program where their start-ups are provided a $5,000 grant, workshops, mentorship and workspace, followed by ongoing support from the folks on staff at the i.Lab.

Since the summer of 2013, the lab has provided more than $600,000 in grant funding to more than 100 business ventures, according to its director, David Touve. He says, long-term, its programs have racked up nearly $1.5 million in grants to more than 225 ventures and their 400-plus team members over the past 18 years.

At the i.Lab, the entrepreneurial spirit is contagious.

A bright green wall on the left side of the lobby is likely the first thing you’ll notice. This is the “idea well,” where ways in which people can help others are brainstormed onto white pieces of scrap paper and hung from floor to vaulted ceiling. For example, the one that’s positioned the highest says, “I can reach high places.”

The lab looks a bit like Charlottesville’s own miniature Googleplex. Some walls can be written on and some are made of glass. Some work spaces are intimate and some are wide open and intended to be shared. And don’t forget the pitch room, where a traffic light is programmed to respond to the sound of clapping. Going for the green light? Your pitch had better get a hearty round of applause.

Sandra McCutcheon is the i.Lab’s program manager, and Touve took over as its director in the summer of 2016 when he transitioned from directing the Galant Center at the McIntire School of Commerce—where he taught and developed undergrad courses and programs such as the uber-popular entrepreneurship minor—across Grounds to the Batten Institute for Entrepreneurship and Innovation at the Darden School of Business, which funds the i.Lab.

Secret sauce

On a recent trip to the think tank on Nash Drive, Touve gives a tour of the 9,500-square-foot building, bopping in and out of classrooms and workspaces that he says are unusually quiet. He enters what he calls the “tinker space,” where Babylon Micro-Farm founder Alexander Oleson is studying one of his hydroponic systems—or a “shelf to grow organic produce in restaurants,” Oleson explains.

The incubator program that Babylon was initially a part of launched around 2000 and has continued to grow and transform ever since. Its director, Jason Brewster, says something like 80 percent of Charlottesville founders or ventures were nurtured by the i.Lab in some way in 2016.

“Where I think we’re doing a good job is filling the funnel,” he says. “Annually, i.Lab alumni are at the forefront of capital raised in Charlottesville.”

While in some cases, Brewster says those funds are accumulated by ventures that went through the incubator program, in other cases, the capital is raised by the founder of an i.Lab start-up’s subsequent company. For this reason, he and other mentors often focus on the founders themselves, rather than their actual businesses.

“Initial ideas fail,” he says. “Considerable trial, error and refinement always precede success. Focusing on individuals is critical to ensure founders understand how to navigate the company genesis.”

Application deadlines have passed for this summer’s incubator program, but the staff encourages local entrepreneurs to check in next year, no matter their age.

When asked about the range of entrepreneurs who’ve made it through his program, Brewster doesn’t mince words. “Some are either unable to drink or collecting Social Security.”

The start-ups that mentors hand-pick to participate in i.Lab programming often grow to have a magnanimous impact.

“Some of these ventures have gone on to raise millions, even tens of millions of dollars in venture capital,” Touve says. “Other ventures provide mentoring connections or music training to hundreds of students each year, or inspire thousands of attendees through a festival each April.”

Perhaps the most well known idea to launch out of the i.Lab is the last one Touve refers to—the Tom Tom Foundation, which hosts an annual festival that brings a massive accumulation of events, speakers and concerts that celebrate entrepreneurship, culture and innovation to Charlottesville each spring.

Tom Tom founder Paul Beyer says his company had just wrapped up its second festival when he was selected to participate in the incubator program, and he called on mentors for help in determining his nonprofit’s business model and organizational structure in 2013.

There, he formed invaluable relationships with leading investors and entrepreneurs, he says.

“The i.Lab connects the networks that you’re going to need in order to succeed,” Beyer says. “I think that’s what’s so great about it—it’s a confidence builder.”

 

Out of the i.Lab

Here are a few recent businesses the i.Lab has thrown its support behind.

