Hotbed of Innovation
Why Southwest Florida is attracting creative startups by young entrepreneurs
Which of these descriptions of our lovely gulf shore doesn’t belong: retirement destination, tourist haven, golf and tennis mecca, or hub of young innovators?
Not that hard to figure out. No one is really confusing Southwest Florida with the next Silicon Valley. For now. A few years from now, that question may get a bit more difficult, but believe it or not, Southwest Florida is prime for enterprise. That’s according to a recent study done by MoneyRates.com, a personal finance site and research firm that publishes the popular Best and Worst States to Retire guide. In its listing for America’s Top Cities for Young Entrepreneurs, Fort Myers/Cape Coral came in at
No. 5, Punta Gorda landed eighth and Naples is 11th. Of course, studies like these should be taken with a grain of salt. But dig in a little deeper and the numbers add favorably for our stretch of Florida.
The reasons are varied, but all point toward one aspect: growth. This area is one of the fastest- growing in the country. Fort Myers-Cape Coral was among the top five fastest-growing metropolitan areas in the United States from 2015-16, according to Census data. (Naples was 17th.) And it’s not just retiring baby boomers fueling the growth, but also a more diverse demographic than before, including a subset of educated and affluent millennials. The new residents create a demand for services, and young entrepreneurs are jumping to meet those needs. A lower cost of living compared to East or West Coast cities coupled with a favorable tax environment (the Tax Foundation ranks Florida fourth-best in the country) means the Gulfshore has become rich in opportunity. “The ground rules for operating a business are generally great in Florida,” says Richard Barrington, senior financial analyst for MoneyRates.com.
So, what’s it like actually starting a business here? Young entrepreneurs and locals who are in the know about the business climate aren’t surprised with the rankings. They see potential here. But as with any burgeoning area, they see hurdles that need to be overcome before this region can truly flourish. If one thing remains constant in their responses, it’s this: just how quickly we’ve gotten to this point.
Bryon McCartney arrived in Southwest Florida about five years ago and started his business, Be Brilliant! Marketing, with his wife. He started to get involved in forming and joining networking groups for young professionals; he’s served as the president of the Fort Myers chapter of the Naples-based Entrepreneur Society of America. In his time here, he’s been amazed at the growing number of young professionals organizations along with accelerators and incubators set up to nurture startups. “I’ve definitely seen a rise in the activities directed at young professionals,” he says. “There’s a lot of opportunity here if you’re willing to take advantage of it.”
The RocketLounge, one the third floor of a brick building a short walk from the water on Hendry Street, is one such place. It’s a unique feature in Fort Myers—a co-working space/incubator/accelerator. In short, it’s a place where like-minded entrepreneurs can gather, collaborate and, with the help of its founders, get their startups off the ground.
The floor has a hip, modern vibe—sleek desktops in an open-air area where its members can work and talk. At times, it’s quiet, with members busily working behind closed doors in the offices that line the walls. Other times, it’s not, like when a group of 30 coders will gather in the late afternoon for a networking event.
Members rent desk or office space, but their term is intended to be fairly short. Founder Dieter Kondek and his collaborators work with the startups on developing a product, finding investors and, hopefully, becoming a successful business that can thrive on its own. RocketLounge has hosted everything from a digital news agency to an electric golf cart manufacturer in the year or so it’s been active.
The RocketLounge joins similar ventures that have started in recent years, such as the Naples Accelerator off Pine Ridge Road or Fusion Pointe in Fort Myers, which pro vides technical expertise and mentorship to startup businesses. (Florida Gulf Coast University also recently started the Runway Program for student entrepreneurs.)
Kondek has an impressive résumé: 30 years of experience in the tech industry, including time at Dell and IBM in Europe, and a co-founder of a Silicon Valley venture capital firm. He was initially attracted to Southwest Florida for its weather, kick-back atmosphere and community of native Germans like him. He had a vacation home in Cape Coral and then became a permanent resident when he started to fall in love with Fort Myers as an up-and-coming tech hub. “This area has all the ingredients,” he says.
