Life After Incubation: Startup Businesses form "Capitalist Collectives"

Feb 24, 2017

Dozens of Tallahassee start-up businesses are being born at various incubators around town. But what happens to those businesses when they leave the incubator and strike out on their own for the first time?

One of the common meeting areas in the App Innovators Building on John Knox Road
Credit Tom Flanigan

Some of those firms are now sharing space at what could be called “capitalist collectives.” Tallahassee entrepreneurs William McClusky and Joseph Petty both launched their enterprises at Domi Station near Railroad Square. Now they’re proudly giving a grand tour of their new business address, 535 John Knox Road on the city’s north side.

“Well, you’ve got two official anchors and one of them – Allison North’s PR (shop) – they’re growing so much they’ve kind of taken over the second floor.”

The building is an otherwise unremarkable three-story brick office building. It’s where McClusky is devising new business organizing tools and Petty is creating paperless business applications.

“And it’s just exactly what you need. It’s phenomenal! We’ve got this shared, relaxed space here and a more formal conference room here. Same thing on the second floor.”

Where once there were walls, there are now plenty of open spaces, allowing the building’s various tenants to meet and collaborate informally; sharing skills, working on each other’s projects, exchanging ideas.

“There was a wall over there that they knocked down to open up that area and they’re always working on it; always improving…They’re thinking about putting the barn door here!”

There are all kinds of unscripted interaction. But instead of chaos, the atmosphere feels upbeat and creative. Dustin Rivest is the founder and head of App Innovators the building’s prime anchor. He sees this kind of environment as the future for many startups, like McCluskey’s and Petty’s.

“I think the co-working environment is, especially for companies that are between, or under 15 employees. Once you get to a certain size, you can start looking at your own buildings.”

Or, Rivest says, an ownership co-op situation may be a better option.

“I even know a couple of businesses that have something similar, they’ve gone into a partnership with two or three businesses buy a building together. So I think you’ll see that coming down the line in the future. Imagine Proper Channel grows to 10 employees and I’ve got 15-20 employees…hey, let’s buy a building; let’s start building a real estate asset for us and be able to do that. But we wouldn’t be able to do that if we didn’t have a relationship that started to form here.”

Leon County Commissioner Kristin Dozier sees these informal collaborations and partnerships at a place like App Innovators as one way to ease a young business’ growing pains.

“In a lot of literature they call it the ‘Valley of Death’: the second and third year where companies really need to hit certain benchmarks in order to grow and establish themselves. That’s what a project like this can really help us do is have those incubated companies establish themselves in our community and have a chance of success long-term.”

Tallahassee has lots of conventional office space available for such capitalist collectives. But Dozier is concerned the more hi-tech kinds of enterprises may be sorely lacking the kind of space they need to succeed.

“We’ve got very, very little of that space available in Tallahassee. And a lot of the companies that come out of research at the universities, they have to take space down at Sid Martin (Biotechnology Institute) in Alachua County or out of state. That’s something that Innovation Park is working on right now. We’ve had a committee working for the past six months and we’ve engaged an architect and we hope to have space to meet those hi-tech specialized needs in the next year or so.”

In the meantime, there is a new freewheeling business model underway in Tallahassee. Newly-incubated startups working – and hopefully prospering – together.