Berke: Chattanooga's big businesses need to do more in startup scene

Berke: Chattanooga's big businesses need to do more in startup scene

May 24th, 2014 by Shelly Bradbury in Business Around the Region

Andy Berke

Andy Berke

Photo by Tim Barber /Times Free Press.

Sheldon Grizzle of Chattanooga

Sheldon Grizzle of Chattanooga

Photo by Dan Henry /Times Free Press.

Chattanooga Mayor Andy Berke believes the city's big businesses aren't doing enough to support the city's startup scene, he said at a roundtable discussion Friday.

"We need to get our existing business leaders more involved," he told a group of local civic and business leaders during the hour-and-a-half meeting.

Chattanooga's startups need validation from the city's larger, established businesses to get products on the market, agreed entrepreneur Sheldon Grizzle.

"We've had local entrepreneurs with phenomenal ideas having great success and they've had to go outside of Chattanooga to find their first customers, or somebody to beta test what they're doing," he said. "And that's embarrassing. We have to get our bigger businesses in the mentality that just because it's from Chattanooga ... doesn't mean it's not a legitimate product."

A key example of this was QuickCue, Grizzle said. The restaurant wait list management system started in Chattanooga in 2011 and was sold to industry leader OpenTable in late 2013 for $11.5 million.

But QuickCue would never have landed that sale -- and sizable profit -- without first debuting in a slew of restaurants owned by Craftworks Restaurants and Breweries, a well-established company headquartered on Chattanooga's Southside.

"Without that initial validation, none of this would have happened," Grizzle said. "We have some really big businesses that are leaders in their industries, and if they can take on the mentality of being a testing ground for these guys -- that would be huge."

Berke suggested that his proposed "innovation district," a place he hopes will serve as a geographic hub for the city's young entrepreneurs to live, work and create, could help bridge the gap between the city's established businesses and the city's startups.

He did not elaborate on where that district would be or how exactly it would solve the problem. The innovation district is one of several initiatives the mayor is championing aimed at economic growth. He is also offering a $500 per worker cash incentive to small businesses that add five or more employees.

That program, which will focus on companies with 100 or fewer employees, is set to start July 1.

Berke will unveil the city's new budget on Tuesday, and said some money will be set aside for the program.

Contact staff writer Shelly Bradbury at 423-757-6525 or with tips or story ideas.