Wilmington: A Tech Mecca?

Chemical companies are moving out or are already gone. Now investors and civic leaders hope the city can attract technology startups and related businesses to fill the economic void.

It’s official: Wilmington is no longer the chemical capital of the world. And, truth be told, it probably hasn’t been for some time.

Hercules is long gone, and the DuPont Co. abandoned its downtown headquarters last year, leaving behind Chemours, a struggling stepchild spinoff that has not made a long-term commitment to the city. Meanwhile, DuPont, on the heels of announcing its planned merger with Dow Chemical, is shedding 1,700 Delaware jobs, 28 percent of its workforce in the state, by the end of March.

So the question is, what will drive the economy of the state’s largest city as we move deeper into a new year?

The answer might reside in the assertion of Ben du Pont, a venture capitalist and the son of former Gov. Pete du Pont: “Software is kind of eating the world.” Every company, du Pont believes, is becoming a software company.

So he and other investors and civic leaders are hoping that Wilmington can become a mecca for tech-savvy software chefs and line cooks capable of creating and serving up the new apps and programs the business world is waiting to gobble up.

Those involved in downtown Wilmington’s growing tech community—a mix of small businesses, freelancers and coworking spaces stretching along Market Street—seem confident that it can happen—it’s done right.

But the script for doing it right is still being written, and the techies’ crystal balls offer only a cloudy vision of what that future might look like.

A fertile ground for new initiatives

“I think Wilmington is at a tipping point, and it’s exciting to see,” says du Pont, who is a descendant of both E.I. du Pont de Nemours and Benjamin Franklin.

“This is Delaware’s opportunity to make a change, to make the ground fertile for new initiatives,” says Scott Shaw, chair of the Game Design and Development and Video and Motion Graphics programs at Wilmington University.

In the broadest sense, Shaw says, “We’re on the cusp of emerging into something new. We have all the magical parts of technology accessible to a lot more people in many different ways.”

He points to 3-D printing, a technology developed in the 1980s that has approached maturity in the past 10 years. 3-D printers, and the software to use them, are now available at public libraries, and you can buy one for home use for about $350, he says.

“The new technology is emerging right in front of us,” Shaw says. “People are able to make products on their own.” In fact, a 10-year-old boy from Claymont recently created a prosthetic hand for himself at the Wilmington Library.

While there’s a highly visible magic to the creation of prosthetics, jewelry and replacement appliance parts on 3-D printers, a key portion of the magic formula to develop a new workforce for Wilmington is education—the education of coders, the people who design, write, develop and maintain the software programs and applications that keep modern businesses humming.

Coding boot camp

“I look at coding as the manufacturing of the 21st century,” says Ryan Harrington, education coordinator at 1313 Innovation, housed in Hercules Plaza at 1313 N. Market St., once the headquarters of Hercules Inc. “You have smartphones, you have smart cars, you have smart refrigerators, you have smart everything—and it takes a fleet of people to maintain that.”

Stepping in to fill that void is Zip Code Wilmington, a nonprofit coding boot camp founded by du Pont, investment advisor Porter Schutt and Jim Stewart, the founder of Juniper Bank (now Barclaycard) and current CEO of Epic Research.

In researching the viability of a boot camp, the partners surveyed area businesses and found that “600 jobs were available immediately,” du Pont says.

Armed with funding from foundations and sponsoring businesses, which had input into the curriculum and made commitments to hire graduates, Zip Code Wilmington launched last fall. The first 17 students to complete the 12-week program have secured jobs paying an average of $55,000; a second class of 32 students started in January and a third is planned for April.

Coding academies are too new to enable comparisons of career prospects for their graduates with those who have four-year degrees in computer science, but the boot camps offer a more intensive curriculum at a considerably lower cost than a degree program.

“Today’s students like the idea of an intensive 90-day boot camp where you come out with real skills,” du Pont says.

A burgeoning tech scene

Zip Code Wilmington adds a layer to the burgeoning tech scene, whose start can be traced back a decade or so to the arrival of Trellist, digital marketing consultants, and the Archer Group, a digital marketing firm, in the LOMA district.

The latest surge began with the opening of the coIN Loft coworking space, which has morphed into Start It Up Delaware and moved into the second floor at 605 N. Market three years ago. That was followed by the opening of 1313 Innovation in the Hercules Building. Both offer solo entrepreneurs and startups short-term use of desk and office space, with access to printers, WiFi and other services. They also sponsor a wide array of events for techies and anyone interested in learning more. A third coworking space, The Mill, is about to open in the Nemours Building.

“I’ve been working in the city since 1995, with MBNA and with the city, and I’ve never seen anything like this before—so many startups and these little clusters and groupings of startups,” says Jeff Flynn, Wilmington’s director of economic development.
The changes parallel changes in business operations and technology, he says.

“In the ’90s, all the technology was wrapped up in the banks and DuPont—mainframes and distributive systems. Here we are 20 years later, in the mobile age, with big data, more access, broadband and the corporate community changing a bit,” he says.

MBNA is gone, taken over by Bank of America, and many people who used to work for MBNA or the other big banks have started their own businesses, he adds.

For example, Digital Vikings, an innovation, ideation, prototyping and design operation based in 1313 Innovation, is led by former tech experts from ING Direct, which was bought out by Capital One.

While many of the new entrepreneurs are still trying to develop a big idea that will accelerate their development, a few have made connections with larger organizations to propel their growth.

