Downtown Durham is a Great Place to Start a Company, but Not to Scale One
First, I should say that I’m a big fan of downtown Durham, NC. In 2014, we moved my first company, Automated Insights, and our 30+ employees from RTP to downtown Durham, in part, because of the growing buzz around the area and amenities of an urban setting. At that time, downtown Durham had started to see the fruits of a major, decade-long revitalization effort. Gone was the reputation of a sketchy, unkempt city to that of a local destination known for some of the best restaurants and entertainment options in North Carolina.
Plus, we got a good deal to be the first startup tenant in the restored Diamond View I building on the 4th floor overlooking the Durham Bulls Triple-A baseball field. For a company filled with a bunch of sports fans, it was perfect for us. We had one of the best office views in North Carolina and all the cultural benefits of being in a mid-sized city!
But as Automated Insights grew and downtown Durham became a more attractive location, the supply and demand curves crossed making it a less comfortable place to work.
The roads became more congested getting in and out of the city. It became harder to find parking. Parking went from free around town to metered. Construction started popping up everywhere. Real estate prices in the city went up, pushing out some long-standing businesses to make room for high-rises. With the improvements and money pouring in, the gentrification of downtown Durham has been predictable and undeniable.
A new start
In November, I announced that I was going to lead a new company, Infinia ML. Our initial office above Rue Cler (a great French restaurant) in downtown Durham was the perfect location for a Duke spin-out not far from campus. We subleased ~3,000 square feet from Archive Social. The CEO of Archive Social, Anil Chawla, had done such a great job building his company that he ran out of space and needed to move.
The office couldn’t have been a better fit for our initial needs. We planned to grow to 20–25 employees by August 2018, which is when the sublease runs out and we’d need to find a bigger space.
Also, after an all-too-brief stint hanging out on the UNC campus, I enjoyed being back in downtown Durham. I like working in a “city” with access to all the amenities it offers. The big question is what would we do after August. Would we stay in downtown Durham or move elsewhere?
Stay or go?
I started scoping out new office locations in downtown Durham during February 2018. When a company is under 100 employees, you want to start evaluating your real estate options roughly six months before your current lease runs out to give enough time to find a few options, negotiate the lease, prepare to move, etc. As the size of the company goes up, so does the amount of time needed to move.
There was definitely a preference to keep Infinia ML in downtown Durham. We were already there, so employees were used to that being our location. It was close to Duke, so our chief scientist and others that needed to visit Duke often had a short commute back and forth. Many of our employees enjoyed the benefits of working in a downtown area with easy access to coffee shops and restaurants.
But as I started to look for offices that could accommodate 7,000–10,000 square feet with a 2–3 year lease, reality set in about our options, or lack thereof. There just weren’t many locations that supported our needs in downtown Durham.
After realizing that it wasn’t going to be easy to find something, I started examining the pros and cons of staying in downtown Durham versus moving somewhere like Research Triangle Park.
Research Triangle Park
RTP has had a mixed reputation as a location for startups. My first job out of college in 1996 was in RTP at IBM’s now defunct Networking Hardware Division (fun fact: my original office was in the building that now houses The Frontier). During the dot-com boom and bust, there was a steady stream of chatter about wanting to make RTP the “Silicon Valley of the East.” But RTP doesn’t compare. I lived in Silicon Valley from 1997–2002, so I know the differences first hand. I always thought it’s best for RTP not to emulate Silicon Valley (partly because I wouldn’t start a company in anything resembling Silicon Valley, but that’s another story.)
RTP has not been attractive to startups because it’s mostly filled with large corporate office parks. With the overall migration to more urban areas, especially for younger people, on average a young entrepreneur would rather work in a city than in a more sterile corporate park.
I feel the same way (even though you can’t call me a “young” entrepreneur anymore.) HOWEVER, there are downsides to city life, which I’ve already touched on. If I could get some of the city amenities (i.e. walkable access to restaurants) in RTP, that could be a good alternative.
There is one such area in RTP. In fact, the very first office we moved into for Automated Insights in 2010 was located at the intersection of Miami Blvd and Slater Road. It’s just two minutes from I-40, four minutes from 540. It has an increasing number of restaurants within walking distance. Now they have as many restaurants within a walkable distance as you get in downtown Durham.
As I was talking to real estate brokers, we found an office available with about 7,500 square feet in the Imperial Center area not far from my old office in RTP. It was a viable option for us, so I had to make a decision about where to go.
There are tradeoffs between working somewhere like downtown Durham and RTP, so I made a list. This is what I came up with:
Pros of downtown Durham
- Walking distance to many interesting restaurants — Mateo, Luna, Beyu, etc.
- Close proximity to interesting venues — DBAP, DPAC, etc.
- Close to the Duke campus
- City “vibe” / cultural diversity
- Short move from current office
- Bus stop and rentable bicycles are very close
Cons of downtown Durham
- Low vacancy rates, high lease rates, and long lease durations, which mean limited options
- Limited, expensive, and inconvenient parking options
- Long(er) commutes for Cary/Raleigh employees
- Limited access to Raleigh talent pool and points east due to long commute
Pros of RTP (1009 Slater Rd.)
- Can hire from anywhere in the Triangle — Raleigh (NCSU), Durham (Duke), and Chapel Hill (UNC)
- Less expensive lease rates ($50K per year less for 7K sq ft)
- Walking distance to many restaurants (Starbucks, Mez, Page Rd Grill, Jimmy Johns, etc)
- Parking is plentiful and accessible
- Commute times for the company overall will decrease by 25–30%
- Very close proximity to airport
- Bus stop in front of building
Cons of RTP (1009 Slater Rd.)
- Office park “vibe”
- Increased commute for people coming from Duke
- Disruptive change of location for employees without a car
- Longer move from current office
It’s All About the People
The list is fine, but some items on the list are more important than others. In the early days of a startup, you have important hires to make, but you are not doing it in large quantities. If you are in a high growth market or have achieved product-market fit, it’s often time to start scaling up the company. Access to talent becomes more of a concern.
At Infinia ML, we have been growing quickly and will continue to do so for the foreseeable future. We’ve had a significant amount of interest in our job openings, but even still, we’ve had a hard time convincing candidates that live in Raleigh or points east to do the commute to downtown Durham. Ruling out much of the Raleigh area from our pool of candidates is not something I take lightly.
Below is a map of the Triangle (Raleigh-Durham-Chapel Hill). The marker represents the location of the RTP office we were considering. You can see it is just about in the center of the green triangle.
Below is an image of the Triangle with circles that have a radius of 15–20 miles representing a “reasonable” commute. Downtown Durham is the red line and RTP is blue:
Obviously, a simple circle like this doesn’t precisely measure “reasonable” commutes but consider it a rough guide. The red line misses a lot of Raleigh and anything east and south. The blue line includes part of Hillsborough all the way to Garner as well as all of Durham down to Holly Springs. Many people certainly commute outside of these circles, but much beyond them and the commute times start to become more impactful to your quality of life.
Back to RTP
After looking at all the pros and cons and considering our need to grow in the future, the decision was pretty clear. My first job out of college was in RTP, and 22 years later, we’re going back there. A lot has changed since then, but I think 1009 Slater Road with all the restaurants within walking distance (Mez, Starbucks, Page Road Grill, Bojangles, Jimmy Johns, etc.), proximity to I-40 and 540, five minutes to the airport, and centrality within the Triangle make it a pretty ideal place to scale up a company.