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The groundwork has been laid in the region to foster the growth of the technology industry and we appear to be on the verge of a major breakthrough.
Meredith Hundley is blunt about the intention: “These are productive collisions. We’re trying to bump into each other.”
“We” includes a litany of organizations whose primary goal is to invigorate the region’s business and technology climate. Among them:
- Virginia Tech’s Corporate Research Center (CRC), a 32-year-old technology park that has grown exponentially, has 36 buildings on 210 acres and 200 companies employing 3,300 people.
- Regional Acceleration and Mentoring Program (RAMP), mentoring and some funding for developing businesses.
- The Advancement Foundation, Innovation Mill, The Gauntlet, The Hive are Vinton-based interlocked mentors/funders for startups.
- Valleys Innovation Council (VIC), the latest and most successful iteration of the Roanoke-Blacksburg Innovation Network, helping create an innovation ecosystem.
- The Virginia Innovation Partnership Authority legislation had passed and will now await the governor’s signature. Its intent is to “support the entire life cycle of innovation from transitional research, to entrepreneurship, to pre-seed and seed stage funding, acceleration, growth and commercialization …” The program is expected to “assist … in identifying entrepreneurial strengths, including the identification of talents and resources …”
- Small Business Development Councils (SBDC) help startups find their footing.
- CoLab, business and co-working space in the Raleigh Court area of Roanoke.
- Area colleges have become leaders in working with the business community, especially the community colleges.
- GoVA, a state fund for innovation that has been consolidated and dispensed regionally by business influencers.
- Hundley is chief program officer for the Valleys Innovation Council (VIC), an outcropping of several false-start predecessors and one that seems to have finally gotten it right.
She uses Torc, a Blacksburg company with 120 employees whose genesis dates to 2005, as the best example. Several Virginia Tech graduate students competed on an international stage in an Intelligent Ground Vehicle competition, which they swept, ultimately winning a $1 million grant, leading to Torc’s founding.
Torc, from Day 1, has been an international leader in self-driving truck technology and although Daimler had 1,000 workers in Stuttgart, Germany, working on that, it bought a majority stake in Torc in March of 2019 in order to find success in that area, says Greg Feldman, director of VIC.
Torc, Hundley says, “is the poster child for what we’re trying to do. … It is our regional unicorn.”
Hundley says the ultimate goal is to “work together because we have a shared purpose. It creates a smooth pathway to a sturdy, solid technology component of the region’s economy, one that is staying abreast of national trends. If we do the ecosystem right, we create more stories like Torc.”
The Money Challenge
Money is flowing from a number of sources but remains the most significant problem overall. Much of the infrastructure is in place and is growing. President/CEO Joe Meredith who joined the young Corporate Research Center in Blacksburg in 1997, found four buildings and a few scattered employees at the fledgling facility. He retired in February looking at 36 buildings on 210 acres with 3,300 employees and a huge infusion of dollars into the region’s economy.
Greg Feldman, executive director of the Valleys Innovation Council (VIC), says the support system “is in the best spot in my working lifetime. We have evolved a support mechanism,” but “access to capital” remains a sometimes-elusive element. He points to the $15 million Virginia Tech/Carilion fund, “episodic angel activity” and money funneling to all the support organizations, a lot of it going to individual startups and slightly more mature businesses as encouraging.
Victor Ianello, founder of Synchrony and Radiant Physics, advisor to Carilion on innovation and co-chairman of the VIC, says, “Our goal is to increase the activity and resources in the innovation ecosystem.” He says success is measured by formation and investment in startups, commercializing intellectual property, number of employees and the number and size of exits (or sales).
He points to RAMP, which is “financially supported by higher education institutions, local governments, and private businesses. In addition to the structured learning that is offered in accelerating the growth of start-ups, each company is assigned one or more mentors … local entrepreneurs that have experience with starting, growing, financing, and exiting from technology companies. Developing and fostering this volunteer network of mentors is critical to the success of RAMP.”
