Charlottesville’s Surprising Start-up Strength

University_of_Virginia_Rotunda_2006By Peter Galuszka

It may be a throwback to the glam years of the 1990s, but there’s always been an aura about bright minds getting ideas and having the fortitude and guts to push them to fruition without the warm womb of a big corporation or university to keep them nice and safe.

Finally, after years of trying, Charlottesville appears to be on the brink of being just such a place. That’s the premise of a story I just wrote for The Hook, one of the small city’s alternative weekly that sadly is about to go out of business.

The evidence appears solid. There are about 200 startups now underway, mostly in life sciences and information technology. They handle making sure that hospital laboratories have diagnostic equipment that is accurate and help understand how neonatal babies might get sepsis and die. Others tap cloud computing in new ways.

Why Charlottesville? It’s a convergence of several things. The University of Virginia attracts bright people and has excellent graduate schools in law and business plus a well-regarded medical center. The Blue Ridge area attracts free-thinking rich people who have fled Wall Street for the bucolic hills near Monticello. These “angels” have the money to give to promising startups swashbucklers and are willing and able to take risks.

One of these is Jaffray Woodriff, a hedge fund who is from the area and spent some time in New York humping quants before returning home. Described by Institutional Investor as “The Monk of Managed Futures,” he strokes checks for start-ups he likes. As a U.Va. grad, he is sympathetic to struggling Hoos and even goes for the kinds of walkable, urban landscapes you read so much about on this blog. The downtown Mall makes it easy for young entrepreneurs to stroll around sipping lattes and run into friends where they can talk ideas and hatch deals.

Another aspect is the role of U.Va. Teresa Sullivan who has recognized the importance of the school being tech-savvy and pro-entrepreneurial. This is indeed a curiosity since she was attacked for be a tech luddite by members of her board who tried to get rid of her last year.

If anyone was a luddite, it was her predecessor, James Casteen, the fund-raiser par-excellence who didn’t get tech and wanted to keep Mr. Jefferson’s University safely reading history books. Getting conservative preppies to think big and take risks is a major step forward. The progress has been noted by none-other than Richard Florida, the Big Think guy you read so much about. Charlottesville somehow ranks highly in startups per 100,000 population.

Another curiosity I found in my reporting: Richmond is far behind on the start-up curve. That’s right. The self-proclaimed “Capital of Creativity” with its very own biotechnology research park is only now starting to get it together as far as angel or venture capital funding.

Why? One reason is the research done is very heavily focused on secretive –and deadly — corporations like Philip Morris whose products will help kill 1 billion people around the world this century, according to the World Health Organization. Other reasons seem to be a dearth of rich and adventuresome people and a sense of risk aversion among its traditionally very conservative mindset.

Virginia Commonwealth University seems to be gaining some traction under President Michael Rao. But if memory serves, stud duck prez Eugene Trani actually throttled research in favor of a bricks and mortar build out. This isn’t something one is likely to read in the Richmond Times-Dispatch or in the typically mindless blatherings of promoter-in-chief Tom Silvestri, former head of the local Chamber of Commerce. So what else is new?

What could evolve is a new tech corridor linking Charlottesville, a rising Richmond and Northern Virginia, which is stuffed with tech but doesn’t get mentioned because of its reliance on the military and government.

Hoo-Ville is apparently where the Bay Area and Boston were around 1975 to 1980. That may seem a disappointment but at least it is somewhere.

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17 responses to “Charlottesville’s Surprising Start-up Strength

  1. Things like this always a mystery – why some Universities become real incubators and others not but in most places with Universities there is some level of benefit to the community in myriad ways.

    And we’d be remiss not to also recognize the work in k-12 education that UVA is doing with PALS – an effort that supports the entire state – virtually every school system and to include private schools and home schooling.

    Teachers in many areas of Va now consult PALS assessments for their incoming students – to see where they are – to prepare to tailor a plan specific to that student – and they can do this also for students coming in new from other schools – in Va.

    Globalization is devastating any job that can be automated, computerized or robotized. The day when a kid can get a HS diploma and find a job in which he could raise a family in the middle class is fast going away.