Contraline

It’s an inserted birth control much like an IUD, but here’s the catch—it’s for men. Contraline believes contraception should fit seamlessly into the lives of couples, so CEO and co-founder Kevin Eisenfrats, a former student of nanomedicine engineering at UVA who is developing a nonsurgical, nonhormonal and reversible procedure known as a vastinomy, where a type of hydrogel is injected into a man’s vas deferens to block his sperm during ejaculation. The company has raised more than $3 million, and the procedure is targeted for approval in 2021.

Imbibe Solutions

Who knew laboratory tasting could be so delicious? Owner Audrey Reid, who holds a master’s degree in gastronomy from Boston University, combined her love of science and food to create a quality control lab for local craft breweries, wineries, cideries and distilleries. Businesses in the industry are required to test and publish their alcohol content by volume, and those operating in the area without their own mini-labs didn’t have a way to do so. That’s when Reid stepped in, also offering microbiology, sugars and water quality testing, which can drastically affect the flavor of a craft beverage.

Beanstalk

“Big impact. Small footprint,” is the credo of this startup founded in 2017 by UVA School of Engineering and Applied Science grad Jack Ross and his brother, Michael. The duo started the agricultural technology company, called Beanstalk, to feed increasing populations with little to no food supply by way of what they call a vertical farm. The indoor-friendly farms are renewably powered to grow greens like spinach and kale in a vertical, completely contained system of nutrients and oxygenated water. Scalable and sustainable, the product reduces water usage by 95 percent and requires no pesticides.

InMEDBio

It’s not a Band-Aid, it’s a Phoenix-Aid. This company, founded by Ashwinraj Karthikeyan of the School of Engineering and Applied Science’s class of 2018, is credited with creating the better bandage. The Phoenix-Aid is touted as a safe and cost-effective wound dressing that’s designed to prevent infection and speed up the time it takes for chronic wounds to heal. InMEDBio has a global reach, and is focusing its efforts on treating diabetic foot ulcers, especially for medically underserved and socio-economically disadvantaged populations.

Relish Careers

What’s harder: getting an MBA or finding a job after? Founders Sarah Rambaugh and Zach Mayo, two MBA students at the Darden School of Business, created a service in 2014 to address the latter. At Relish, they help put job candidates in touch with employers by using customized networking and data analytics tools to pair a network of top job candidates with employers from across the globe. It’s like Match.com, but for hiring.—SB

Bicycles are a great way to get around. They’re economical, eco-friendly and good exercise. But their design never made much sense to television and film editor and director—and lifelong bike rider—Scotty Wilson. 

Bikes are big, bulky and not easily transported from one place to the other (unless the bike is the transportation); they’re a pain to put into a hatchback and store in the garage.

With all this in mind, Wilson designed the Respect Cycles Mini Velo: a full-size bike frame with smaller-than-usual wheels. It’s easy to ride, store, transport and customize. Initially geared toward women and children who typically measure for smaller bikes, the Mini Velo has proved popular among people of all ages and genders. Wilson’s 8-year-old rides the same bike as 6-foot-tall Wilson.

Wilson says that since starting Respect Cycles in 2014, the company has sold about 2,000 standard Mini Velos out of the company’s Charlottesville warehouse, quite a few of them to touring musicians and their crews. Crew members for Rihanna, Jay-Z and Beyoncé own Respect Cycles…and from time to time, the stars will pedal them around, too.

Talking with Chris Newman about the farm he runs with his wife, Annie, you get the feeling you’re glimpsing the future.

Newman likes to think ahead; he was still in his 20s when he and Annie began planning to become farmers after retirement, which was decades away. They lived in Washington, D.C., then; he worked as a software engineer and she managed an art gallery. But the stress of his job soon threatened his health, and in 2013 the Newmans decided to walk away from their city life. They returned to Annie’s hometown, Earlysville, and founded Sylvanaqua Farms.

