Civic News

Startups are moving to Chattanooga because of its city-owned gigabit network

Many U.S. cities boast a lower cost of living and higher quality of life than Silicon Valley and New York, but Chattanooga has one utility most don't: ultra high-speed municipal broadband.

Chattanooga, or "The Gig City." (Photo by Lawson Whitaker)
This is a guest post by Charles Wood of the Chattanooga Area Chamber of Commerce.

This month, the city of Chattanooga, Tenn., hosted its third annual Startup Week.

A celebration of Chattanooga’s entrepreneurial community, Startup Week featured community-led events with local startup founders, thought leaders and investors. To those in Chattanooga, the evolution of Startup Week reflects the greater evolution of Chattanooga into a tech hub since the launch of our municipally-owned citywide gigabit network in 2010. With access to high-speed internet, affordable operating costs and high quality of life, it’s easy to see why startups are moving to Chattanooga to build their business. (For my part, I moved here from Florida, trading the beach for the mountains, to head up economic development at the Chattanooga Area Chamber of Commerce in 2012. My wife and I live downtown and we love Chattanooga, where we can blend living downtown with enjoying the outdoors — hiking, camping, kayaking.)

Since the introduction of the gigabit network, or “the gig,” as its known, Chattanooga’s economic profile has transformed, with an influx of startups —specifically in tech — flocking to our city. Installed and managed by our municipal utility EPB, the gig network brought internet 200 times faster than the national average to all residents and businesses, making Chattanooga the country’s first “Gig City.” In just six years, the gig has already had a marked effect on the local economy, attracting talented entrepreneurs to Chattanooga and growing our tech scene.

A recent report by the Ewing Marion Kauffman Foundation on Chattanooga’s entrepreneurial ecosystem credits the gig as one of four key reasons why Chattanooga has cultivated such a dynamic entrepreneurial hub. In addition to bringing startups to Chattanooga, the network has generated at least 2,800 new jobs and added at least $856.3 million to the economy, according to a recent independent study from the University of Tennessee at Chattanooga.

In 2015, EPB upped the ante and introduced 10-gigabit speeds. At this speed, users have enough bandwidth to simultaneously stream 1,754 HD movies online from a single internet connection without any lag time or buffering. While such a high speed may not be commonly needed now, it certainly opens the door for future technology and innovation.

The Tennessee River

Chattanooga’s gigabit network sparked an accelerator called GIGTANK that has drawn startups to the city. (Photo by Doug Barnette)

In addition to our renowned gig network, budding tech companies benefit from a range of local resources. Startups like Branch Technology, which uses the world’s largest freeform 3D printer to make building walls, find a home in the Hamilton County Business Development Center’s INCubator — a 127,000 square foot incubator, the largest in the state of Tennessee. Branch, which relocated to Chattanooga in 2014 from Montgomery, Ala., after participating in GIGTANK, a boutique accelerator for startups developing ultra-high bandwidth applications, sponsored by startup accelerator The Company Lab — takes advantage of the gig’s high speed to upload and download the large files needed in the 3D printing process.

Companies seeking for mentorship and investment need look no further than venture incubator Lamp Post Group, which boasts portfolio companies from Torch, the creator of a smart router that helps parents monitor their children’s internet usage, to Bellhops, an on-demand service for moving help. Bellhops, which moved to Chattanooga in 2012 from Birmingham, Ala., to take part in Lamp Post Group’s incubation program, has since grown its technical team by sourcing from area talent and expanded into multiple cities, while recently securing $13.5 million in Series B venture funding in a round led by Silicon Valley investors Canaan Partners. My son, who got his undergraduate degree in entrepreneurship, interned at Bellhops to see what it was like to work at a high-growth startup.

As companies look beyond typical tech hubs like Silicon Valley and Boston, many choose Chattanooga for its affordability and high quality of life. SmartAsset recently ranked Chattanooga as the city with the lowest startup costs in the U.S. Its study found that the cost of running a business in the first year in Chattanooga is half that of Silicon Valley, with the cost of office space and utilities (including EPB’s gig network) playing a key role in the city’s affordability. The low cost of doing business is attracting entrepreneurs who are looking to quickly and affordably scale their businesses, whose growth is often stifled in more cost-prohibitive cities.

Chattanooga is also an excellent and affordable place to live, helping rapidly-scaling companies recruit talent. With an average median home price of $172,000, Chattanooga boasts a lower cost of living compared to its traditional tech counterparts. Twice voted OUTSIDE Magazine’s “Best Town Ever,” Chattanooga’s flourishing outdoor scene, from mountain biking to paddle boarding and hiking and growing number of restaurants offer residents plenty to do outside of the office.

If you don’t believe me, take it from from our burgeoning startup community.

As Platt Boyd, founder and CEO of Branch Technology, put it: “Chattanooga checked all of the boxes on our ‘must have’ list on where we wanted to build our company. From its fast internet speeds, entrepreneurial community and 3D printing network, Chattanooga is the perfect place for us to continue to grow our company.”


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