By Brandee Gruener | Photography by Cornell Watson
There’s no question: Durham has become a promising place to launch a startup. That’s in part thanks to American Underground, which has partnered with Google for Startups and earned a reputation as a startup hub of the South. Since 2016, American Underground and Google have also collaborated on the Black Founders Exchange, connecting Black-owned companies with the resources needed to grow.
It’s also because the talent is here and growing. The Durham-Chapel Hill metro area is rated No. 7 most educated in the country, churning out graduates from Duke University, N.C. Central University, UNC and N.C. State University. The area also draws in new tech talent due to a lower cost of living than San Francisco or Boston.
But while a good idea and good ecosystem for entrepreneurs can get you a long way, venture capitalist Joe Colopy said that’s not enough. Two years ago, he launched media company GrepBeat to promote and support the Durham entrepreneurial community. (Colopy was a successful tech startup founder himself, selling Bronto Software to NetSuite for $200 million in 2015.)
“Starting a company is extremely difficult in all environments, whether the economy is good or bad, and the entrepreneur’s persistence and ability and drive in times when things look really gloomy and no one is supporting you, is all-important,” Colopy said. “It’s a very lonely job, and there are a lot of people who think they’re up for the job, but very few actually are.”
Here are a handful of Durham companies and their leaders who are up for the job, and what’s helped drive their success:
Top Clients New York City, The U.S. National Archives and Records Administration, State of North Carolina, Obama administration
In the old days, public officials held meetings that were recorded by a stenographer for posterity. In modern times, your school superintendent or county commissioner might send you a tweet. How do governments keep track of it all and meet their obligations under public records laws? ArchiveSocial exists to respond to that need.
“Anybody can engage with their public officials now in a way that historically they never could before,” said CEO Ray Carey. “They’ve always had critically important things to communicate about; I’d argue never more so than now with what’s going on in 2020.
“We need an accurate record of the truth of what happened, even if it’s not pretty.”
ArchiveSocial maintains social media records for more than 5,000 agencies such as city councils, fire departments, public school systems and police departments. The company made history after releasing the first White House social media open archive at the end of the Obama administration. (ArchiveSocial won’t reveal its customers without permission, so no word if they are doing the same for the Trump White House. If you’d like to flashback to the former administration, visit archivesocial.com/whitehouse).
Founder and board chairman Anil Chawla started the company from American Underground in 2011. The computer scientist from Georgia Tech wanted to somehow work with social media. As he began talking with potential customers, they told him they needed a record of interactions with their constituents, and the rest, as they say, is history.
ArchiveSocial received a $53 million investment last year from Level Equity to continue growing, with hopes to reach more of the 70,000 public agencies in this country as well as a few international ones. Carey said they plan to have a staff of around 100 employees by the end of the year. Next year, they could hire six or eight people every month.
“Getting the best people and getting those people aligned in a common direction to work for a common set of goals and a common mission is everything,” Carey said.
Founded In 2001 as StrongAuth, rebranded in 2017
Employees 26 in Cupertino, California, and Durham
Top clients AT&T, Wix, StubHub, SurveyMonkey
It’s annoying when someone hacks your personal Facebook account. But to a company working in finance, medicine or government contracting, a data hack can be an existential threat.
StrongKey sells products to prevent hacks and make them irrelevant through data encryption. In January 2018, the company received $10 million in series A funding from Japanese software company Systena. Since then, StrongKey has grown to 26 employees, with half located in Durham. There are plans to continue growing after COVID-19 is in the rearview mirror.
Pashara Black, PR and content marketing manager, said that interest in data security has grown since the start of the pandemic. Some company leaders have more time to think about IT projects, and most now realize the need to scrutinize the home office.
“They’re no longer in a secure office, so that brings a different level of vulnerability to companies, especially if they’re dealing with sensitive data,” Black said. “Companies are thinking about that: How do I keep my remote employees secure at home?”
StrongKey’s clientele includes big names. The company was recently chosen by the National Cybersecurity Center of Excellence, under the U.S. Department of Commerce, to work on several projects to prevent data breaches and fraud. StrongKey is also a member of the FIDO Alliance, a group of the biggest technology companies working on “solving the world’s password problem” with simpler and more secure authentication.
“In a lot of ways, we’re a company that punches above our weight as far as the customers that we work with,” Black said. She credited much of that to the expertise of founder and CTO Arshad Noor, a public speaker who travels the world to talk about cybersecurity.
COO Jake Kiser also said a successful startup relies on “the ability to somehow discern when to sense the market, listen to the market, respond and adapt appropriate[ly] – and the ability to know the rare occasion when to disregard that and build something new that the market may not realize it wants yet.”
Black said the average consumer hasn’t realized that keeping the internet safe could require eliminating passwords entirely. Industry leaders are looking to replace passwords with touch IDs and other less hackable methods in the future.
“The password that we use to log into social media, websites, banking, was created in 1960,” Black said. “It’s extremely outdated. And so one of the biggest conversations in cybersecurity now is: What’s next?”
Top clients Amazon, Facebook, Hulu, TikTok, Twitter
Sift Media Founder and CEO Jud Bowman is on his third company in the mobile app space, but it’s the first time he’s managed to bring a company to profitability in a year. Sift Media is a spinout from Digital Turbine, which bought Appia from Bowman for $100 million in March 2015. Bowman and three other co-founders launched Sift Media in 2015 and raised $3.25 million in seed funding in 2016. They haven’t needed to raise equity capital since.