Plenty of young couples have made a similar move, but not every upstart farmer has the makings to take over Joel Salatin’s role as spokesperson for a new agricultural paradigm. Newman, in fact, counts Salatin’s writings as an original inspiration, and attended training at Salatin’s famous Augusta County farm, Polyface. But his philosophy and practice of farming have since diverged from Salatin’s in a few important ways. And because Newman seems to possess his onetime mentor’s knack for PR—he’s an ace writer and an outspoken visionary—the next generation of farmers may well be looking to Newman as a guiding light.

But first, back to the farm. What Sylvanaqua has produced so far is high-quality meat—chicken, heritage-breed pork, duck—plus eggs, and buyers have included restaurants, farmers market customers and “members” who pay up-front to get discounted prices. That’s all fairly standard, and the Newmans are certainly working hard to make their business float (and raise two daughters at the same time).

But they’re also animated by a longer-term vision based on permaculture. “We want to prove you can do tree-based agriculture,” says Newman, “and move to where we’re not a ‘livestock farm’ but we have livestock supporting the production of plant crops.” What that might mean in central Virginia’s ecosystem is a herd of pigs that will eventually be harvested for meat—and in the meantime, they’re rooting around among chestnut and hazelnut trees, tilling the soil and eating windfall apples that would otherwise be wasted. Animals and plants become symbiotic in a way that mimics natural systems.

Organic, in this model, is a given, but isn’t really the point. “We are for making sure that food is in sync with the ecology where it’s grown,” says Newman. “Permaculture is what indigenous people were doing in precolonial times all over the world.” It’s a personal connection for him, stemming from his Piscataway-Conoy and African-American heritage.

The “food forest” represents Sylvanaqua’s next big expansion. While they’ll still serve Charlottesville-area customers, this year they’ll move their base of operations to Stratford Hall, a 1,900-acre historic estate on the Northern Neck, so as to be closer to several major cities. They’ll be scaling up in a major way—increasing turkey production, to name one example, by 1,000 percent. The estate’s large swaths of woodland and pasture will provide enough room for Sylvanaqua to build the food forest and grow their business for, they figure, many years to come.

The notion of a place like Stratford Hall—the birthplace of Robert E. Lee—doubling as a working farm is one of the things that makes Sylvanaqua a bit radical. Instead of owning land, the Newmans have opted to lease acreage and/or partner with institutional or public landowners. This is more financially feasible for them but also, Newman says, will help Sylvanaqua serve as an example for other would-be farmers, including those who don’t have much—or any—wealth to start with. Eventually, he hopes, “Younger farmer entrepreneurs can take an internship with us, then enter a partnership with a landowner and start their own operation without having to take so much of the terrifying risk.” With permaculture farming, he adds, a state park or historic estate could still serve recreation or conservation uses while producing food.

While Sylvanaqua is still enough of a start-up that Newman hangs onto a freelance software gig, he’s got no shortage of ambition, seeing his farm as part of a broad-based solution to a raft of problems, from urban food deserts to a lack of people of color entering the farming profession. “How do we change the food system into what is ecologically responsible and socially responsible?” he asks.

In December, the Republican-led Federal Communications Commission voted to repeal its own 2015 ruling about how Internet service providers should be regulated, saying it was eliminating “heavy-handed micromanagement” of the Internet. Many users saw it differently, and lamented what they saw as a loss of important safeguards.

At the heart of the FCC’s ruling is an important question for the future of the web: Should Internet service providers (ISPs) be classified as common carriers? This might seem like an obscure legal debate, but it has profound implications for what you get to see on your laptop or smartphone, and perhaps more importantly, how much you’ll pay for the privilege.

Giving Internet service providers common carrier status means the agency can regulate how ISPs deliver content to users, and what kinds of business practices they’re permitted to engage in. Net neutrality advocates see this as important for ensuring the Internet remains a level playing field for everyone, and to ensure that ISPs don’t engage in practices they believe are abusive for consumers and businesses.

