Why ‘Start It Up Delaware’ is leading Wilmington as the First State’s tech hub

In the low light of a single lamp on the dark, unfinished floor of a historical commercial building in Wilmington, Delaware, sit a handful of entrepreneurs trying to sell ugly sweaters.

None seem to suggest it’s their path to fame or fortune just yet. For now, it’s something of a hobby for this team of developers and designers who met through the coIN Loft coworking space on Market Street in the First State’s biggest city. The idea for UglyOutfitters.com, which is, yes, a quirky, viral-ready ecommerce site for ironic sweaters, came out of the last Startup Weekend Delaware.

“We all need a little more ugly in our lives,” said the site’s cofounder Brad Wason, a personable civic hacker, with the kind of self-deprecating humor that comes from community organizers in lagging tech scenes today.

In 2010, the coIN Loft was launched by three Wilmington technologists who wanted the access to community and hub for innovation that they found in bigger cities. Today, coIN continues to be that hub for early-stage creative class tech in a state that often exports those residents to the larger tech communities of nearby big cities like Philadelphia.

Now the space is managed by Startit Up Delaware, a modest, $250,000 catalyst project backed by Governor Jack Markell and a well-connected board, which includes coIN cofounders Wes Garnett and Steve Roettger, who is also part of the UglyOutfitters.com team. This spring, the coworking space is scheduled for a long overdue renovation, said Mona Parikh, the bubbly, 30-something lawyer turned Start It Up Delaware managing director. With its build-out the space will have 40 desks and private offices, plus two conference rooms and a proper kitchen, and officially formalize the space’s public launch four years after the idea first came together.

For now, the meetups and collaborations continue to take place on dusty plywood under the high ceilings of an otherwise beautiful building at 605 Market Street in downtown Wilmington. In proper slow-burning coworking style, the coIN crew has spent the last four years building up a reputation and a community.

“Now we just need a few walls,” said Parikh, with a smile. The state money is making that possible and is meant to kickoff a sustainable model of classes and desk rentals built around an already established core community.

The goal here is to attract and retain the kind of mobile, Millennial, web-savvy creative-class technologist that is helping to fuel Web 2.0 tech booms elsewhere. Because Delaware already has its network of established tech business success stories and support groups:

• FingerWorx, built on University of Delaware technology, was part of an already legendary acquisition by Apple for the basis of its iPhone touch screens.
• HostMySite.com is a home-grown hosting support company that, after its spring 2009 acquisition of Hosting.com, has grown into one of the state’s best known tech firms and one of its anchors, with more than 200 employees in a Newark, Del. business park.
• The digital marketing Archer Group and IT management firm SevOne have built prominent businesses that have reached into Center City Philadelphia, each opening satellite offices there for tech talent.
• Trellist, the digital marketing consulting firm that is hungrily growing by acquisition, anchors the Wilmington Market Street corridor.
• The Delaware Tech Park is a Newark, Del.-based business park hub for life sciences and pharma research that comes from UDel or elsewhere.
• Christiana Health Care and HighMark form the state’s healthcare anchor.
• Universities in the state are blessed with an agitating group of leaders. The University of Delaware has a newly launched Horn Program in Entrepreneurship incubation-space headquarters led by Dan Freeman, Wilmington University has a gamification program led by Scott Shaw and Delaware Technical Community College is itself getting into the small business growth mood of the moment, hosting Kauffman Foundation’s 1MillionCups program.
• Engineering firm ILC Dover has designed and manufactured every American space suit since the Apollo space program origins and it continues today.

“Who knew Delaware had any of that?” asked Garnett, the coIN Loft cofounder and cheeky tech scene steward, at a recent Delaware Tech Meetup, which he cohosted with Parikh. (Full Disclosure: this reporter spoke at the event.)

Those groups represent much of the institutional infrastructure for a tech renaissance to happen there, in addition to Markell’s state government work, which has taken kindly to the nationwide entrepreneurial fervor by way of its Delaware Economic Development Office, among other agencies.

There are just 900,000 people in the entire state of Delaware, barely half as many as in the City of Philadelphia — only Vermont has fewer residents among East Coast states. Its business community is too small to compete against itself, which means Delaware technology leaders should be, and often are, motivated to develop a statewide identity.

“That’s why Start It Up Delaware makes sense,” said Parikh, enunciating the state name in the brand. Wilmington is a natural base for their work, she said, but their attention includes state government innovation in Dover, university research out of Newark, agribusiness and the sciences downstate and, of course, the “scenes at the Rehoboth and Dewey beaches.”

Indeed, rather than a challenge, the state’s size is often sold as a benefit — some in the community boast of having members of their Congressional delegation in their cell phones — but there still is a need for greater continuity in identity.

Start It Up Delaware, with the coIN Loft as its headquarters, is hoping to be that.

Following the national trend, there is new energy around urbanism here, so many, including the SIUD crew and economic development group Downtown Visions, are working hard to angle Wilmington as the state’s natural gateway to the wider world.

This is both because of its glassy skyline of financial firms brought here by tax leniency and the density of this 70,000-person small city, helped by a train station serviced by both SEPTA and Amtrak.

The trouble is that Wilmington has a perception problem around crime and schools that put it in the middling pack of small satellite cities of Philadelphia. It has more industry than Camden, Chester and Lancaster city and more density than Harrisburg and Atlantic City but less creative class resurgence than Collingswood, West Chester and Media.

The bankers who fill those skyscrapers largely drive from their suburban homes to their offices and leave right after work. This town’s lunch crowd isn’t known for becoming an evening one, despite all the larger-scale big economic impact efforts, from the riverfront and minor league baseball stadium development.

Wilmington’s Market Street is no city’s commercial corridor of choice, nor will it be anytime soon, but it has the kind of potential that could attract people who like solving problems, something technologists are known for. Unlike the big skyscrapers, Market Street is built on a walkable human scale, with density, mixed-use storefronts and access to transit, jobs and other amenities.

“Market Street is something that still needs a lot of attention but could be really special,” said Parikh, while walking out of the coIN Loft one night. “The tech scene wants to be a part of that.”

From the aforementioned Trellist headquarters to the coIN Loft itself to the Delaware College of Art and Design to the Queen Theater, a handful of bars and restaurants and limited retail space, including the endlessly cool Spaceboy, there are real anchors, but without a performance at the Queen, pedestrian traffic is low and a walk to that nearby train station is called a risk by some.

But SIUD isn’t alone in its innovation class approach to Wilmington renaissance.

Commercial real estate firm McConnell Johnson has launched its own ‘innovation center’ to be a new tenant entry point inside its Hercules Building, a short walk from the Queen. Indie Game Stand is a popular pay-to-play gaming site based in Wilmington, thanks to founder Michael Gnade, and the Barrell of Makers group is agitating to launch its own maker space but already hosts events at the Creative Vision Factory, just off Market Street.

Said Parikh of what comes next: “the hard work is bringing it all together and making sure more people know this is happening.”