Kondek sees what many others see: a good business climate, a growing population in a destination area, less competition for capital. It’s prime to turn into a regional tech hub. But hold off on those Silicon Valley comparisons just yet. A younger workforce is growing, but it’s short on the tech savvy—coders and the like who can join startups and take them to the next level locally. Southwest Florida is also lacking big venture capital. Sure, the area has money. But tech investing in particular can be seen as risky and scare off some individual investors. Venture funding groups do exist, such as the Naples-based Tamiami Angel Funds that invests as much as $750,000 in upstart groups. But, Kondek says, the area needs more to compete with the likes of up-and-coming tech hubs Austin and Boston. Otherwise, startups will launch here and land elsewhere. One of the ways to solve the program comes in image. “We need more success stories,” he says.
Success stories do exist here. Take Position Logic, for example.
Felix Lluberes ended up in Naples more than a decade ago working for a tech firm called MediaBrains. But shortly after arriving, he and his friend Hong Long decided to venture out on their own. They started Position Logic out of Lluberes’ North Naples home in 2007, specializing in GPS tracking services for businesses. The timing wasn’t exactly great, but they tapped into a fast-growing industry. In 2012, it was named to the Inc. 500 list of fastest-growing companies. Position Logic is still based out of Naples, but it has since merged with another company, and then KORE Wireless Group acquired it two years ago.
Lluberes sees the resources emerging that he wished he could have tapped into 10 years ago. He’s found mentors through SCORE Naples, which connects experienced business people with young entrepreneurs, but the local chapter didn’t exist until 2013. The Naples Accelerator came too late for him to join. “I wish we could have had that instead of just doing it out of our house,” he says with a laugh.
Doing business in Southwest Florida does come with tradeoffs. It’s true that the area lacks the high-level technical experience his company employs. But the region is strategically located and features a diverse population that allows them to tap into an international market, especially Central and South America. He sees the region trending up as local tech companies continue to have success and, as Kondek says, get more recognition. “It needs more maturing, but it will continue and Southwest Florida will become a tech hub,” he says.
Rochelle Graham-Campbell (right, by Alex Stafford) came to Fort Myers for reasons more personal than professional. She was a recent college graduate who moved to be closer to family with her husband, Demond. She also had a burgeoning business. Alikay Naturals was born out of a personal need. She had been seeking natural hair care products, ones not laced with harsh chemicals. She came up with what’s now called Essential 17 Hair Growth Oil in 2008. Almost 10 years later, Alikay Naturals line of hair care and beauty products is part of a multimillion-dollar company that’s found on shelves in Target, CVS and Sally Beauty Supply. Under the parent company of Black Onyx World LLC, it’s based out of a 7,000-square-foot manufacturing facility in Fort Myers.
Graham-Campbell’s success story is one of the more intriguing locally because of how she grew it from the bottom up with a mix of dedication, business savvy and ingenuity—at a time when Southwest Florida was flying even more under the radar as a destination for young entrepreneurs.
The journey was a long one, started in college at the University of South Florida in a small, two-bedroom apartment. She had gained a following on YouTube by trying out homemade treatments on her hair, inspired by her Jamaican herbalist grandmother. Her loyal viewers watched how quickly her hair was growing with her product and started asking for it. She used $100 in tips she got working at Olive Garden over a weekend to whip up the first batch. Little by little, sales ticked up. After graduating with a marketing degree, she moved to Fort Myers and dedicated herself to the brand. As it turned out, retailers were looking for products like hers. A store broker saw her in a Shark Tank- like presentation at a trade show in Chicago and approached her about pitching to Target. Major retailers were seeing an increased demand in the “ethnic beauty” sector, and consumers were losing interest in some of the legacy brands that typically crowded that shelf. Hers fit the mold perfectly— organic and grassroots with a personal touch—and it had established solid sales online. They bought in. Within a year, Target tripled the number of stores it was featured in.