With the current gridlock in the Republican-controlled Congress making any improvement to these protections improbable, consumers and businesses will ultimately have to vote with their dollars to see the Internet they want, and support providers that want to preserve a level playing field. Fortunately, most of Charlottesville enjoys the comparatively rare case of having more than one Internet service provider. But the rest of America doesn’t; only 24 percent of communities in the United States have more than one high-speed broadband option. Everyone else is either under the yoke of a monopoly or doesn’t have access to broadband at all.

One local provider, Ting, says net neutrality is important to them. “We know our customers want this, and we want to double down on our commitment to a fair and open Internet even in the face of changing regulations,” says Monica Webb, Ting’s director of government affairs. Ting lobbied against the FCC changes and has pledged to operate as if the protections were still in place.

For its part, Comcast, the largest provider for Charlottesville, says that going forward it won’t “block, throttle or discriminate against lawful content.” And that may well be true. But without the FCC’s net neutrality protections, many of those promises are no longer enforceable by law.

Still, this all seems pretty hypothetical. After all, most people don’t think we live in a dystopia. Is this much ado about nothing?

Absolutely not, says Barbara Cherry, a legal expert on net neutrality and a professor at Indiana University. “The loss of these protections opens the door to a wide range of serious abuses,” she says. Cherry argues that larger telecoms prefer the regulatory restrictions removed, because it would enable them to pursue new kinds of business models, and potentially capture more revenue.

The problem for consumers and small businesses, Cherry says, is that these business models are often counter to how we might want to access the Internet. For example, an Internet service provider could adopt a policy of charging customers extra if they want to watch videos on streaming video sites, instead of treating all data as equal.

That might be better for the provider’s bottom line, but it’s probably not something consumers or businesses will want.

John Feminella is the co-founder of analytics startup UpHex and an adviser at Pivotal. He lives in Charlottesville and enjoys solving difficult technology problems.

The technology community is notoriously secretive, but there’s one thing Charlottesville techies can’t hide: The local innovation infrastructure is growing at a rapid pace, with two new co-working spaces set to open on the Downtown Mall this year.

Construction is expected to begin on the Charlottesville Technology Center, which will go on the former Main Street Arena land parcel, by the end of March. And Vault Virginia, which will occupy the former Bank of America building on the mall, will be full by the end of March, according to founder James Barton.

The new spaces will join established open work areas like Studio IX (also operated by Barton), HackCville, UVA’s i.Lab and OpenGrounds, Tinkersmiths, The Bridge Progressive Arts Initiative, the Old Michie Building, the Charlottesville Technology Incubator and Ten Flavors Studios.

“Charlottesville is really unusual in that, on a per capita basis, it has the seventh or eighth highest venture capital flows in the country,” says Tim Miano, who founded innovation infrastructure firm SP@CE in 2014. “Charlottesville swings above its weight class. …It’s why I moved here and started the project. There is this clear opportunity to develop a large-scale innovation hub.”

In addition to deep-pocketed investors, Miano points to UVA’s status as an innovation anchor, a “shockingly mature” biotechnology community and a high standard of living as reasons C’ville could become the next great tech hot spot in the mold of a Boulder, Colorado, or Chapel Hill, North Carolina. But the growth of the local innovation infrastructure hasn’t been without its bugs—shared workspace stalwart OpenSpace closed in mid-2014, and Miano says the city has “structural limitations” due to its population.

The crown jewel of the new local tech spaces is the Charlottesville Technology Center, an ambitious 140,000-square-foot office structure driven by development firm Taliaferro Junction and Jaffray Woodriff. Miano says SP@CE helped scout the project but isn’t currently involved.

Taliaferro purchased the building and land occupied by Main Street Arena for $5.7 million, according to a press release issued last year, and solicited proposals from architecture firms to design a “new building.” A spokesperson for Woodriff, who declined to be interviewed, said demolition would begin at the end of March. Former tenants of the building, including concert venue The Ante Room and restaurant Escafé, have confirmed March will be their last month in operation.

