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Sheldon Grizzle, right, leads a discussion of local entrepreneurs in the second "Co.Lab Friday" meeting at 55 E. Main Street. The meetings are meant to help promote the entrepreneurial spirit in Chattanooga.

It's no secret some big ideas have come out of Chattanooga.

It's the place where Coca-Cola was first franchised to be bottled, the Moon Pie was created and a small insurance company, Provident, grew to a multinational corporation with more than 10,000 employees.

Entrepreneurship has deep roots in this city.

But since those 20th century roots took hold, entrepreneurship has waxed and waned, and within the past decade Chattanooga has experienced something of an entrepreneurial renaissance, according to local experts.

"It's a return to what Chattanooga was before," said Sheldon Grizzle, co-founder of The Company Lab, a local organization that helps entrepreneurs cultivate ideas and get them off the ground. "[The city is] kind of reinventing itself as an entrepreneurial community once again."

A sanctuary for startups

Explanations for what makes the Scenic City ripe for startups vary depending on whom you ask, but many cite geography as a top factor. Access to railroads, roadways and the Tennessee River, as well as being two hours from several major cities, entrepreneurs can quickly and easily distribute products to just about anywhere in the country, said Chris Daly, director of technology development and transfer at the Enterprise Center.

Having the fastest Internet connectivity in the country doesn't hurt, either, he said.

"It's an enabling component of technological businesses," Daly said. "Access to world-class technology brings about some amazing opportunities for us."

Less tangible is the spirit of entrepreneurship that pervades the city, something those who aren't from the area quickly pick up on.

When Jon Moss moved here more than three years ago, he wasn't sure how local people would receive his ideas. But he said he quickly learned that "there is an undercurrent of entrepreneurship running through this town."

"Yeah, people gravitate to their own circles, but it's a business-friendly town," said the creator of Moss Media Labs, a company that assists businesses with their social media efforts. "The way Chattanooga is wired, in the business world here, when you come into the area people want to find out about you."

Incubator at capacity

Kathryn Foster, director of the Chattanooga/Hamilton County Business Development Center, said when she moved to the city seven years ago, she could tell "there was something happening here."

"I looked at this town and went, 'Wow, here's this little utopia that I just don't think anyone's found out about yet,'" she said.

Since then, the Business Development Center -- the largest incubator in the state and third largest in the country -- has helped hundreds of entepreneurs get on their feet and continues to stay at its 60-business capacity, Foster said.

Having access to an incubator where experts can help entrepreneurs during the first three years of operation further enhances the attractiveness of the city for those starting a company, she said.

Many rise with tide

About 50 percent of startups fail within the first five years, according to the U.S. Small Business Administration, but 91 percent of the businesses that graduate from the Chattanooga incubator survive, Foster said.

"Now that we're dealing with a recovering economy, we have to grow jobs," she said. "We're extremely fortunate to have some of the big guys like Volkswagen and Amazon, and that helps the tide rise for everyone else. Even the people that are cutting hair or doing taxes or building houses, whatever it is, the tide rises for everyone. There is opportunity no matter whether you're ever going to set foot in the VW plant."

Despite a tough economy and bank loans that are increasingly difficult to come by, more than a dozen new local businesses opened up in the Southside alone in 2010 and many more set up shop on the North Shore and in surrounding areas of the city.

Tech sector gains


* U.S. entrepreneurship reached its highest point over the last 14 years in 2009, with 558,000 new businesses created per month.

* The construction industry had the highest rate of entrepreneurial activity of all major industry groups in 2009.

* Tennessee and Georgia experienced some of the largest increases in entrepreneurial activity over the past decade.

Source: 2010 Kauffman Index of Entrepreneurial Activity

Dr. Bev Brockman, a professor of entrepreneurship at the University of Tennessee at Chattanooga, said it's no surprise that entrepreneurship has risen in the last several years.

"It's actually very well known that new businesses are really what tend to pull economies out of a recession," she said. "It's a good thing these businesses are starting, and while they may be partly a response to the recession, it's also positive because those new businesses generate new jobs. Time after time it's been shown that's what pulls you out of a recession."

Entrepreneurialism in all sectors, but especially the technology sector, is gaining momentum in Chattanooga, Grizzle said.

"I think we are in for a really, really exciting next 10 years," he said. "I really see it as a community that is going to become really, really excited about entrepreneurship in general, and just figuring out how do we create more startups, how do we generate more local wealth that is going to stay in Chattanooga and not disperse if a company leaves."

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