An interview with Adam Klein, chief strategist at the American Underground
Think about tech hubs in the Southeast, and one that comes immediately to mind is the American Underground. With some 120,000 sq. ft. of space across three buildings in Durham and one in Raleigh, the Underground over six years has become home to more than 240 startups and a national model for how to transform a once-depressed downtown into a magnet for high-growth companies.
Adam Klein is chief strategist for the American Underground. Under his leadership, Google for Entrepreneurs designated the Underground one of just eight of its Tech Hubs in North America. Klein’s latest move is Gridworks Durham, a new Underground concept designed to meet the needs of professionals underserved by existing incubators.
Klein previously directed strategic initiatives for the Greater Durham Chamber of Commerce such as the Bull City Startup Stampede and The Smoffice, which brought nearly 40 startups to downtown Durham, earned national media attention, and won “The Most Unconventional Economic Development Project in the World” award from the World Chambers Congress, held that year in Doha, Qatar. He holds a masters in regional planning, specializing in economic development, from the University of North Carolina at Chapel Hill. He and his family live in downtown Durham.
Gridworks is scheduled to open in mid-March, 2017, in the historic Kress Building on W. Main St. One of hundreds of “five-and-dime” retail stores that the S. H. Kress & Co. built nationally, Durham’s Kress Building is distinctive for its Art Deco detailing (23 Kress Buildings are on the National Register of Historic Places), and more: It was the location of lunch-counter sit-ins that began just days after the famous Greensboro sit-in at Woolworth’s, Feb 1, 1960 — creating a remarkable resonance with the American Underground’s commitment to cultivating a diverse business community.
Klein shares with us his vision for what Gridworks Durham means to Durham’s resurgent business community and to the startup landscape in the Southeast.
Rendering of Gridworks Durham
tekMountain: How would you encapsulate the mission of Gridworks Durham?
Adam Klein: We want to provide a collaborative, innovative environment for professionals, freelancers and service providers in heart of downtown Durham. We’re trying to solve the problems that many of those groups have. There are spaces [elsewhere] that provide an office or a coworking desk that tend to be in a more suburban office park environment with little to no personality. So what we’re doing is bringing them all of the energy and excitement of downtown Durham and the great business community that’s here to create a real-estate solution for these professionals.
tekMtn: What need is Gridworks fulfilling that wasn’t being fulfilled before?
AK: These professionals want to be in downtown Durham. They want to be in an office environment where they’re surrounded by inspiring peers, and at a price point and lease-term flexibility that works for their businesses. Right now downtowns typically don’t have space for these professionals unless they can rent 2,000 to 3,000 sq. ft. of space. We’re trying to boil that down to a coworking desk or 200 sq. ft. office for professionals to have access to.
tekMtn: So this is an alternative to some of the high-end, high-growth businesses that incubators might typically look for.
AK: Correct. What we’ve done with the American Underground is build space for high-growth high-technology startups. This Gridworks brand and space are going to be distinctly different. We aren’t serving the same audience. Our experience with the Underground has shown us that there’s an audience who likes that energy and that environment but isn’t going to benefit from the resources that we’re providing to early-stage startups. They’re an attorney, or they’re an accountant, or a graphic designer, who have the clientele, have the client base, want to have a nice conference room for a client meeting, or to have peer over for a drink after work or something like that.
tekMtn: It’s exciting that you’re placing Gridworks in the Kress Building.
AK: Yeah, it’s a great historic structure. Gridworks will be on the mezzanine floor, so it’s got this great big bay window at the front of the space that overlooks Main St. and lot of natural light, as well as windows in the private offices. It has a lot of character, and we’re really excited about being in that kind of structure. It’s really in a prime spot in downtown Durham.
tekMtn: The Underground has committed itself to being the most diverse tech incubator in the nation. Meanwhile the Kress Building was the site of lunch counter sit-ins back in 1960. Was the building’s history known to you when you struck the lease?