RAMP director Mary Miller (founder of the Blacksburg tech company Interactive Design and Development) says, “In addition to our 16-week RAMP-in-Residence e program, we sponsor pitch clinics across the region every other month. The idea is to have a ‘go to’ place to find help. The RAMP-in Residence program is focused on helping early-stage technology companies get the help they need to grow.”
The Advancement Foundation in Vinton has a similar mission, but with startups. Annette Patterson, who founded the foundation and its Gauntlet competition for investment, says the Gauntlet “is a really good tool to attract and retain talented entrepreneurs.” It has grown from 15 competitors in 2014 to 170 from 15 localities, 18% of them in technology this year. It featured 150 mentors and 50 speakers in 2020 and is Virginia’s largest business program and competition, according to Patterson.
Regional Tech Hub
A good bit of money is funneled through the Advancement Foundation, chunks both large and small. “Over the years,” says Patterson, “our focus has been on high-growth industry, and technology is one of them.”
Ianello, who founded, grew and sold two technology businesses, has a clear view: “It is critical that all the available resources in the region collectively contribute to helping grow our base of technology and biomedical companies in the region. Unfortunately, this region doesn’t have large, well-endowed foundations ... However, we do have a number of regional players that collectively can contribute time, money, experience, and leadership.”
PhD student Samantha Steidle, former executive director of Roanoke’s CoLab, says, “Ten years ago, a tech entrepreneur had two or three pathways, but today has far more options. Tech entrepreneurs have a more inclusive and collaborative community designed with the entrepreneur front and center.”
Greg Feldman insists that “we’ll never displace the Silicon Valley, but we can be a regional hub” for technology. Virginia Tech is a clear national and international leading light and Michael Friedlander, executive director of the Fralin Biomedical Research Institute, has attracted significant talent to VTC.
VIPA is expected, at the state level, to support a “collaborative, consistent and consolidated approach … in identifying its entrepreneurial strengths, including the identification of talents and resources that make the Commonwealth a unique place to grow new innovation-based businesses.”
The Players
Some of the important players based here include:
BlockOne, an international cryptocurrency superstar company co-founded by Virginia Tech grad Dan Larimer, which has reportedly raised $3 billion. BlockOne has its own 33,000-square-foot building in the CRC.
GE Digital, formerly Meridium, is an asset management predictive software used by oil refineries. GE paid nearly $495 million for the company, which employed 500 people.
Power School, formerly Interactive Achievement, is educational technology testing software.
Torc, is a driverless truck company founded by Virginia Tech graduates.
The Fralin Biomedical Research Institute, which is building a new $50 million building and bringing in hundreds of high-end employees.
Each of the proprietary products was developed for specific target markets, says Feldman. “Companies have been laser focused on their addressable markets and each is riding a market wave.” In the 1990s, says Meridium founder Bonz Hart, “We had the raw material (students), and over time the local universities changed their curriculum to become more relevant to the software industry.” It paid significantly.
Tracy Wilkins, co-founder in 1989 of TECHLAB, says, “We are totally focused on our relatively untouched niche [microbiology of the intestinal tract]. Other companies produce a range of products in all sorts of areas, but we are very focused.” The company now has 150 employees in Radford and at the CRC.
Says Feldman, “The region is small—about half a billion dollars isn’t big—but we are competing for the best talent with the major technology players.” In the most recent reporting period, R&D funding in this region was at $521 million and “we want to get to $600 million or $750 million” shortly.
The Fralin Biomedical Research Institute will employ 430 people in 30 research teams, Feldman notes, and those employees are often coming from Harvard, Stanford and from overseas. It is “a big engine that will influence technology growth in the region.”
Feldman compares this region to several others with major research universities (rated R-1, containing 131 research universities): Charlottesville/UVA; Lafayette, Indiana/Purdue; and Chapel Hill/UNC.
The question front-liners are asking, says Feldman, is: “What innovations are out there that we can use?” The answer is vital to the future of the region.
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