    You either obtain – literally – a world-class, world-competitive education or you will spend your life working in service industries.

    Can UVA become further it’s role in pursuing these needs?

    that was the easy question, here’s the hard one:

    Should it become more autonomous or should it remain in its current relationship with Va Govt?

    Bonus: is it a good thing or bad thing for UVA to attract students without regard to how many are Virginia residents?

    Is nostalgia the enemy of progress in the 21 century ?

    • “And we’d be remiss not to also recognize the work in k-12 education that UVA is doing with PALS – an effort that supports the entire state – virtually every school system and to include private schools and home schooling.

      Teachers in many areas of Va now consult PALS assessments for their incoming students – to see where they are – to prepare to tailor a plan specific to that student – and they can do this also for students coming in new from other schools – in Va.”

      It would be very interesting to see how the PALS program has been promoted, how it has been received by those who can use its services, the terms and cost of its use, who and how the buyers of these services are putting them to use and taking full advantage of the power the PALS program offers, and how rapidly the PALS program is expanding.

      I do not know the answers to these questions. I did note that the program had been around since the late 1990s so there is a track record. Oftentimes fine programs fail to realize their potential benefit for reasons unrelated to the powerful benefits such programs can otherwise confer.

      • that’s fair criticism. The most amazing thing to me is the apparent dearth of competition.

        it makes perfect sense to use a granular periodic assessment process vice a year-end high-stake test – that looks back – at the end.

        I prefer looking forward.. and checking as you go… and making mid-course adjustments….

        PALS is likely NOT the greatest thing since sliced bread.

        I also pointed out a private sector product in use called STAR

        which complements PALS ….

        the point is that periodic granular assessment helps kids without subjecting them to the trauma of high-stakes testing…

        and I see it as having promise for charter/choice/private/voucher/home schools also – which will introduce not only competition but a standard way to measure – across the different school options -which I consider absolutely critical as opposed to just assuming that any/all non-public options are better without a scintilla of evidence.

        • These are excellent comments.

          They highlight the need for testing that focuses on the needs and progress of individual students, rather than the testing of groups, classes, or schools. We need to stop treating kids as products to be tested and graded in batches. Children do not come that way.

          Treating testing children that way is doomed to failure, in whole and part. So we need to leverage up our existing schools a child at an time. Theories, group testing and evaluation don’t work. Life does not work that way. Life is all in the details. Same with testing human beings. Each child is the important detail, the only one that counts.

          On a related point – the test and ongoing monitoring and assessments that follow the test are only as good at those who administer them. I fear that many a powerful tool is rendered useless, even harmful, by those who, for whatever reason, fail to use these tools to full advantage.

          • re: ” Children do not come that way.”

            the do come in demographics – with characteristics of that demographic though.

            re: as good as those that administer them.

            standardized assessments remove the subjectivity of others.

            and that’s for the good of everyone.

            the armed forces uses standardized tests to determine who qualifies as well as what further training they qualify for – no matter who is administering the test.

            but we agree on the focus and benefit of high stakes testing vs granular assessments…

            the high-stakes testing basically is oriented to holding schools and teacher accountable for the performance of the students.

            the granular assessments help the teachers and schools to determine what help the students need.

            Public schools are in the business of performing these assessments and responding with the right kind of help.

            How well prepared are choice/charter/private/home schools ready to to do the assessments and then assume responsibility provide the specific resource help needed?

          • reed fawell III

            Test and assess the individual then monitor his or her progress against that assessment. Then hold the teachers, their masters, and the systems behind them, all accountable for the results.

            Beyond that, we are fooling and defeating ourselves while we shoot at the wrong targets, play political games and chase illusions that keep some of us on an endless gravy train that solves nothing, while we give them the license to continue it, and while likely also we unfairly punishing those who are not the problem, including teachers and kids. This we’ve been doing at least sixty years.

          • re: ” Test and assess the individual then monitor his or her progress against that assessment. Then hold the teachers, their masters, and the systems behind them, all accountable for the results.”

            – across the board – no matter the type of school…

            keeping in mind:

            1. – some kids require much more time on task -to “get it”.