Barton says his Vault Virginia project is nearing launch, with several anchor tenants he declined to name slated to fill the third floor. He expects the second floor of the building to be next to fill, occupied by smaller firms and sole proprietors, followed by the first floor, which will feature common spaces and a restaurant.

Barton and Miano, who spoke in separate interviews, agree their projects are vastly different and shouldn’t compete for tenants. And the developers expect the spaces to work in concert with the more artisanal tech work areas around the city.

But what will be the effect of all this new tech-focused terrain? Andrew Montalenti, a Charlottesville resident and founder of New York-based internet traffic analyst Parse.ly, thinks such work areas can contribute significantly to the local innovation economy.

“There are kind of two groups in Charlottesville from a tech standpoint,” he says. “Those that are affiliated with local startups, and then people like me that are affiliated with another organization, remote digital nomads that happen to be based here. The co-working areas serve us, and the dedicated spaces serve the others.”

So why did OpenSpace close its doors, and how will the new spaces avoid the same fate? For one thing, it’s unclear a lack of profitability contributed to OpenSpace’s undoing. The company’s founder, Jeff Gunther, officially cites his own relocation as the reason for the business’ closure, and Barton suggests the concept may have been before its time.

Now, he thinks the time is right.

“A rising tide lifts all boats, and I believe that will be the story for Charlottesville,” Barton says. “I’m proud of the impact that Studio IX has had, and Vault Virginia will be another part of the infrastructure that supports progress and thoughtful development.”

Making room

Just how will the Charlottesville Technology Center’s 140,000 square feet be allocated? Here’s the breakdown by square footage.

60,000 Anchor tenant

40,000 Tech/venture

20,000 Smaller tenants and lab

10,000 Retail

10,000 Event/presentation/common area

Thinking of making the leap to entrepreneurship in Charlottesville? Your first stop ought to be the Office of Economic Development, which offers a broad menu of services to would-be business owners. We spoke with Jason Ness, business development manager, about what he and his colleagues can do to nudge your startup dream closer to reality.

How did you get into this line of work?

I’ve been in Charlottesville about 10 years and initially worked in workforce development. I transitioned into small business development almost six years ago.

When someone comes to you with an idea for a small business, where do you start?

The first thing is to assess where they’re at. We get people in different stages, from “I have an idea” to “I have funding and a location.” We can help with data and demographic information, competition analysis and marketing plans. If they’re more advanced we have some internal programming.

What are those programs about?

One is the microgrant program called Advancing Charlottesville Entrepreneurs (ACE). These are competitive grants given quarterly for companies with fewer than five employees. They go toward everything from equipment to marketing plans. It’s incredibly unique as far as local government giving away grants. For example, Pearl Island Catering received grant funding from ACE to wrap their van, the Flavor Wagon.

The other program is the GO HIRE program. GO stands for Growing Opportunities. City-based businesses can hire city residents and we will subsidize 50 percent of their wages for the first eight weeks. That lessens the burden on the businesses for that onboarding phase. These are semi-skilled jobs and the average wage is $14 per hour. City businesses can also get help with credential training, to help employees gain skills to make them more attractive to wage raises and promotions. It’s customized to the business—we’ve reimbursed trainings on AutoCAD, solar energy education and CDLs [Commercial Driver’s License].

What are the other local agencies that you partner with?

The Small Business Development Center provides one-on-one business consulting and classes. The Community Investment Collaborative started six or seven years ago to help under-resourced entrepreneurs. They have a 16-week course on how to start a business, and they give out loans.

What do entrepreneurs often need help thinking through?

Generally most people already have a career, so how do they keep going with that while building their business? CIC is great for that with their nighttime classes. A lot of people have questions about where to get money. They may be relying on personal credit, which can be an advantage or a disadvantage, depending on your background. We walk people through getting a business license, plus zoning and finance regulations. As Three Notch’d Brewery was looking to expand and outgrowing current zoning regulations, we helped write a zoning amendment to help them stay within the city.