That has a lot to do with the automated way in which billions of ads are processed and served to mobile devices through exchanges every day. Sift Media’s algorithm analyzes what apps you have on your mobile devices and delivers ads for new apps that you might want to download. It serves 300 million ads a day that drives 100,000 installs for its partners and advertisers. Those customers pay a dollar or two for each installation.
“No one likes ads, myself included, but you know that’s what pays for the internet, that’s what pays for all the services that we take for granted that are free,” Bowman said.
Though they have a staff of 15, Sift Media’s biggest expense are its servers in Virginia and Singapore that process 50 billion ads a day. In October, the company added a data center in Germany to process ads on the European exchanges.
The company has remained profitable during COVID-19, but it wasn’t easy. Companies in the travel, food service and retail industries froze advertising budgets as soon as the pandemic hit. Luckily for Sift Media, apps in other categories like food delivery, gaming and communications (not to mention TikTok) really took off.
The Greenville native and Durham resident laughed and said there was “not a chance” that he imagined this kind of success when he was starting his first company, Motricity, and graduating from N.C. School of Science and Mathematics. He sees Sift Media’s laser-like focus as instrumental to its success. The team gets together every quarter and votes on three to five priorities. They receive bonuses once those goals are achieved.
“It might be a little radical,” said Bowman, who calls himself CEO in title only. “My view is, if you’re working with extremely smart people … and if they have all the information, they’re going to make good choices.
“You know at some point if we were to hit 50 or 100 employees, I don’t know that the way we’re running a company would scale, but for right now, it’s been extremely effective.”
Top clients The Institute, NC Rural Center, Thread Capital
CEO Bernard Worthy and COO Justin Straight founded LoanWell in 2017 with the goal of generating wealth for those who are often overlooked by big banks. LoanWell provides customized loan origination software for community lending institutions, loan funds and grant programs that provide capital to small businesses and entrepreneurs.
Many of its customers relied on inefficient paperwork to process loans when LoanWell began selling its business-to-business platform last May and can now process significantly more loans. Months later, community funding became unexpectedly critical for small businesses during the pandemic. LoanWell was able to step in for state programs like the N.C. COVID-19 Rapid Recovery Loan Program and RETOOLNC, providing an alternative when lenders and customers could no longer meet face-to-face. The company is now in conversations with similar programs in Virginia.
“The state has really shown up when it comes to relief funding for small businesses in ways that other states are trying to emulate and want to emulate,” Worthy said.
Worthy and Straight talked about their concept for years. Worthy wanted to use his technology background for good. Straight worked in global microfinancing and saw how small loans could be transformational for individuals and their communities. The two friends started their company in American Underground with the goal of accomplishing the same for overlooked entrepreneurs in the U.S. They launched at a Google for Entrepreneurs demo day in April 2017 and received a $50,000 NC IDEA grant soon after. This July, Worthy was chosen for the first Google for Startups Black Founders Fund and provided with a $100,000 non-dilutive investment. The company also raised $715,000 in pre-seed funding from investors.
Straight said that he credits their success so far to their relationship.
“Even with your best networks, you still are going to find yourself in places where you just don’t know what to do next and you have to make a decision because the business will not survive,” Straight said. “And they are going to be imperfect decisions, and you need to have somebody who can walk through with you.”
Worthy agreed, adding that their team is key as well.
“You can have an A team and not quite have the right timing, but still figure it out, or not quite have the product, but still make it happen and pivot to something that works,” Worthy said.
Worthy and Straight would like to grow the company and one day buy a building on Parrish Street. Worthy said he aspires to become a modern-day, social-impact-led Black Wall Street company.
“We want to see communities really thriving, and thriving financially,” he said. “We want to see a more equitable financial world for everyone involved, not just for folks who know how to play the game and the system and folks that the system is designed for.”
Sponsors Cherry Bekaert LLP, Dualboot Partners, Goodwin Executive Search, Fourscore Business Law, Vaco, Jurassic
After selling Bronto Software in 2015, Joe Colopy pivoted from running a startup company himself to investing in startups through Colopy Ventures and Jurassic Capital. He saw all that was happening in the Triangle and felt that the region could do a better job of telling its story. So he founded GrepBeat, a media company that promotes the Triangle’s tech startups through a newsletter, website and podcasts. Before the pandemic, GrepBeat also hosted social events for entrepreneurs to network.
Colopy eventually would like GrepBeat to spin off from Colopy Ventures and become self-sustaining, but he sees the company as having a philanthropic purpose.
“It’s hard to grow media outfits, but we think our mission-based approach versus generating profits, quite honestly, is a good formula,” Colopy said. “We believe in community journalism; we believe it’s something that the community will support because they’ll see the value.”
GrepBeat has an editor and a brand-new director of growth, and the content is produced by a team of student journalists from UNC. The company has sponsors, much like public radio, and eventually might offer memberships with added benefits. But Colopy wants to share his expertise and support with others both as an investor and as a media company. He believes that is “most beneficial to the entrepreneurs who have the least, and I don’t want to create any barriers from that happening.”