Accelerating Hawaii: Tennessee’s CO.LAB Started Small, Focused on Local Ecosystem

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Note: “Accelerating Hawaii” is a continuing series on the impact, importance, and structure of Hawaii’s startup accelerators and incubators. While some may be backed with private investment, at least two will be built using public funds. With startup accelerators being a relatively new concept, and totally new to Hawaii, I’ve started talking with local stakeholders and successful accelerators throughout the country to share ideas, set expectations, and elevate awareness for Hawaii’s entire startup ecosystem.

This post follows a conversation with Sheldon Grizzle, the “Air Traffic Controller” at Chattanooga’s CO.LAB accelerator (aka “The Company Lab”). CO.LAB, a non-profit, accelerates all types of businesses, with just a few tech companies in their program.


Since I’ve started talking with all of these incubator and accelerator managers and experts across the country, I usually start by asking them how they got into this line of work. Sheldon Grizzle, CO.LAB’s founder and director, had a pretty unique answer:  “I failed my way into it.”

Well, as they say, any failure should be viewed as a learning experience. However, what Grizzle then did with that experience was merge his entrepreneurial mindset with his community-service aspirations, and developed what he would have liked to have had before he set out on his startups.

CO.LAB“After we shut down our company, I didn’t know what to do next,” recaled Grizzle. “I knew that Chattanooga was a community I loved, but I didn’t feel it was a place that was conducive to starting my next venture. I wished that I had a resource that could have helped me avoid some silly mistakes and meet with mentors and others trying to build companies. It just didn’t exist in Chattanooga in 2007.”

Start Anywhere, But Start

So Grizzle started from scratch and worked with Chattanooga’s CreateHere to develop a business planning workshop called Springboard, which was designed as sort of a pre-incubator that teaches local artists and artisans how to start and build a business, determine pricing, understand cash flow, etc. With that concept and focus, he was able to raise some money from a local arts foundation.

“We targeted creative entrepreneurs at first, but then it grew beyond that very quickly,” said Grizzle. “Before we knew it, we had contractors and plumbers taking the program, plus other service-based businesses. As the program grew, our participants became more diverse and we even started to see tech startups and engineers.”

Springboard, a for-pay program, has paid instructors and has been operating at break-even since day one.

“In just four years, we’ve had almost 600 entrepreneurs flow through the program,” noted Grizzle.

Adapting to the Community’s Needs

As different types of entrepreneurs were getting involved, Grizzle saw a need for Chattanooga entrepreneurs to connect with each other and with people that had “been there and done that.” He wanted to create something that would work for those looking to create higher-growth companies.

“We started holding events,” recalled Grizzle. “Startup Weekends are popular, but everyone at that event is a core believer.”

Grizzle figured that, to get something going, he just needed to, well, get something going.

CO.LAB's executive director
CO.LAB Executive Entrepreneur, Charlie Brock, talks about some of their initiatives. (Source: CO.LAB)

“Chattanooga has gone through some tough times in the past,” Grizzle noted. “But, we’ve been lucky enough to see an influx of investment and companies recently. Volkswagen just opened a billion-dollar manufacturing plant here. We know that will bring along with it a lot of manufacturing and logistics talent. We want to leverage that, take advantage of it, and make sure some of it stays here.”

Grizzle’s timing for launching an entrepreneurial hub coincided with some local foundations’ desires to see a more innovative and entrepreneurial economy. He was able to get enough capital together to get CO.LAB off the ground, which was to be a non-profit but is modeled as a true accelerator. For the first 18 months, CO.LAB relied exclusively on these foundations. Then the State of Tennessee got involved, creating a $50 million fund to spur innovations and tech transfer, and to co-fund venture capital funds. Of that $50 million, $2M was specifically earmarked for accelerators (same as in Hawaii).

Build Slowly, Build for Your Region

Early in the conversation, Grizzle explained that “Chattanooga” is their entire focus and mission, which helps them create programs that the startup community wants and needs. It’s that focus that has pushed Grizzle and team to create several programs, each with it’s own model and target:

  • Springboard, where they began, is an eight-week businss planning course designed for creatives and small business owners.
  • GigTank is a summer accelerator (this being the first summer) designed for teams with world-changing ideas that leverage Chatanooga’s first-in-the-Western-hemisphere 1 Gigabit/second internet network (what’s the latest on Hawaii’s gigabit initiative?). Eight teams are each given $15,000 in seed capital, and then the winner at the end wins a $100,000 prize! Teams can come from anywhere (only one this summer is local), but teams are expected to live in Chatanooga for the term (in empty university dorms, which is a great idea). Grizzle expects some of the teams to remain in the area after the session ends. (This concept is somewhat related to an idea for a “destination accelerator” in Hawaii, which Grizzle thought was “a great idea.”)
  • CO.LAB is their ongoing accelerator, offering $15,000 seed investments and mentoring over 14-week sessions.