Any other services your office provides?

We’ve recently started a “Made in Charlottesville” branding campaign to promote businesses that design and manufacture products in the city. We have up to 75 businesses in three categories—products, food and beverage and technology. They range from WillowTree, the largest, down to one- or two-person shops.

When Dr. Casey Kerrigan, who was working for one of the top three shoe manufacturing companies in the world, realized her employer wouldn’t be able to develop the biomechanically engineered shoe that she knew she needed to make, she quit her job and did it herself.

“I had to figure out how to do it if I wanted to do it right,” she says. “I came to the realization—and they did, too—that what I wanted to do was go back to zero. They could use some of the technology I had, but I really needed to change the actual shape of the shoe.”

Kerrigan is the chairman of OESH Shoes, the only company devoted to making footwear designed for women on principles of peer-reviewed medical science, which has disrupted the industry and established its own cult following since 2011. In fact, one OESHer—a title given to loyal customers—has just bought her 29th pair.

Perhaps you’ve heard Kerrigan’s name before. The Harvard M.D. is well known for her 20 years of research on human motion and forces during walking and running, and for being the woman who first discovered the link between wearing high heels and knee osteoarthritis in 1998, when she was invited to appear on ABC’s “20/20” and in the pages of the New York Times and Time magazine.

Kerrigan was recruited to be the chair of the UVA School of Medicine’s department of physical medicine and rehab in 2002, and she “published like crazy” until leaving that job to pursue one in the footwear industry in 2009.

Step by step

A row of 3-D printers lines the wall in Kerrigan’s small Dale Avenue factory, where countless research articles she’s written are tacked up on display next to a dozen of her footwear designs. Shoeboxes are stacked from floor to ceiling.

She pours a handful of rubber pellets—the same kind used to make bouncy balls—into the machine, turns it on and stands by as it begins to trace the outline of a pair of sandal soles. It’ll take about four and half hours to print these shoes, though the scientist says she’s developed a new auger that will cut that time down by at least two-thirds. These scientific techniques are increasingly being used by several agencies, like shoe hero, to boost the sales. Then a human will strap the shoes—everything from sandals and sneakers to clogs and an alpargata-style shoe—and they’ll be up for sale.

She explains that the OESH approach is all about the sole. Most athletic shoes are designed using toxic foam materials to cushion heel impact, and control foot movement with a one-size-fits-all approach, but Kerrigan says peak stresses and strains on the body don’t occur during heel impact and it’s not healthy to force all feet into the same generic form.

When an OESHer takes a step in Kerrigan’s perfectly flat footwear, the elastic spring compresses and releases energy that supports the natural movement from that step to the next.

Target audience

Why just for women? “Frankly, women need these shoes the most,” she says, because females have twice as many foot, knee, hip and lower extremity issues than men. “There’s always some guy who asks, ‘When are you making men’s shoes?’” Kerrigan adds. “I’m sorry, guys. I’m taking care of women first.”

At OESH, every year has been a record year, and Kerrigan says the ability to scale up, on demand, “is just ridiculous.”

While she has another small facility in Waynesboro, the biomechanist says her company has outgrown it. She’s now working with a shoe factory in China where she could potentially replace outdated machinery with her cutting-edge technology and make “gobs of them.”

As for scaling up domestically, Kerrigan says OESH employees build the 3-D printers themselves and have all the equipment on-hand to build a new one in less than three hours. The shelves that hold her current machines are extendable, and she’s considering making a few dozen more to total 42 printers in just her Charlottesville workshop.

Because she’s also developing technology to increase the speed of manufacturing, Kerrigan says each printer will soon be able to make 20 pairs of shoes a day—which could soon have all the biggest footwear manufacturers shaking in their boots.

“Do the math,” she quips. “We are now rivaling any factory in China with just a wall of printers here in Charlottesville.”