Carvertise, which launched itself from the coIN Loft, then moved into 1313 Innovation and now has a separate office in Hercules Plaza, has secured contracts with the state Tourism Office, Shop-Rite supermarkets, Discover Card and the United Way of Delaware. All of them have bought into Carvertise’s unique marketing concept—paying drivers to have their cars wrapped with their clients’ advertising messages and regularly driving their cars through the geographic areas the clients want to target.

One model for the tech entrepreneurs to follow is the Archer Group, whose early successes included some relatively small projects with local credit-card banks before it secured a digital marketing contract with Wawa convenience stores.

LOMA’s success, despite naysayers

Todd Miller, Archer’s chief experience officer, was with the firm at its start in 1999, in small offices near the Amtrak station.

When Archer decided to move into LOMA, he recalls, “there were so many people who were naysayers,” who thought the development of Lower Market Street would fail.
The success of LOMA is reason to believe that all of downtown Market Street from LOMA to Hercules Plaza could blossom into a vibrant tech district. “It’s getting there, but it’s delicate. It could backfire,” Miller says.

One danger seen by Miller and others is the tendency of new businesses to “work in silos,” to go it alone when they could benefit by more collaboration.

“I worry that we might get too decoupled from each other,” says Tim Savery, a tech executive at Chatham Financial, a Kennett Square-based firm that sponsors and supports many tech-related activities in Wilmington. “We have enough coworking spaces, but do we have enough people in those spaces in the right industries to fuel growth?”

Start It Up Delaware and 1313 Innovation are striving to keep the entrepreneurs from retreating into silos.

Last year Start It Up invited 1313 Innovation to partner with it as a sponsor of the monthly Delaware Tech Meetup gatherings, and there are plans to invite The Mill in as another copartner, according to Start It Up Managing Director Mona Parikh.

1313 Innovation last year hosted more than 100 events, ranging from meetups to cocktail hours, “all designed around building a community, with different faces and different viewpoints,” Harrington says.

Girl Develop It, a meetup for women interested in learning about coding and technology, meets there regularly. So does Open Data Delaware, a group for civic-minded hackers who promote open government and are interested in mining government data to identify trends and solve problems. Barrel of Makers, whose members integrate technology into their passion for arts and crafts, also uses 1313 Innovation as a meeting space. On top of that, 1313 Innovation is developing a partnership with the Delaware Center for the Contemporary Arts that will help the museum better focus on its newly defined mission—“to explore the intersection of art, design and technology,” Delaware Contemporary Executive Director John Shipman says.

1313 Innovation is also the lead sponsor and prime organizer of Tech2gether, a daylong collection of meetups, workshops and entertainment held in November.
The opening this summer of a Wilmington annex to Philadelphia’s NextFab makerspace will add another dimension to the dynamic of the city’s tech community, Flynn says.
While these developments are positives, the impact of the first-quarter layoffs at DuPont threatens not only the livelihood of 1,700 families but also the economic vitality of the region.

“It’s a very scary notion that DuPont is leaving,” Savery says. “The question is how to create an opportunity out of something that could be a big mess for us.”

Reaching out to displaced DuPonters

Wilmington’s tech community is eager to reach out to the displaced DuPonters.

“Those 1,700 extremely bright, extremely well-educated people would really be a loss,” Harrington says. “We could help them build their own businesses. We don’t have much experience with the chemical world, but we do have experience with small business.”

Some of those DuPonters might be interested in the Zip Code Wilmington boot camp as a way of starting a new career, du Pont says.

“Right now, they might not think of this as an opportunity,” he says, “but sometimes the things you think are devastating initially can turn out to be the best things that ever happened.”

Flynn recalls layoffs in the late 1990s not only at DuPont but also at MBNA. “We’ve already seen it,” he says, referring to laid-off scientists and financial experts rebounding by starting their own businesses.

While tech businesses have the potential to become a major force in Wilmington’s business structure and its economy, those close to the situation remain uncertain as to how those businesses might evolve.

Might it be dominated by freelancers, or businesses with a handful of employees, or firms that grow to employ 50 or more, as Archer did in digital marketing? Will they work in storefronts, in larger office buildings, in coworking spaces, or in their homes?

And what sort of products will they create? Will it be new mobile apps for banks, a breakthrough in storing legal documents, or something we can’t even imagine today?

“It’s all of the above,” says Greg Shelton, marketing director for McConnell Johnson Real Estate, property manager of Hercules Plaza, and for Digital Vikings.  “For me, it’s the agency model that’s sexy—where I could be working on a banking platform on Monday and a couple days later for a packaging store that’s working to change its business model.”

“I see more mixed-use buildings filling up with these small firms,” Flynn says. “Instead of a law office, we’ll see a building with two or three startups.”

“I think it looks like 50 startups five years from now, some of them going on to be great companies, a lot of them going out of business, and another 50 coming in to replace them,” du Pont says. “I think it looks like a robust startup community.”

One reason the future looks promising, the tech professionals agree, is that the increased housing opportunities downtown, coupled with improving dining and entertainment options and plans for developing a Creative District west of Market Street, are making Wilmington a more attractive place for Millennials to settle.

“Culture is a driver for investment in technology,” Archer’s Miller says. “And when there are more young people sticking around, they become part of an ecosystem that’s growing.”

In addition, du Pont says, the costs of starting a business—in terms of personnel and office space—are lower in Wilmington than in tech hubs like Silicon Valley, and there’s the added advantage of easy access to big cities like New York, Philadelphia and Washington.

Moving forward successfully, Shaw says, will require a collaborative effort, with tech leaders from education, government and all sectors of business working hand in hand.

“It’s not something one organization can achieve by itself,” he says.

So, what do you think? Please comment below.