EDAWN’s Doug Erwin: Northern Nevada’s startup ecosystem ‘established and evolving’
This interview has been edited and condensed for clarity.
RENO, Nev. — Doug Erwin knows the startup game. A serial entrepreneur, Erwin has founded a slew of companies — from a stand-up paddleboard business (Tahoe SUP) to an at-home male fertility test company (Pria Diagnostics).
For the past six years, however, Erwin has been on the other side of the fence, helping grow the entrepreneurial ecosystem in Northern Nevada as the senior vice president of entrepreneurial development at the Economic Development Authority of Western Nevada (EDAWN).
For Erwin, when he decided to join EDAWN instead of starting another company, he wasn’t just thinking about what’s best for him or how to help better the region’s economy, he was thinking about his kids.
“I really wanted them to have opportunities to stay in Reno,” Erwin, whose sons are ages 5 and 8, told the Northern Nevada Business View. “And the way I looked at it at the time (six year ago) is it’s a great place to live, but if they don’t have a good economic opportunity they’re going to leave. So part of this is personal. If they’re a construction worker or a computer scientists, I’d like for them to have opportunities to stay.”
Six years later, with the Reno-Sparks region transforming into a burgeoning startup scene, the economic opportunities in Northern Nevada continue to grow.
With that in mind, the NNBV sat down with Erwin recently to talk about the past, present and future of the entrepreneurial ecosystem in Northern Nevada.
NNBV: From your perspective, what’s the state of the startup ecosystem in Northern Nevada?
Erwin: I would say its established, evolving and getting more sophisticated. We’ve always had a lot of support infrastructure, but over the last five or six years it’s gotten more well-connected and people have gotten more clear about where they participate. And I think the community as a whole has really banded together; I think it reflects our barn-raising ethos and we’ve really worked together to help support the entrepreneurs, which is really the point of the ecosystem, right? That system’s primary objective is to put entrepreneurs first and help support them and so I think we’ve seen that evolve over the last five or six years. I think we’re at this really interesting place where we’re trying to evolve to the next level to help support an area that we haven’t always done the best job at — which is high-tech, high-growth. This is why you’re seeing more emphasis on investor ecosystem and support tailored towards those types of companies.
NNBV: What are the biggest changes you’ve seen the last six years?
Erwin: I think part of it is just people recognizing the importance of entrepreneurship. I mean, from an economic development standpoint before we started this program, economic development was all about bringing big companies in. And so I really credit (EDAWN CEO) Mike (Kasmierski) for having the vision and the leadership to say, ‘No, we need to make a long-term bet to support entrepreneurship.’ Which doesn’t pay immediate returns — you land a big company, you immediately get the hit. Here, these are entrepreneurs, they tend to start up smaller, they don’t bring in as many jobs, initially. But, when they do, they tend to bring in higher tech jobs. They dramatically impact culture — just look at Midtown and what’s going on there. So I think just that whole having the foresight to look at ‘how do we create an entrepreneurial program over the long haul’ was a big change.
NNBV: What are the biggest challenges that startups face in this region?
Erwin: I think startups fundamentally always struggle around getting customers, getting great employees, and getting capital. And so, I think, in any region you have those challenges; some are better than others. So capital has always been a challenge for companies, but capital’s a two-sided problem. You need companies that are high enough quality to attract a certain level of capital and you need an investor mindset that is willing to take risks at a certain level. So, I think, one of the challenges for us has always been a little bit of lack of sophistication on both sides of the coin. That has improved dramatically. We’re seeing companies that are raising capital outside the community and staying here. Filament led the charge on that; they’ve raised over $30 million. You’ve got companies like Breadware that are both attracting capital outside the region and inside the region. And those entrepreneurs and those companies are acting as role models for other aspiring entrepreneurs. Four or five years ago, people had a really negative viewpoint of angel and venture capital, largely because no one understood it, because we didn’t have any of that here. Now, you’ve got companies that are sort of demonstrating this is how to use that capital, and then you’ve got better deals for our investors. So I think we’ve seen the quality of deals come up a little bit. And also you’ve got some new investors and some new energy going around that are looking at a company at an earlier stage, willing to take risks that are different.
NNBV: What about attracting talent?
Erwin: Talent, especially tech talent, they’re the most sought after class employees in the world. So it’s not a problem that’s unique to Nevada or Northern Nevada. Our population density makes it a little bit more complicated. But, again, a two-sided problem: if you don’t have the jobs, you don’t have the people. Tesla and a lot of the other employers are bringing new people to the region and they have spouses and they have friends, and so, we’re starting to see that pool increase.
NNBV: So where do you see things going from here? What does the ecosystem look like five years from now?
Erwin: Well I think people are starting to — especially because the Bay Area is so saturated and the cost of living is so high and the cost of employees is high and the work culture there is very mercenary, so it’s hard to keep people loyal — look at other alternatives and we’re uniquely positioned. We’re the closest non-California city to Silicon Valley. So we offer lots of advantages to being close to the Bay Area without being the Bay Area. So we’re seeing an uptick in startup companies and earlier-stage companies coming here as a place to set up shop, or at least open up an office. And it’s not entirely about cost savings, but a lot of it’s about just a workforce that they can count on. Obviously, it’s less expensive to live here relative to the Bay Area. So all of this is basically a way of saying, I see us continuing to grow that as long as we can keep the talent pool growing and evolving. We’ve got a great university and we’re starting to attract talent from outside the community. We’re trying to do a lot of things to improve the talent capabilities and capacity in the region.
The $625,000 deal included a low-interest SBA 504 loan facilitated by Nevada State Development Corp., the state’s largest SBA 504 loan provider. City National Bank partnered in the financing package.