Spotlight On St. Louis’ Startup Scene

What do you think when asked to describe the St. Louis business community? Do you by any chance think tech and startup hub?

You should.

Let’s start in 2015 when Popular Mechanics ranked us the top startup city in the country. Then there was that great piece in 2017 where FiveThirtyEight called us the “new startup frontier” and that same year Business Insider reported that we are the fast growing startup city (that’s right - not L.A., not San Francisco, us).

Then in 2018 Livibility.com named us one of the nation's five best "up-and-coming tech hotspots" and Forbes named us the #2 rising city for startups. There’s also a string of 2018 articles from TechCrunch, Forbes, Silicon Prairie News, The New York Times and more with some pretty great things to say.  

Just this year, Inc. named us one of the best startup cities once again.

Next, there’s our legacy in entrepreneurship. Although you may want to make the case that history isn’t as vital as our present and future, it informs how we got to now, and St. Louis’ legacy is the base we’re building on. Plus, it’s a pretty impressive legacy.  

Starting in 1000 to 1300s, the Mississippian Cultures were innovative in their use of mound building and other practices we can still see evidence of at Cahokia Mounds long after the artifacts and mounds across our region have largely been destroyed or moved.

A few centuries later, we were founded by innovators and entrepreneurs who weren't content to stay put in the more “developed” east. The traders and fur trappers of our earliest days built a strong fort into a notable town, into a bonafide city. One that claimed many of the country’s “firsts” west of the Mississippi River.

As large corporations go, Anheuser-Busch grew from St. Louis soil to lead the global beer industry, and Purina the same in pet care - though you might dismiss them as foreign-owned conglomerates now, they still contribute a millions of dollars to our local economy by keeping St. Louis as their North American headquarters and employing hundreds of St. Louisans.

Enterprise, Centene, Energizer, Bayer and Panera (St. Louis Bread Company) corner their markets from their home bases here, and those are just the locally founded (or acquired) companies that grew to massive corporations.

One of the largest privately owned companies in the country, World Wide Technology, also stemmed from our entrepreneurship ecosystem and continues to give back to the community as a whole and the start-up community in particular. We see similar growth from large distributor Major Brands and others.

Next, let’s move forward in time to some of our more recent entrepreneurial successes - St. Louis natives Jim McKelvey and Jack Dorsey founded Square right here in town and we’re seeing it corner its market with many more local-based projects coming from McKelvey since Square.

Oh, and Wash U’s making names with a “little endeavor” called the Human Genome Project - that mapped the human genome, while Mercy built the country’s largest electronic intensive care unit. The research and startups coming out of our universities are bound to make more and more waves each year.

St. Louis earned the honor of being the Cambridge Innovation Center (CIC)'s first expansion site out of Boston, and CIC has since taken off here - now with three locations in the heart of the Cortex District in Midtown.

Venture Cafe followed suit and decided to base their global expansion efforts from here under the leadership of Travis Sheridan, and plans are well underway for more development and expansion of the Cortex District. CIC and Venture Cafe give us further startup cred and have led to numerous “serendipitous collisions” within the community.

That currently 200-acre space that we know the Cortex District is within the Central West End and Forest Park Southeast neighborhoods. It was created in 2002 by Saint Louis University, Washington University, BJC Healthcare, the Missouri Botanical Garden (MoBot) and the University of Missouri - St. Louis to “capture the commercial benefits of university and regional corporate research for St. Louis”.

The Cortex website claims that the over 250 companies working within Cortex have created over 4,000 jobs, and when construction finishes on the final phase next year, that number will be up to 15,000 permanent jobs and many more companies. It’s become big enough for Microsoft to open a regional headquarters in the new 4220 building.

The Cortex District is part of the reason - along with organizations such as The Danforth Plant Science Center, BioSTL, Bayer, The Missouri Botanical Garden, Bunge North America, Novus International, our universities, and others - that we boast the highest concentration per capita of plant science PhDs in the world and one of the largest STEM workforces in the country!

