Seizing the Moment
New Orleans has always welcomed the unique and the creative; just think of the Mardi Gras revelry, the city's jazzy soul, the vibrant Creole and Cajun cultures. But it was almost never the place entrepreneurs thought of when they were ready to set up shop. Any prior associations between business and New Orleans were more likely related to big industry confabs at the city's Ernest N. Morial Convention Center and the staggering conventioneers on nearby Bourbon Street. Even longtime residents were challenged by the notion of New Orleans as a startup city: They knew the back-office machinations of government and old-line business practices would make it difficult to transform entrepreneurial thinking into a thriving young business community.
That all started to change in late August of 2005. Hurricane Katrina brought unspeakable tragedy to New Orleans and the other Gulf Coast regions it hit. More than 50 levees and floodwalls gave way, flooding 80 percent of the city. Endless media coverage locked in images of the city's devastation and the years of blight that followed. But if the storm did nothing else for New Orleans, it began to wash away an outdated, stifling way of doing business.
"The city had kind of a parochial, non-diversified business community," says Robbie Vitrano, co-founder and CEO of Trumpet Ventures. Vitrano started Trumpet 10 years ago as a branding firm; in post-Katrina New Orleans the outfit cultivates startups focused on digital media and other disciplines new to the region. "Katrina disrupted people's comfort zones and forced them to confront some of the issues of the past," he says.
Tim Williamson, co-founder and CEO of The Idea Village, is a Louisiana native and one of many professionals who left early in their careers and eventually found their way back. He and his group have been pushing to attract entrepreneurs to the region for more than 10 years. Until 2005, however, New Orleans remained dominated by the manufacturing, oil and gas industries--and a reputation for being a closed-off business community.
"We were so dependent on the major industries, people didn't think they needed entrepreneurship," Williamson says. "What Katrina did was fracture the old networks and help create new ones. What was missing in New Orleans was more people like us."
By the end of December 2008, The Idea Village alone had counseled more than 245 New Orleans entrepreneurs, representing 935 jobs and more than $67 million in revenue. In March of this year, the group hosted 50 students from MBA programs around the country who were in New Orleans as part of the IDEAcorps Challenge '09--a sort of live version of The Apprentice, save The Donald and the made-for-TV melodrama.
The Idea Village launched the annual event in 2006 to match MBA students with early stage business ventures in the city. A few years ago, those students might have hit the town for Jazz Fest or to soak up the French Quarter nightlife--but not to rub shoulders with entrepreneurial businesses or explore New Orleans as a place to launch their own initiatives.
But they might now--particularly considering the incentives available to businesses post-Katrina: multimillion-dollar boosts in capital investment; tax incentives that can give back as much as 40 percent of the cost of a project; a critical mass of young businesses taking root here; and an influx of innovative, ambitious workers and housing that costs less than many other metropolitan regions.
The New Orleans metro area added 5,900 jobs between May and November 2008--nearly three times the 2,100 added in the previous six months, according to the most recent figures available from The New Orleans Index, a collaboration of the Brookings Institution Metropolitan Policy Program and the Greater New Orleans Community Data Center. By January, according to the index, the New Orleans metro area reached 73.7 percent of its pre-storm population.
"People are more open to newer things happening," says Joel Dondis, a leading figure in the New Orleans culinary scene. After serving as sous chef to famed New Orleans restaurateur Emeril Lagasse, Dondis opened La Petite Grocery and two catering outfits, but the latter ventures were nearly wiped out by the storm. Two other government catering jobs saved him, he says, allowing him to pump money back into his businesses and even launch two new ones: the Warehouse District eatery Grand Isle, and the upscale sweet shop Sucré, which is nestled in a row of chic Garden District boutiques on Magazine Street.
Across town, in Elmwood, a former Winn-Dixie warehouse complex on 25 acres of land was recently recast as a full-feature-film studio--and quickly, to accommodate the needs of Sylvester Stallone and his multimillion dollar production of The Expendables, an action-adventure written, directed and starring Stallone and featuring Arnold Schwarzenegger, Mickey Rourke and Jason Statham. In April, crews were carving props out of Styrofoam and scrambling to assemble the fuselage of a military aircraft inside some of the studio's 525,000 square feet of warehouse space that will eventually be converted to soundstage.
"We came at this thing in a rush; this $60 million production was looking for a place to live," says Wayne Read, CEO of Louisiana Film Studios. "We knew we had to either step up and support this critical industry or it was going to go elsewhere."