Staking claim as hub for design

Up until the last five years, only a few cities in the world were home to their own for-profit startup accelerators and even fewer could offer evidence of whether the entrepreneurial boot camps would prove sustainable or lucrative.
Soon Providence should have two such accelerators, a rarity for a smaller city without a large technology and venture-capital presence.
The Providence Design Forward accelerator, set to be launched this spring by the city and a group of private partners, is intended to both boost the local startup scene and stake Rhode Island’s claim as a hub of commercial design.
As the state deals with compliance issues related to its own accelerator investment, opening a new publicly funded accelerator may seem risky for a city recovering from its own economic-development stumbles.
But according to Design Forward organizers, finding a way to invest in local design businesses has been a priority of citywide cultural-planning efforts dating back to 2008, when accelerators were just starting to take off in places like Boston and California’s Silicon Valley.
“This has been a long time coming and came out of a rigorous planning process that called for investment in design-based businesses and the creative sector in the city,” said Lynne McCormack, director of the city’s Department of Art Culture and Tourism and municipal point-person for Design Forward.
Under tentative plans shared with the Providence Economic Development Partnership last month, design talent, entrepreneurial expertise and mentorship for the accelerator will come from a partnership between Rhode Island School of Design, Founders League, Rally Rhode Island and DesignxRI.
Rally Rhode Island was founded by Allan Tear, also co-founder of Providence’s other accelerator, Betaspring, as well as Founders League.
Funding for the new venture will come from Providence’s share of federal Community Development Block Grant dollars via the U.S. Department of Housing and Urban Development.
Although the exact details of the Providence program have yet to be finalized, McCormack said she has looked to MassChallenge, a nonprofit Boston startup accelerator, as a model. Launched in 2010 with a mix of state, city and private seed money, MassChallenge has grown to become one of the largest accelerators in the world, graduating more than 100 companies annually and adding offshoots in Israel and the United Kingdom.
While many accelerators are fueled by investors and take equity in the companies they nurture, MassChallenge has a “no strings attached” policy and does not aim for a return from the companies it helps.
McCormack said the new Providence accelerator will provide several tiers of assistance for local creative companies, starting with online profiles of local creative businesses and moving up to peer mentoring and networking.
On a competitive basis, a smaller number of companies will win slots in the accelerator program itself, which will provide close assistance and funding opportunities.
Unlike many accelerator residencies, which look for extremely early-stage, proto-startups, McCormack said the Providence design program will target somewhat more mature, fully operational businesses.
As a result, the Design Forward accelerator may operate on the weekends or evenings, instead of during the weekday, so business owners can mind their shops.
A big question about the program that hasn’t been answered is what level of financial assistance accelerator graduates will receive and whether it will come in the form of grants or loans.
McCormack told the PEDP board, which will oversee Design Forward, her first choice was to provide grants, but the city has to make sure that will comply with HUD rules.
The design accelerator is the latest example of a revival for the PEDP, which spent 2013 in retrenchment, chastened by past mismanagement of its revolving-loan program and overextended by its first attempt at accelerator investing through Betaspring.
This year the PEDP has come back aggressively, lending again under the revolving-loan program and planning to relaunch the Innovation Investment Program that helped fuel Betaspring.
Despite widespread enthusiasm about building on Providence’s reputation in design, not everyone is certain another accelerator is the way to do it. Sylvia Maxfield, dean of Providence College’s School of Business, said she would be concerned that the new effort is launching at a time when accelerators have spread across the country.
“I think a proliferation of accelerators would not be a good thing, just because we are too small for several accelerators,” Maxfield said. “There are a heck of a lot of them out there now. We need to ask what problem the accelerator concept is designed to solve and if the solution is the best one to solve it or a marriage of convenience.”
If the objective is to give local entrepreneurs access to working capital, the most efficient way to do that is through the city’s and state’s existing loan programs, Maxfield said.
Despite some concerns about the accelerator model, Maxfield said she likes the idea of Rhode Island focusing on design expertise as a competitive advantage for businesses in areas that include agile prototyping or 3-D printing.
The key to MassChallenge, she said, was the substantial private support behind it, with donations that include a whole floor of an office tower and cash from some of the most prominent nonprofits, such as the Kaufman Foundation, and corporations, such as Fidelity Investments and IBM.
Getting a Providence design accelerator to make a significant impact will take similar private-sector assistance, Maxfield said.
“I would be looking for a small amount of public support and triple or quintuple that from foundations and private sources,” Maxfield said. “I have more confidence in foundations and the private sector to be good stewards than the public sector.”
The city carved out $1 million of its federal allocation of Community Development Block Grant funds for support of the creative economy and about half of that is left.
McCormack said the preliminary plan for Design Forward calls for about $250,000 of that money through the PEDP to seed the accelerator.
Long term, McCormack hopes Design Forward will generate the kind of corporate and private foundation support that’s fueled MassChallenge and allowed it to grow beyond government funding.
Crucial in that effort will be the city’s partners, who bring experience with accelerators, world-class design talent and extensive industry contacts. “We are excited to partner with these organizations,” said RISD Associate Director of Community Relations Bethany Costello. “Obviously if you are going to have some sort of design program or challenge in Rhode Island, RISD wants to be part of it.”
Costello said while it is still too early to define RISD’s exact role, it will definitely include mentoring.
Betaspring co-founder Allan Tear said two of his other projects, the Founders League entrepreneurial incubator and Rally Rhode Island, which focuses on networking, will be investing in Design Forward to get it off the ground.
“I think design is a great opportunity for our community to make a mark,” Tear said. “The startups will look different and have different trajectories than tech startups, but we can create a thriving design startup scene that is very complementary to our tech scene.”
In the three business groups working with the city and RISD, Design Forward shows the start of private foundational support, albeit strictly local.
Founders League was created in 2012 as a partnership involving Betaspring, the Greater Providence Chamber of Commerce, Brown University and the University of Rhode Island.
Rally Rhode Island was established with a grant from the Rhode Island Foundation.
And DesignxRI is a consortium of local design-related professional groups, funded out of the Rhode Island Foundation’s Make It Happen initiative to boost creative businesses in the area.
McCormack is slated to give a formal presentation on Design Forward to the PEDP board, which will need to approve it, at its meeting scheduled for April 2. A formal unveiling could follow soon after that.
On what type of enterprises will fall under the design umbrella, McCormack said the range could be broad and include everything from digital businesses to design-centered manufacturers.
The program will give preference to ideas that are scalable.
“These are potential growth industries for the city,” McCormack said. “Rhode Island is known for its design-based industries. Manufacturing was fed by great designers.” •

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