            2. – teachers are not generic widgets all with the same experience and skill – I know this comes as a shock to some but the phrase “highly qualified” DOES have a SPECIFIC meaning and not all teachers are so qualified especially new graduates.

            3. – some teachers are HIGHLY SKILLED in specific areas like Reading and Math in that they know how to diagnose specific shortfalls in kids AND what technique to use to get that kid back on grade level.

            4. in more than a few school systems – such teachers are “shared” between schools – like making house calls … they are only used on the tougher cases – using them in a standard classroom would be an egregious waste of a valuable resource.

            5. I do wonder how smaller, even stand-alone type schools (as opposed to being part of a system of schools – a district) will be
            able to marshal the same degree of resources and render the same comprehensive programs to a diverse demographic that has mixtures of mom/pop well-tutored kids – and at-risk kids and learning disabled kids – AND ALSO – “… Then hold the teachers, their masters, and the systems behind them, all accountable for the results.”

            It does worry me that there often times seems to be an assumption that all the things the public schools do – is not working “whatever those things are – most folks don’t realize – and that a stand-alone choice/private/charter/home is going to do it better with a bare-bones generic one-size-fits-all-approach or worse that one teacher can be a jujitsu artist who can become whatever kind of teacher that is needed – to all kids in the class – at the same time. It does not work that way in many good public schools. Kids are taken out of the general class during activities they already master or are not critical and they are sent to remedial teachers for concentrated work on the areas they are behind in.

            My view – same rules and accountability for all schools based on the same assessment regime and an expectation that kids that need help ARE going to receive the specialized help that they do need to get back on grade level and stay there.

          • one thing that competition can bring – and UVA may well be involved in it – as well as start-ups is the use of technology to revolutionize teaching.

            I’ve spend a lot of time here blathering about the differences in kids in that some need “more” than a generic teacher can provide if that kid is going to “get it” and stay on grade level.

            Not so much “online” alone – but tablet technology – a tablet – that like a highly-qualified teacher can almost continuously on a granular basis – assess a kid – and determine where they “got it” and where they have not – AND interact with the student – calibrating just where the problem is and providing more examples and exercises for the child to work on and immediate feedback when they are starting to “get it” – much like a personal tutor might do.

            Not a replacement for a highly-qualified teacher – there are still thing that only a human teacher will be able to do – like personally interact, understand home situation, body language, etc.

            but a well designed software system on a tablet can be like several assistants to the teacher which means that teacher can essentially teach more kids – saving money… extending limited resources,etc and the schools most likely to me highly motivated to this are the smaller choice/charter/private/home schools perhaps dealing with tutor that does send home the tablet with the kid.

            but the software design requires teachers – skilled and experienced teachers to determine how the software should work – then the programmers can do their thing.

            you do not want programmers with armchair teaching credentials designing what they think teaching is on a tablet and much of the educational software on tablets to date – according to the teaching folks I listen to – has a ways to go.

  2. Happy to see Peter recognize the important role played by all the free capital accumulated by the evil corporate exploiters so long demonized by the Left (and now of course being demonized by Cuccinelli, since McAuliffe made his money investing.)

    Really sorry to hear that the Hook may go under. I like that little paper, lots of good reporting and attitude (and it seemed to me plenty of display ads.)

  3. Peter, excellent reporting on entrepreneurialism and the venture capital industry in Charlottesville!

    Not so excellent commentary on Richmond. Richmond leaders acknowledge that the region has a lot of work to do before becoming a center of innovation. The “capital of creativity” moniker is aspirational, not a description of fact. Perhaps you think Richmond ought to bestir itself with a slogan like, “We suck, but we’re pulling ourselves out of the mud.” But that’s really not going to motivate change.

    I have plenty of beefs with Richmond’s leadership. I’m planning to slam Henrico County’s in a post this morning (if I can get my stinkin’ computer to work properly). But setting an aspirational goal of fostering creativity and innovation is not what I would call a flaw.

  4. Jim
    I love
    “We suck. Rva, rva”

  5. Was there anything that Va, aka the “Clown Show” did to encourage/incentivize/assist the start-ups in Cville?

    In another thread – we talk about Nuke Power and the appointed “committee”.