We just mentioned BioSTL - they are a broad-based collaborative group of St. Louis civic, academic and business leaders who have been working since 2011 to promote jobs and companies within the biosciences to drive economic growth.

On a similar note, we’ve seen St. Louis’ star in the ag-tech industry continue to rise. In addition to the big players, we have an increasing number established businesses and startups that contribute to a regional total of over 450 research and development AgTech companies that collectivly employ over 15,000 people. St. Louis County and the Economic Development Partnership noticed our increasing strength in the plant sciences and enhanced it by creating the the 39 North district.

Many of our rising stars in plant science are based out of the Helix Center or The Bio Research & Development Growth (BRDG) Park at the Danforth Plant Science Center  - part of the 39 North district and places where smaller companies can get access to world-class labs, greenhouses, other materials/workspaces, training and convenient office space.

Further, the Yield Lab AgTech accelerator operates from St. Louis, and we’ve seen more companies, accelerators, and venture capital funds forming a presence here.

We’re such a hub that the AgInnovation Showcase was held in St. Louis in 2017 and the InfoAg conference was held here in 2018.

Last of the major players, but certainly not least is T-REX. The eight-year-old startup incubator and coworking space is home to about 215 companies, countless events, and houses several of the region’s entrepreneur support organizations including iTEN, Cultivation Capital, Missouri Small Business Technology Development Center, Veterans’ Business Resource Center, Stadia Ventures, SixThirty, SixThirty Cyber and the Midwest Cyber Center.

It’s also home to Arch Grants.

Arch Grants is a nonprofit startup incubator that provides $50,000 equity-free grants and pro-bono support services each year to about 20 entrepreneurs through their Global Startup Competition. The only catch? All companies must relocate or stay in St. Louis for at least a year after receiving their funds or return the grant.

Their alumni include over 130 companies - many of which are making names for themselves both locally and in wider markets. Arch Grants has also seen a high retention rate and a large economic impact.

They’ve contributed over $7 million in non-equity capital and have generated more than $90 million dollars in revenue, secured over $130 million in follow-up capital, and created over 1,200 jobs in St. Louis.

I have been able to speak with many Arch Grant recipients who moved from countries around the world and states across the country to accept this grant. Over and over again I heard them talk about the long-term future they saw for their companies in St. Louis. They told me how they planned to be part of and to give back to our community, how they were more excited about the Arch Grants program than any other program in the U.S. or other countries, and how they saw ways to connect with and build up various industries. The data backs that up - over 75% of the companies are still based here in St. Louis.

“I think there’s things we have to offer here that other places don’t,” Arch Grants Executive Director Emily Lohse-Busch told HEC Media in an A Conversation With interview. One of those aspects being the impact of the “Arch Grants seal of approval” - that local business leaders will take the entrepreneur's meeting.

So what made us an entrepreneur's city? Hard to say for sure - maybe it’s something in the water, maybe it’s groups like Cortex, BioSTL, Arch Grants and others, maybe it’s the ease of life, or maybe it’s our relatively low cost of living.

According to the U.S. Census Bureau’s 2015 American Community Survey data St. Louis’ median home value of $164,200, is well below the U.S. median home value of $194,500.

To add to that theory, many of our entrepreneurs are millennials and we’re seen by Business Insider, PennyHorder, the Huffington Post and others as a top city for millennials - a cross-section of affordability with top-notch arts, culture, food and nightlife.

“Communities that engage Millennials in the creation of spaces to work and live will be rewarded, especially cities,” said Ginger Imster, Vice President of Innovation & Entrepreneurship for St. Louis Economic Development Partnership told the Huffington Post. “Millennials have the potential to breathe new life back into cities, specifically the urban core.”

And we’re doing just that - all of us, millennials, baby boomers, Gen X, everyone - in part though our innovation community.

Heck, that entrepreneurial spirit extends to making St. Louis a town of great beer with numerous talented craft breweries - started by entrepreneurial brewers and St. Louisans.

Whatever the reason, St. Louis’ tech, agtech, beer and startup scene seems positioned only to grow.