The Key to Chattanooga’s Renaissance is Small Business Development
Cities looking to Chattanooga as a model should begin with the overlooked foundation of its success.
A midsize city looking toward resurgence, Chattanooga was in need of cultural change and economic ignition.
Young leaders looked to small business as the key to any future success of the city, and started The Company Lab to democratize entrepreneurship.
Chattanooga is now a thriving city, the ultimate destination for remote workers, outdoorsmen, restaurateurs, and techpreneurs. It boasts a thriving small business scene in addition to a rapidly-expanding economy.
Relevance & Renaissance: How Small Business Support was Foundational in Chattanooga's Success
Many who are familiar with Chattanooga will attribute these accolades and recognition to the city’s broadband initiative in 2010, the various tech startups located in the city, or the large companies (like Volkswagen and Amazon) that chose to build warehouses and factories nearby.
But what relatively few people understand is that Chattanooga’s recent journey to prominence began with a focus on the artists and small businesses that traditional economic development tends to overlook.
Of course, high-growth tech companies and manufacturing giants are high-value assets to any city. Chattanooga has all of these today, but they were not the initial catalyst for the city’s growth. It was by focusing on grassroots entrepreneurship, artists, and creatives ten years ago that Chattanooga laid the groundwork for the competitive edge it now boasts.
The Company Lab, a powerhouse behind this new focus, celebrated its tenth anniversary in 2020; CO.LAB (its informal name) was founded as part of a local revitalization effort during the heart of the Great Recession.
At that time, Chattanooga was struggling to emerge from a cloud of socioeconomic challenges present since the 1960s. Vacant buildings, deteriorating infrastructure, crime, social division, unclean air, racial tension, and corporate flight were the consequences of a number of hurdles in the mid-1900s.
After a push to revitalize the riverfront downtown in the 1990s—including the opening of the Tennessee Aquarium and the 13-mile Tennessee Riverwalk—progress stalled in the 2000s. Large public projects and investments did, however, provide a setup for a new generation of visionaries to step up to the plate.
Local entrepreneurs Sheldon Grizzle and Enoch Elwell knew that entrepreneurship was going to be key to any cultural shift in Chattanooga. But the first decision they had to make was how to jumpstart renewed interest in entrepreneurship.
Like in any aspiring mid-size city, there were those who thought that large, existent corporations setting up shop in town and creating thousands of jobs would be the most effective way forward.
But Chattanooga also had a large and growing population of artisans, creatives, and artists. These underserved entrepreneurs didn’t even identify as entrepreneurs, and many were hesitant to turn their passions into careers, given the economic instability of the late aughts.
So the question faced Enoch and Sheldon: should their work focus on the high-potential businesses, the tech startups and Amazons of the world, or the local artisans—the artists, creatives, and small-town ‘weirdos’ looking to start out on their own?
In an unusual move, they looked to small business as the key to future success.
“The big business vs. small business dilemma is just a false choice,” said Charlie Brock, an early advisor to Sheldon and Enoch who co-founded the Chattanooga Renaissance Fund, assumed the role of CEO at CO.LAB in 2012, and then left to direct Launch Tennessee, an effort to reproduce statewide the work being done in Chattanooga. Today he sits on the board of both CO.LAB and CO.STARTERS.
“A lot of money and attention goes into recruiting elephants,” he explained, “and they can be quite valuable. But the impact on the community and the potential for a lasting local economy grows best from the bottom up.”
In fact, said Charlie, small business is often underestimated as a job creation system. “The behemoth companies that come in and create jobs are great, no doubt. But a lot of the larger corporations are also shedding jobs every year. So in terms of net job creation, small business is the biggest contributor.”
The problem, of course, is that most small businesses don’t survive the first five years of operation. But if that problem can be addressed, then small business becomes a much more viable economic development strategy for cities like Chattanooga.
This is the strategy Enoch and Sheldon went with.
In starting CO.LAB, Enoch and Sheldon were continuing the work of Create Here, a temporary local nonprofit that ran entrepreneurial education programs, pitch competitions, and placemaking initiatives.
But they were also aiming to create a “front door” for entrepreneurship in Chattanooga. CO.LAB—like Create Here before it—was looking to revitalize the Chattanooga Main Street.
“We were really looking to democratize entrepreneurship for Chattanoogans,” Enoch said. “The point of focusing on small business is to create an atmosphere where everyone feels like they could start a business and contribute to the community. That’s what Main Street development is all about, anyway.”
While there were a number of other service providers for entrepreneurs already established in the city, there was little cohesion between them. Enoch and Sheldon believed that many of their imagined customers (artists, cooks, musicians, designers) would never step foot in a “business development center” or “chamber of commerce” because those people typically don’t conceive of themselves as entrepreneurs or their passion projects as businesses.
“There was no player in Chattanooga that stood to legitimize those people and make entrepreneurship a clear and accessible path forward for them,” shared Enoch. “That’s why we founded CO.LAB.”
To accomplish their goals, Sheldon and Enoch set up a number of different programs to introduce entrepreneurs to the Chattanooga network. From Wayfinding meetings (entry level consultations) for those at the far end of the concept phase to GIGTANK, an accelerator for high growth tech companies, CO.LAB offered a direct path forward for any entrepreneur.
An instrumental tool in that effort was CO.STARTERS, a program developed to guide early stage entrepreneurs through introductory business concepts and help them discover their next steps forward.
“CO.STARTERS was, without a doubt, the biggest bang for our buck in terms of return on investment. And it’s doing the same thing in cities across the state of Tennessee, too. We couldn't even spell ‘entrepreneurship’ fifteen years ago in Chattanooga. Look at us now.” - Charlie Brock
The programs implemented by CO.LAB—including CO.STARTERS—began to reshape the entrepreneurial landscape in Chattanooga. Once bare, vacated main streets began to boast new restaurants and art galleries.
It only took a couple dominoes to fall—a few new businesses opening their doors—to alert local Chattanoogans that something was changing in the city. The best accelerant for entrepreneurship in a city is the success of other small businesses.
Today, ten years after the founding of CO.LAB, Chattanooga is one of the best cities in the country for starting a new business. Of course, Gig City’s growth has been accelerated by larger corporations setting up shop locally. Chattanooga is now home to multiple tech companies, several large insurance providers, and a growing number of manufacturing plants.
As much as these large developments have contributed to Chattanooga’s success, it was because of the initial focus on small business that these large efforts could succeed.
“I remember when Volkswagen decided to put a factory here in Chattanooga,” recalled Charlie Brock. “They said that for Chattanooga, the intangibles became tangible. The entrepreneurial culture and quality of life were a major draw for VW. They could see our potential for growth in the long run.”
That potential was cultivated, not by a push for an Amazon warehouse or high-growth tech company (though Chattanooga now has both), but by paying attention to the bootstrapping artists, the “makers, tinkerers, dreamers, doers” as Enoch calls them. It’s programs like CO.STARTERS that have ultimately done the most to put Chattanooga on the map.
“CO.STARTERS was, without a doubt, the biggest bang for our buck in terms of return on investment,” said Charlie. “And it’s doing the same thing in cities across the state of Tennessee, too. We couldn't even spell ‘entrepreneurship’ fifteen years ago in Chattanooga. Look at us now.”
Offer a complete job-building program to your city.
Create local jobs. Keep business homegrown. Become the success story.