Laissez les bons temps rouler, indeed!
New Orleans, a.k.a. the Big Easy, is widely known as a go-to party city for people from all over the world. But looking a bit closer at the businesses growing and thriving, there’s a tech startup scene that’s slowly been developing over the past decade.
For the past four years, New Orleans has been home to the Collision Conference, which seeks to raise the city’s Silicon Bayou profile. Companies like Spotify, Amazon and Facebook have sent their executives out to speak at this conference over the past few years. At this year’s event, speakers included the likes of Reddit Co-Founder Alexis Ohanian, YouTube’s Chief Product Officer Neal Mohan, Instacart Co-Founder Max Mullen, Amazon’s Vice President of Alexa Steve Rabuchin and HP’s CTO Shane Wall.
Before we jump into the post, here are a few quick facts about New Orleans and its tech scene:
- The city had a population of 389,617 in 2015, making it the largest city and metropolitan area in Louisiana.
- GDP of New Orleans and Metairie (Metropolitan Area): $68,468 (2015)
- Median household income (2015): $36,792
- There are more than 271 startups and tech companies
- There have been 22 startups launched since the beginning of 2017
- Total funding for the past 12 months is $5 million
Of note, New Orleans has also made its way up New York FinTech firm Smart Asset’s Best Cities for Women in Tech list, coming in at number five this year. The study showed that while women and men make the same amount of money in math and computer science, women actually comprise a decent amount of that workforce in New Orleans, with 35 percent of the share.
On top of all this, the city has put together a Promoting Pathways to Opportunity Challenge initiative that aims to close the gap on digital improvements to the city’s underdeveloped areas.
In this week’s Tech Center tracker, Lindsay Fox, VP of Sales and Brand Strategy of LookFar, a software startup studio, told PYMNTS that New Orleans is so much more than just a place to party, sharing how the city is becoming a major player in the technology industry.
Here is an excerpt of the conversation:
PYMNTS: Can you describe your personal and/or professional experience with the tech community in New Orleans?
LF: I am originally from Los Angeles, but I spent some time in New Orleans post-Katrina filming a documentary about the music scene. My husband went to school at Tulane. We both knew we loved the city, and so several years ago, we decided to make the move. I had previously been an entrepreneur, and so I knew I wanted to work in the local startup community. At the time, Chris Reade, the president of LookFar, was looking to transition his software development company into one more focused around startups, so I came on board to help with that transformation.
LookFar is now in its third year as a startup studio, and during that time, I’ve been fortunate enough to connect with an impressive community of founders and engineers who are truly passionate about their work in New Orleans. As we grow as a company, our primary goal is to give these individuals the tools and resources they need to rapidly scale their ventures. We’re very much in the frontlines of New Orleans’ efforts to nurture a local startup ecosystem, and I can’t imagine anywhere [else] I’d rather be.
PYMNTS: What do you think makes New Orleans (or Louisiana as a whole) an attractive location for both entrepreneurs and investors? Is there anything people may find surprising about operating a business there?
LF: The most obvious answer is the cost of doing business. Louisiana is consistently ranked as one of the most business-friendly states and has wonderful tax incentives for business owners, especially in the software and digital media space. The Digital Media Tax Credit, which has bipartisan support in the Louisiana legislature, returns roughly $0.33 on the dollar. There is also an Angel Investor Tax Credit that provides a 25.2 percent tax credit when you invest in Louisiana businesses. When you combine those tax incentives with a much lower cost of living, leading to more reasonable engineer salaries, your money basically goes twice as far here as it would on the coasts.
PYMNTS: How does the startup and tech scene in New Orleans differ from other cities in the United States?
LF: Inclusion, inclusion, inclusion. New Orleans is the #5 city in the country for women in tech.
This is a community that made a very conscious choice that women and minorities were going to have a seat at the table. We have a number of amazing startups (Kickboard, Acrew, Glo Airlines) that are led by women and a great pipeline for supporting minority-founded companies (PowerMoves NOLA, Camelback Ventures). My company started the Ada Lovelace Award for Woman of the Year in GNO Tech, and that’s becoming a marquee event for our community.
