September’s issue of the business magazine Inc. named a handful of local firms to its 2012 list of the 5,000 fastest-growing companies in the country, and in doing so, it highlighted the increasing importance of the city’s technology industry. Mobile app powerhouse WillowTree Apps made it into the elite top 500, and two other Web-oriented companies, Search Mojo and Silverchair Holdings, were noted in an expanded list, evidence that tech sector growth here is registering on a national scale.
According to a study of key local industries released this year by the Thomas Jefferson Partnership for Economic Development, information technology and telecommunications companies make up the fourth largest industry group in Charlottesville. There are more than 130 firms that fit the description here, employing just over 2,000 people and paying them an average salary of $74,117—almost 50 percent higher than the city mean.
Charlottesville has been working on wooing tech for some time. In 2000, it started offering tax breaks to technology businesses. The nonprofit Charlottesville Business Innovation Council, formerly the Virginia Piedmont Technology Council, has been advocating for the industry for 15 years, and offering networking and education events to spur growth.
Something is working, both for service-oriented companies like WillowTree and product-centric startups, like mobile rewards card app maker Cardagin and hotel room search engine Hotelicopter. The latter recently sold its technology platform to a bigger company, Roomkey, and its decision to keep its tech talent based in Charlottesville is yet another sign of the industry’s strength locally.
So what’s behind the growth? Apparently, it’s part good positioning and part attitude.
WillowTree is in many ways the poster child for why Charlottesville is good for tech and vice versa. Not long after founder and chief technology officer Michael Prichard started the company out of his home office in 2007, Apple released its software development kit for the iPhone, allowing anybody with the know-how to build apps for its operating system. It wasn’t long before, Prichard and business partner Tobias Dengel had more demand for their services than they could ever want. They’ve been growing ever since, with a full-time team of 36, making them one of the biggest mobile app shops in the country.
At the heart of their business model was a commitment to keeping their workforce under one roof. Other startups often have developers working from home computers thousands of miles apart to save on overhead, but Dengel and Prichard wanted their employees to be constantly swapping ideas and sharing knowledge. And if you really believe in keeping everyone local, they said, a college town like Charlottesville is the place to do it. The cost of living and of doing business is lower, short commutes mean more productive hours in the day, and the University offers a steady pipeline of talent.
When you share office space, “You feed off the energy,” said Prichard. “We make the best mobile apps because we’re together, we’re passionate about it, and we teach each other.”
Putting minds together is Spencer Ingram’s mission. This spring, the young UVA grad launched Hack C’ville, a startup incubator exclusively for student entrepreneurs. At any given time, his office on Elliewood Avenue is a home away from home for half a dozen or more teams of UVA undergrads developing websites, apps, and more. In the same building are six mentors—serial entrepreneurs and tech gurus who buy into the shared workspace with a fee and a promise to devote four hours a week to assisting the young bloods downstairs.
In Ingram’s eyes, Charlottesville’s tech scene is promising because of two key factors: It’s a small but rich market, and there’s a commitment to collaboration that’s fueling a grassroots support network for startups.
“It’s not that crowded,” he said. “You can get things done because there’s not a lot of noise out there. And it’s small enough to connect to all the right people who have a special willingness to help here.”
In a city this size, he said, people who have been there and done that are just a coffee date away, and, more often than not, happy to sit down with an aspiring entrepreneur to share advice and contacts.
Fostering those interactions not only speeds innovation, he said, it stocks the local talent pool by encouraging young people to stick around after they graduate. That’s increasingly important, said a number of industry leaders, as demand for certain jobs outstrips supply.
“I have trouble finding enough quality talent right now in Virginia,” said Janet Driscoll Miller, CEO of search marketing firm Search Mojo. She wants to see more resources thrown at that problem—a more active industry group that could sell Charlottesville as great place to get a tech job at conferences nationwide would go a long way, she said.
WillowTree’s Prichard agreed. Recruiting the best and the brightest is one of the company’s main goals now, and he wants to make that easier with more bridges between local firms and nearby schools, and between Charlottesville and the rest of the country.
“It’s all about finding smart people,” he said. “That’s all we’ve got, right? That’s why we are where we are.”
This story appears in the September 11 issue of C-VILLE that’s on newsstands now, but as always, there’s more to the story than can fit in print. Check back with c-ville.com for more input from leaders in the local tech community on why the city is such an attractive place for technology startups to put down roots.