Map highlights capital’s growing startup community

THE FOUNDERS LEAGUE Providence Startup Map illustrates the companies in Rhode Island and nearby Massachusetts that Betaspring Chief of Staff Melissa Withers said share
THE FOUNDERS LEAGUE Providence Startup Map illustrates the companies in Rhode Island and nearby Massachusetts that Betaspring Chief of Staff Melissa Withers said share "strong startup DNA." / COURTESY FOUNDERS LEAGUE

When fledgling startups emerge from Betaspring’s 12-week accelerator program, they face a critical choice – do they leave Providence or do they stay?
For Jon Bittner, co-founder and CEO of Betaspring alumnus Splitwise, the decision hinged on access to affordable office space in the Founders League and the hidden charms of a city he calls a well-kept secret. “Providence has really low rent and really great culture,” said Bittner.
“Two years ago there weren’t nearly as many [startups] as there are now,” added Bittner. “People don’t even know how many there are, and perception can become reality.”
In an effort to alter that perception, the Founders League in December published the Providence Startup Map, a “snapshot” of the growing entrepreneurial ecosystem in Rhode Island and southern Massachusetts. Splitwise is among the companies featured on the map, demarcated by a red flag alongside 119 other startups, six universities and 20 startup-support organizations such as Betaspring and the Social Enterprise Greenhouse. Some of the companies no longer fit conventional definitions of a startup, in terms of size or age, but were included if their profile fit what Betaspring Chief of Staff Melissa Withers called “strong startup DNA.”
Ben Goldstein, program manager for the Founders League, said the map has already gained traction in the community as a visual representation of how far the Providence startup scene has come.
The Founders League is looking to establish a permanent online home for the map, which for now is displayed in a blog post on the Founders League website.
In the email release of the map, Withers wrote that Providence is “just at the beginning of our startup revolution.”
Bittner founded Splitwise in 2011 while pursuing a graduate degree in astrophysics at Harvard University. Recently, the bill-splitting app he designed earned a place on Time magazine’s list of the 50 Best iPhone Apps of 2013, but two years ago it was a simple formula called “Split the Rent,” designed as a drama-free way to split living expenses among roommates. In Cambridge, Bittner had lived 50 miles north of Providence for five years, but had no idea about the startup scene in the city until Splitwise joined Betaspring’s spring 2012 session.
Nick Kishfy, founder and CEO of Web and mobile-app developer Mojo Tech, has been around the Providence scene long enough to have watched it evolve. He started up MojoTech on his patio in Barrington in 2008, after his experience working in support roles at a number of other startups inspired him to build a company on the idea of bringing other people’s ideas to life. In 2010, MojoTech moved to Providence, joining a startup community already gaining in momentum. “Even back then there were a lot of encouraging signs,” said Kishfy. “Providence Geeks was starting to gain more traction, and we had a few Rhode Island Ruby user-group meetings and other programming-related Meetups, and noticed the level of attendance continuing to grow.”
One of MojoTech’s first clients was Swipely, a payment and analytics platform for local merchants. Now, five years later, Swipely and MojoTech are counted among the fastest-growing startups in the state.
In November, Swipely relocated to larger headquarters in downtown Providence, and MojoTech now has done the same, with a move on Dec. 21 to its new location near the train station at 56 Exchange Terrance.
Earlier this year, Mojo Tech launched a branch office in New York, to cater to the slew of clients it serves there, but Kishfy said he expects MojoTech to stick around Providence for the foreseeable future.
“It’s kind of a special thing that we think we’ve built here, and don’t have any plans to disrupt it,” said Kishfy.
So far, he said, MojoTech has seen success recruiting new hires to Providence from other places, and he’s optimistic about the city’s future, though he’d like to see more local investors and skilled workers.
“There is not a significant investor community in Providence, so if you are a growing and successful company and need outside growth, you’re likely to get it from Boston, San Francisco and New York,” he said. “It’s definitely a problem in Providence, because a company may be forced to move out, and the worst part is they’re the successful ones that are forced to move out.”
The same principal applies to hiring talent, Kishfy said, a sentiment that Bittner echoed.
“A reason to leave would be, are there enough programmers in all of Providence to build a Facebook?” Bittner said. “You want to know that you’re in a place where that could happen.”
Laurie White, president of the Greater Providence Chamber of Commerce, believes Rhode Island needs to kick support for startups into high gear to build up a “critical mass” capable of real economic impact.
“Long-term employment in legacy companies just isn’t happening anymore,” said White. She pointed to a 2010 study by the Ewing Marion Kauffman Foundation, a national entrepreneurship and education nonprofit based in Missouri, which analyzed three decades of U.S. Census Bureau data to conclude that companies younger than 1 year old accounted for virtually all net job growth in the U.S. between 1977 and 2005. Initiatives the state might consider to attract entrepreneurs include seed-capital incentives, formal internship programs linking employers with students and tax reductions for companies that contribute to angel investment funds, said White.
“These small companies starting up have potential to become major employers,” she said. “Andera, Swipely, MojoTech and others all started with a new idea for a product or service and have grown and mushroomed into major employers.”
White also advocated the return of the Innovation Investment Program, a fund offered through the city of Providence and supported by the U.S. Department of Housing and Urban Development. The fund offered $50,000 loans to startups that promised to stay in Providence for at least a year, but the program was suspended after only 18 months when it ran out of money.
Of the 33 companies that received program funding, all but two were Betaspring alumni. Roughly 80 percent of the 44 companies that graduated from Betaspring during the program’s 18 months accepted the funding, Withers said. Although Betaspring last week could not provide a complete list of the accelerator’s startups that received funding, Withers said about two-thirds are still operating out of Providence, and while a few have folded, at least one or two of those have already paid back their $50,000 loans.
“It gave the companies a little bit of time to plan their next steps, and for many that was enough time to fall in love with our community and put down roots,” said Withers on the impact of the program for Betaspring’s startups.
Bittner, who received program funding for Splitwise after his time in Betaspring, said that for his company the program changed the question from “Why stay?” in Providence to “Why leave?”
Providence Mayor Angel Taveras and Economic Development Director James S. Bennett are currently working with HUD to bring the program back, White said, but in the meantime Bittner expects the startup movement in Providence to keep growing.
“People are optimistic about Providence,” he said. “If what’s going on today [continues], it almost feels inevitable to me that Providence will be even more awesome.” •

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