As a woman in tech, it’s apparent that the industry as a whole has more work to do. But New Orleans is giving it more than lip service, and it has really paid off when you attend a startup event and the room is 50 percent women and every race is represented. I feel confident this is something we can maintain, and even improve, as we keep building our scene.
PYMNTS: What are some of the challenges facing startups in New Orleans? Are there any initiatives to help address those barriers?
LF: Funding has historically been the biggest challenge for New Orleans startups. There is a small, and growing, investment community, but that community has traditionally focused on things like oil and gas and hospitality. Entities like the New Orleans Angel Network and New Orleans Startup Fund are doing a great job of educating those investors and paving the way for a new focus on tech and startups.
The other major challenge is getting people to look past New Orleans’ reputation as a party town first and a business center second. Most visitors’ first experience of our city happens on Bourbon Street (a place you will almost never catch a local), which isn’t really a place that screams “tech hub.” Of course, enjoying life is a big part of the city, but pull back the curtain and you see people working late, building businesses and hustling just like you would in any startup city. I’ve talked with some folks from the Honolulu startup community, and they have the same problem — everybody thinks they’re at the beach all day.
PYMNTS: How has New Orleans’ startup ecosystem changed in recent years? What do you think has sparked this transformation?
LF: Without a doubt, it was Hurricane Katrina that really catalyzed the revitalization of the city. It was an enormously tragic event, but it was an opportunity to take a lot of what wasn’t working and rebuild from the ground up with tremendous governmental and economic support. Katrina rebuilding efforts (programs like Habitat for Humanity and Teach for America) also brought a lot of enthusiastic young people to the city, and a lot of today’s entrepreneurs are individuals who came here after the storm, fell in love with the city and wanted to increase their impact.
PYMNTS: What is New Orleans’ FinTech sector like? How has it changed or grown in recent years?
LF: I think we’re really just now seeing the birth of a FinTech scene in New Orleans. There’s no denying that we’re a bit behind cities like Atlanta or Nashville, who have really thrown their weight behind FinTech, but we’re finally starting to see some of the support that startups in the industry need to succeed. Notably, big local organizations such as Iberia Bank are beginning to invest more in entrepreneurship, and while we haven’t had any big wins from New Orleans FinTech, some founders are starting to enter the industry.
Capway, for example, is a mobile finance app for underbanked users. They’ve been getting some traction locally and have a founder in Sheena Allen, who actually left the South for Silicon Valley at one point, then made a very conscious decision to return and start her company. Zlien is another company that is dipping their toe into FinTech — they focus specifically on payments and invoicing for construction companies that are growing rapidly.
PYMNTS: Which sectors of the technology landscape are thriving in New Orleans? How do you see these industries evolving in the coming years?
LF: The question isn’t whether great startups can be founded in New Orleans. The real question is: Can we keep them here? I think it would be foolish to say that we’re the best place in the country for every startup. However, there are some industries where we have a strong, established business community, and so I tend to think startups in these verticals are the ones most likely to succeed. These “native industries” are things like healthcare, education, energy and culture.
For healthcare, Tulane and LSU medical schools have produced a ton of market-ready tech, and we’ve recently begun to see some progress made in commercializing it. 2017 has already seen four early-stage companies — RDnote, Advano, Fluence, BioAesthetics — pick up seed funding or join major accelerators.
For education, we have a really great EdTech accelerator in 4.0 Schools and a lot of smart young people who are veterans of New Orleans schools. One of the big, early success stories of our startup community was Kickboard, and now Torsh and Catalyst:ED are picking up steam.
Culture and creative industries are an obvious easy win for us — New Orleans has always been known as an artsy town. So you see a lot of travel apps, a lot of non-traditional agency models, a lot of content distribution platforms and music technology. There is obviously a ton of passion and excitement around giving people great experiences and promoting art.
PYMNTS: Is there anything else you think people should know about New Orleans’ role as a global tech center?
LF: I think what I want people to start considering is: Can we afford (economically, socially and politically) to keep tech innovation siloed in a few select cities?