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This group of companies wants to turn Columbia into the next Silicon Harbor

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A work space at the Columbia cowork hub SOCO. File/John A. Carlos II

COLUMBIA — As company headquarters have left the Capital City, a group of entrepreneurs wants to see them replaced with startups built in-house.

A dozen Columbia technology firms have banded together as GrowCo, an organization hoping to fill the niche aiding upstart businesses ready to move beyond early into late stage growth. The group formed with the goal of building 10 times the number of fast-growing Inc. 5,000 ranked companies by the end of the decade. The city had eight in 2019. The year before, there were 10.

Mergers and acquisitions over the past two years, like those of Palmetto Health, Spirit Communications and the McNair Law Firm, are part of the natural business cycle lowering Columbia's headquarters count, according to Columbia Chamber of Commerce President Carl Blackstone. But unlike other Palmetto State metros, the holes those companies left here have not been backfilled.

By mirroring efforts in Greenville and Charleston, GrowCo thinks it can step into the void and boost Columbia's economy using peer mentoring and pooled resources.

There are a number of incubator-type spaces available for new ideas. And there are larger efforts, complete with tax incentives, to lure major companies in from out of state.

“We need all of that, but what we’re lacking are resources for high impact, high growth companies ready and able to scale here,” said Erin Curtis, GrowCo’s program manager and the organization’s first full-time employee.

It was during a Massachusetts Institute of Technology-hosted event that Ken Brower, one of the founders and interim CEO of Next entrepreneurial hub in Greenville, heard about GrowCo’s plans from member Colin Griffin, founder of Columbia software and service company Krumware.

“It was like turning the clock back 15 years,” Brower said, as memories of the early days of Next flashed in his mind.

When Next started in 2006, there were eight companies, mostly in software and IT. Similar to the dozen now cooperating in Columbia, they were established and expanding rather than new companies. They had been members of local business organizations. But something was missing.

“It was a different time back then,” Brower said. “Economic development was all about bringing in branch manufacturing up here. We were not on anybody’s radar.”

The city and county wanted to help companies grow, he said, but the tools they used didn’t work for startups without the need for expansive warehouses and manufacturing lines.

The chamber gave them a place to meet and a staff person to organize. They shared best practices and tackled common problems. They encouraged a state tax incentive based on new jobs created and took advantage of breaks being offered by the city to open shop downtown. It was a slow climb as more entrepreneurs got involved. They’re now up to 120 member companies and four full-time staff.

Matt Vaadi, founder of the Columbia-based HR software and services company ERG, noticed this difference between Columbia and other major metro areas when sitting on a panel discussion with the founders of Next and Charleston Digital Corridor.

“We didn’t have a similar counterpart in Columbia,” he said. “Great things are happening here; it just needs some facilitation.”

It's not that Columbia hasn't seen tech sector expansion, said Preston Grisham, who directs statewide tech-based economic development for newly formed TechSC. Many local business leaders refer to Blue Cross Blue Shield as a software company that happens to sell insurance.

“It’s just being outpaced by Charleston and Greenville at this time,” he said, evidenced by employment numbers in each city.

Though he says it’s hard to quantify the impact of those cities' startup-focused efforts, they do appear to be the common denominator surrounding successful firms.

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When Columbia’s Sam McGuckin started his insurance software spinoff, TCube Solutions, attracting talent was a barrier to buildout. Not much has changed. It’s a common refrain for other startup companies in the Capital City.

McGuckin's service-focused company required a hefty employee pool to serve a larger customer base. Salary made up 80 percent of his costs. He finally made a recruiting inroad to the University of South Carolina, tapping math and computer science majors from a business fraternity on campus.

It took him a couple tries, he said, and help from one of his young interns to get his pitch right — telling the students about TCube intern experiences living in an overseas flat working for Lloyd's of London and riding the Tube to Scotland on weekends for sightseeing and whiskey tours.

McGuckin soon had the attention of rising seniors, but he still heard time and again from interns that came to him looking for a job: “I didn't realize there were cool companies like this in Columbia.”

“From day one, they’re thinking they have to go somewhere else,” he said.

Finding highly skilled technical talent once was an issue in Greenville, too.

“Nobody wants to move for a single opportunity," Brower said. "The fact that there’s now a whole slew of startups and tech opportunities here helps us bring them in and keep them.”

It’s reaching that critical mass of companies that GrowCo hopes to replicate to help overcome its members’ employment struggles.

Charleston, nicknamed Silicon Harbor, got its start with companies like Blackbaud, Benefitfocus and BoomTown. Add to that the technical companies doing government contracting with the Naval Information Warfare Center and a workforce built up in the area, Grisham said.

The city also put resources behind Charleston Digital Corridor, started by its forward-looking economic development manager 20 years ago. During his time with the city, Ernest Andrade shifted focus, making small, quick efforts to help startups rather than dangling large incentives to industrial businesses, The Post and Courier reported.

Greenville, without the pull of the coast, transformed itself with investments in its downtown, Grisham said. A lot of talent also came out of the manufacturing space, with former BMW and Michelin employees forming companies like Orange Bees.

McGuckin and Vaadi see more opportunity for USC involvement, possibly introducing local internships as part of the curriculum, as career fairs tend to highlight large employers and are difficult for startups with limited bandwidth.

“Any time spent that I wasn’t selling was a risk to the business,” McGuckin said, and, given the choice between selling and recruiting, he often boarded the plane for his sales trip.

McGuckin said, in addition to recruitment, pooling other back-office functions, like HR, liability insurance or a legal team would have been helpful when he was muddling through them alone during his own early growth. Vaadi said one way GrowCo is helping is with a referal list of vetted, startup-friendly service providers.

When McGuckin sold TCube to the large French-owned Capgemini, the company promised it would open up 350 new jobs in Columbia.

”It’ll take a couple of those to really get the ball moving, but it’s happening,” Grisham said.

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