The CO.LAB program is very loosely structured, but some items are standard, such as creating a customer profile, defining and understanding the market, etc. Grizzle said that they tried to take elements of their program from other well-known accelerators, but that some of the more popular programs essentially have no structure. Instead, they just connect you with five or ten fantastic mentors and provide a customized experience.

Role of the Accelerator’s Leadership

One issue that’s come up in Hawaii is around the qualifications of those planning to launch and run their own accelerators and potentially take a piece of the state’s money. There are many opinions and no clear winner as to which is best:  Some think that prior accelerator experience is required, some think it should only be launched by a super-successful entrepreneur or well-connected and well-funded investor, and still others think that a franchise-type model is better, such as opening a Founder Institute as a sort of accelerator-in-a-box. (Interestingly, Founder Institute’s vision is to “Globalize Silicon Valley,” something that even most people from Silicon Valley think shouldn’t be attemptedeven Guy Kawasaki.)

Experience Talks seminar series continued Wednesday with its second event, “Recruiting Your Team.”
CO.LAB runs an "Experience Talks" seminar series to give successful entrepreneurs a forum to share their experiences. (Source: CO.LAB)

Grizzle, on the other hand, had none of that experience, didn’t follow a set model, and was still successful. I believe that was because of (1) his focus on the community and (2) in knowing when to bring in others with skills that he doesn’t have.

“My role here is to create an environment that gives our startups a better chance to be successful,” explained Grizzle. “My job is listening, trying to figure out how to connect these entrepreneurs with mentors, funding, education, other founders, potential team members. I see CO.LAB as a hub-and-spoke, where we are helping to coordinate all of these different teams and people and experts. We’re lucky enough to have a small staff to help run events and programs, so I spend most of my time making connections and helping entrepreneurs figure out their business models.”

Grizzle also realized early on that he himself didn’t have all of the connections needed to build a robust accelerator. CO.LAB recently brought on Charlie Brock , a former investment banker, as their “executive entrepreneur” to help lead their program and add or build the connections that Grizzle lacked. That includes connections in bigger markets, with larger startups, and with sources of investment.

“Charlie’s role is to increase our exposure on a national scale,” he explained. “He helps with fundraising, building relationships, bringing in other investors. It would have taken me many years to gain the necessary expertise and connections.”

Another member of the team is their program director, Enoch Elwell, a young entrepreneur and recent college grad who helps manage systems, events, communications, and special projects. It’s a key operational role, and one that Grizzle sees as a requiring a special skillset.

“You need an entrepreneur for that role, definitely,” stated Grizzle. “It takes an entrepreneur to really understand what these other entrepreneurs want and how they work. Plus, it gives him some credibility with the teams and the learning happens in both directions.”

The Mentor Challenge

As is common in the smaller regions, Chattanooga doesn’t have a vast number of mentors to fill the specific expertise that CO.LAB felt that they needed, especially around tech.

GigTank-ers stepped out of the CO.LAB offices
CO.LAB's GigTank teams took a field trip to visit The University of Tennessee at Chattanooga's SimCenter: National Center for Computational Engineering. (Source: CO.LAB)

“For the first 12 months, it was pretty much just mentorship and providing connections,” explained Grizzle. “Only in the past six months have we expanded to a structured process plus the mentors. Our tech-focused program, GigTank, leverages most of the tech mentors and experts in the region. That’s why CO.LAB isn’t entirely focused on tech.” (When I mentioned that Hawaii’s state-sponsored accelerators will include one focused on tech, Grizzle responded with, “That makes me nervous for you…”)

Grizzle did, however, have an easy time finding mentors. That’s in contrast to other’s I’ve spoken with who’ve said that they sometimes struggle to find enough of the right people to participate. But, Grizzle set up a self-selecting system, with a long application process for mentors that screens out those who might not be as serious or qualified. Take a look at their mentor application form; it’s huge! There’s a very detailed “skillset inventory” and open-ended questions about their interest, background, and what they hope to gain from the experience.

This attention to quality also gives would-be mentors the confidence to know that they are attaching themselves to a solid program with vetted experts.

Takeaways

When asked to give his advice to Hawaii’s budding accelerator scene, Grizzle gave the same good advice that everyone seems to give: Build it for Hawaii.

“Don’t get laser-focused on pure  tech or social media or whatever is super-sexy,” advised Grizzle. “Try to hone in on areas where Hawaii has key strengths, maybe hospitality or hospitality tech. There may also be opportunities in military-oriented startups.”

His final comment resonated the most, and has become a recurring theme from the accelerator managers I speak with who are outside of Silicon Valley:

“Don’t try to be something you’re not. Be your own thing.”