She’s stayed dedicated to Fort Myers after all these years. Her cost of business is relatively low; she figures her facility costs are about one-fourth of what they would be in a major city. She travels multiple times a week for business, and while Southwest Florida International Airport is only a quick drive away, the lack of direct flights means she has to spend more money and time on travel than she’d like. Like any growing area, Southwest Florida is a mixed bag of benefits and drawbacks, she says. She finds a supportive business community and has found valuable connections through the chamber of commerce (her label-maker is also local)—but finds that many young entrepreneurs are unaware of resources locally. But she figures that will change as the city continues to be a destination. “We can grow our company here—and still be close to family,” she says.
Ashley Chaffee and James Schlimmer (left, by Craig Hildebrand) are now where Graham-Campell was a decade ago—at the beginning of what they’re hoping will be a thriving enterprise. Their future is bound to a deck of cards. It’s called Rehab, and each card comes with a question designed to spark interesting or revealing conversation among couples. They’ve upended their lives for the cards. After leaving a marketing job, Chaffee is focused full- time on the business. Schlimmer still has his real estate title company, but when he gets home it’s all about Rehab. They’re self-financed, so at this point, it’s all in their own hands. They’ve crisscrossed the country to go to trade shows and expos and have gotten seats in front of major retailers—and learned much more than they ever thought they’d need to about things like proper bar code placement on packaging. “You have to know everything, every aspect of business,” Chaffee says. “You have to learn constantly.”
The couple had ambitious plans at first: nationwide distributor, big social media campaign, packs of cards in checkout lanes at places like CVS. But their plans changed. Their “viral video” they produced didn’t go viral. Big chains were hard to break into. But they didn’t get discouraged. They just started thinking differently.
Now, they’ve found their target demographic. Basically, it’s Southwest Florida. When you get down to it, their game is old-school, and now they joke their marketing has gone the same way. Turns out their audience was here all along—older couples, people who grew up playing card games and were used to looking at something other than a screen. They started setting up booths at farmers markets and talking their way into presenting at Kiwanis events. They’ve spent the last several months fine-tuning their product based on the feedback they’ve gotten locally.
They still have plans to go big. They’ve just taken a different route. They’ve partnered with a top marriage and relationship podcast on iTunes, ONE Extraordinary Marriage, and are slowly trying to build a national audience. But what success they have so far they attribute to being here in Southwest Florida. “Finding a group like a Kiwanis club and then them allowing us to get up and talk about our product for 20 minutes at a meeting, a lot of people don’t get that opportunity like that elsewhere,” Chaffee says. “Here, it’s all around us. I think that you can only do that in a place like Naples, Florida.”
The Young and The Innovative
FLORIDA GULF COAST UNIVERSITY is starting to grow innovative entrepreneurs early with its Runway Program. Interested students from any major can apply to be a part of the semester-long program, during which they work on the development of their business idea; they’ll design a complete launch plan to start a business while still in school. According to director of the Institute for Entrepreneurship Sandra Kauanui, there were about 65 students in the program in the Fall 2017 semester, and approximately 70-80 percent of the students who apply get accepted.
The students work in an incubator environment in FGCU’s Emergent Technologies Institute (ETI) building, which houses labs, offices and state-of-the-art equipment for students to use, such as 3D printers, digital single-lens reflex camera and video recording equipment; 3D and prototyping software, graphics software, sewing equipment; and more. The students also benefit from mentoring on all aspects of business.
Here are some current and recent businesses that were born in the Runway Program:
G.I. GEM was developed by Rebekah Dankert, an FGCU senior graduating with a degree in finance. The company will offer a line of self-defense tools such as pepper spray in the form of jewelry, thus making it easy and convenient for women to protect themselves. Dankert received $15,000 in seed funding through the Runway Program.
SMOOCH BY SAMITCH is a monthly cosmetics subscription service and phone application developed by Samantha Mitchell. A junior at FGCU, Mitchell is pursuing a major in entrepreneurship. She earned $10,000 in seed funding through the program's pitch competition in spring 2017. Follow @smoochbysamitch on Instagram.
ROOMDIG was developed by Jakub Adamowicz and Michael Kunchal. Their invention is an app that finds roommates and real estate matches for college students. They have raised $8,000 in seed funding for their business, between the pitch competitions at the University of South Florida and at the Runway Program. They plan to visit colleges nationwide to create housing partnerships with them. Find them on Facebook.