    Why are no Academic institutions involved?

    (or perhaps they are and I missed it).

  6. Actually there was some state funding from cit and where else i don’t know.

  7. I would be much more impressed if Va put together a true consortium that involved DOE and designated Academic facilities.

    otherwise it walks and talks like crony capitalism.

  8. Start-ups per 100,000 is an odd statistic. Granted, it’s relatively easy to calculate. However, if you’ve never been in the fabric of Silicon Valley then you really struggle to understand how good it could be.

    This was from a book about Silicon Valley called The Nudist on the Late Shift. To me, it perfectly exemplifies why Silicon Valley is Silicon Valley and nowhere else has ever become Silicon Valley. It also perfectly describes why Ken Cuccinelli MUST NOT be allowed to become Virginia’s governor if we are to be economically successful:


    BY CAR, BY PLANE, THEY COME. They just show up. They’ve given up their lives elsewhere to come here. They come for the tremendous opportunity, believing that in no other place in the world right now can one person accomplish so much with talent, initiative, and a good idea. It’s a region where who you know and how much money you have have never been less relevant to success. They come because it does not matter that they are young or left college without a degree or have dark skin or speak with an accent. They come even if it is illegal to do so. They come because they feel that they will regret it the rest of their lives if they do not at least give it a try. They come to be a part of history, to build the technology that will reshape how people will live and work five or ten years from now. They come for the excitement, just to be a part of it. They come because they are competitive by instinct and can’t stand to see others succeed more than they. They come to make enough money so they will never have to think about money again.

    They are the new breed, Venture Trippers, who get off on the dizzying adventure of bloodwork. It is a mad, fertile time. Working has become nothing less than a sport here in Superachieverland: people are motivated by the thrill of the competition and the danger of losing, and every year the rules evolve to make it all happen more quickly, on higher margins, reaching ever more amazing sums.

    They come from places wallowing in an X-Y-axis attitudinal coordinate, a slow-mo way of thinking about one’s life that offers a plodding story line they can’t manage to suspend their disbelief of. They try to live that story, but they keep popping out, keep finding themselves saying, “What the hell am I doing with my life?”

    They come because what they see ahead of them, if they stay where they are, is a working life that seems fundamentally and unavoidably boring. Nothing seems worse than the fate of boringness. They feel they are being offered a neo-Faustian trade-off by society: all of life’s sprawling dimensions will be funneled through the narrow pipe of the career path.

  9. It’s not surprising at all…..Say whatever you will (and God knows plenty of Virginians do), C’ville is one of the nicest small cities in the country.

    I’ve traveled all over the States….I’d put C’ville in the top 10 of any small city category.

    Ultimately, the 21st century economy is going to be about the rich getting a lot richer and the poor getting a lot poorer. Tyler Cowen (hardly a lefty) wrote a good piece about this.

    And that simply means that great places to live are going to attract greater and greater proportions of talented and wealthy folks. And crappy places are going to fall further and further behind.

    3 “Megatrends” that are overwhelming the 21st century 1. Mobility-so many jobs no longer require a physical presence, thus you get to pick where you live in a lot of cases…..2. Elites have been marrying elites for the past 30 years at an unprecedented rate…..The Economist calls this “cognitive breeding.” And this “cognitive breeding” has resulted in elites only wanting to be around other elites….thus a place like SanFran is a magnet, and 3. The arts are much more elite aligned than 50 years ago….thus elite hubs tend to be arts hubs which reinforces the vicious cycle……artists obviously want to be around those who appreciate AND WILL PAY FOR their work…..thus they’re going to cluster where elites cluster.

    Richmond has lots of potential…..but putting one’s eggs in the VCU basket is not going to be a winning strategy……..

  10. Cville is a place that young people like. It’s relatively bike/ped friendly – has walking/biking trails and is within a couple hours of hiking, whitewater, skiing, etc….

    and yes I agree… it’s a nice place to live and for some reason seems to have no downtrodden districts… where folks are consigned to food insecurity/food desert hell and the like… very ODD….for a city…. indeed….

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