AK: Not initially. And then when we went through the branding process, we did more research on the Kress Building, the history of sit-ins, and really the Kress brand across North Carolina and its connection to civil rights and race. And so I hope this is a redemptive turn here in that we’re able to bring the building to life with great people in Durham from diverse backgrounds with diverse businesses.
tekMtn: In the American Underground’s video case study, we learn that the Underground’s focus is on “holistic returns.” How would you quantify a “holistic” ROI?
AK: If you boil it down, it simply means that when a community is successful, businesses including our own will be successful. And so we look at that across the board in thinking about the success of schools, the vibrancy of our arts-and-culture community here, the general culture downtown; thinking about the pipeline of talent who have access to jobs being created in downtown Durham; thinking about connections to our universities, so that hometown talent, both from our public schools and our private schools, is staying in our community. So it’s fairly comprehensive. What we do with the Underground is to measure things like how many of our members are mentoring entrepreneurs, how many are sitting on boards, how many are involved in the community in some way. All of our coffee and consumables are being composted, so we’re thinking about the environmental aspect of what it means to run a space like ours. And we’ll bring that same lens to Gridworks, and that’s why I’m optimistic about the space. We’ve been at this for six years with the American Underground, we’ve had the opportunity to hone and tighten our own model and our own approach, our thinking about holistic shared space, and what it means for community. Like I said, these service professionals, especially the early-stage ones that might just be getting their start, really haven’t had a place to call home in downtown Durham. We’re excited to bring that to life.
It’s difficult to map the growth in minority-owned businesses and women-owned businesses against any other statistics about Durham County. So we still have great distance to cover. Really the work of supporting diverse entrepreneurs, and creating an inclusive entrepreneurial community is never done. I think this is a core part of our DNA and is something we’re going to work on as long as the American Underground is in existence.
tekMtn: What does the name itself, “Gridworks Durham,” imply?
AK: Our team went through a series of branding exercises to develop a name. What we started to center on was this idea that Durham is already a coworking space and we mean that in the most significant sense possible in that, when somebody comes into Durham, it’s a very horizontal community. It’s not as though you need to know certain city fathers to be welcome to the business community. It’s not as though it matters who your parents were, it’s about you and about what you bring and can contribute to the community. So we wanted Gridworks to kind of embody this notion, this brand, of connecting to a grid, connecting to something where you plug in, you receive energy, power, momentum, and also contribute back into the power of the grid.
tekMtn: Backing out further: Why Durham? Why not Raleigh or Charlotte? What other practical considerations were there that made you settle on Durham?
AK: Launching this in Durham made sense because we know the community very well. We know that people already expressed interest in being in our American Underground locations in Durham. So we knew that those individuals who might not be a fit for the Underground could be a great fit for Gridworks and that their interest was really in Durham. So that made a ton of sense to us.
I also think there are operational efficiencies, so our team is going to provide some support on the backend to Gridworks in terms of construction build-out, space design and leasing, and once the space is up and going, there’ll be a dedicated community manager to it. Being just a block down the street, that proximity is going to be important.
And then the last thing I would say in terms of the “Why Durham?” thing is, density has been the underlying thought process at American Underground for some time. The more creative and dynamic people we can bring together, with more diverse backgrounds and diverse viewpoints, the better. We think that’s important for business success. I think Gridworks Durham will play a contributing role in that. Not all those companies will be high scale at Gridworks Durham, but many of these professionals will bring vast networks; they’ll bring exciting new ideas to the table and hopefully some downtown spending, and the chance to support more restaurants and bars and the vendor community here, support the artists community. I think that’s exciting as well.
tekMtn: That goes right back to the holistic point you made earlier.
AK: The last I’d say is that Durham — the business community — at some level is a community of small businesses. I think this gives more people a chance to be a part of that community. By having a price point of $300 to be a part of this as a full-time, 24-7 member, we feel like that gets more people involved rather than less, and that’s really important. That’s just a fundamental real-estate factor — shrinking the size for people who need a desk or an office. So I’m excited for that. That’s going to be a contribution to the community that, we hope, means more people will be involved in this community going forward. If this works long term, I can see us expanding this model into other communities.
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