Tennessee can create healthier climate for startups

• Our startup, Preteckt Inc., moved to Memphis from Toronto last year.
• Although we have found guidance here, Tennessee as a whole has relatively sparse support systems for startups.
• LaunchTN has provided Preteckt with opportunities to connect with those who can serve as strategic partners.

Toronto is far removed from Tennessee, and not just in terms of geography.

We discovered that when we moved about 975 miles to Memphis last year to grow our startup, Preteckt Inc., with the goal of creating a technology that would change the transportation industry.

It has required some acculturation, but we’ve adapted to our adopted hometown, where we now build our combined hardware-and-software system, which accesses more than 6,000 distinct sensors on a truck and uploads the data for analysis. That “big data for big rigs” enables logistics managers to optimize their maintenance procedures, keep their trucks on the road and lower their operating costs.

In hindsight, the move was something of a roll of the dice. We were invited down by a technology accelerator called StartCo., whose managing director, Mara Lewis, explained how both the city and the state have been logistical hubs for decades. After all, FedEx’s global “SuperHub” is based in Memphis.

The U.S. is home to more than 1 million long-haul trucks, each of which breaks down on average twice a year, resulting in a loss of $5,000 each time. That presents an immensely larger market for our product than in Canada.

Another factor in our voluntary decision to relocate to the Volunteer State was that, in recent years, Tennessee has given rise to a number of other transportation-related innovations. Take, for example, Splitsecnd, another startup, based in Nashville, that offers a portable crash-detection, emergency-service and trip-monitoring device. When a motorist is involved in a crash, the Splitsecnd device calls emergency responders and directs them to the motorist's location.

Our only hesitance stemmed from the fact that the Canadian, Ontario and Toronto governments all have been promoting innovation for years, both in rhetoric and in action. Policies there not only help innovative startups raise funds and pay competitive salaries for talent, but also provide guidance and assistance to growing businesses. This has helped nurture a growing startup ecosystem.

By contrast, Memphis and Tennessee both have relatively sparse support systems for startups. But as luck would have it, StartCo. built a network of people who were pushing against the economic status quo of the city to promote innovation. And through StartCo., we found the right guidance and mentorship to access and leverage everything that was offered.

Tennessee is fertile ground for new ideas. If the state wants to incentivize more startups like Preteckt to relocate here, there’s much it can do to create and promote an optimal climate for innovation and economic growth.

The Consumer Technology Association’s annual Innovation Scorecard, which grades each of the 50 states across 10 metrics related to creating quality jobs, fostering business startups and encouraging economic innovation, gave Tennessee just a third-tier ranking as an “Innovation Adopter."

The 2016 scorecard gave Tennessee an overall grade of B+ on the strength of high marks for being a right-to-work state, where union membership is optional; being tax-friendly and being welcoming toward new business models (such as Preteckt’s); and having fast Internet connections. But those positive attributes were offset by low marks for entrepreneurial activity and attracting investment. The state also drew only middling marks with respect to its tech workforce and the granting of STEM (science, technology, engineering and math) degrees.

The thing I’ve found that Tennessee does best with respect to innovation is Launch Tennessee (LaunchTN), a public-private partnership focused on facilitating the development of high-growth companies in the state. Its stated aim is “to make Tennessee the No. 1 place in the Southeast to start and grow a business.”

LaunchTN has provided Preteckt with opportunities to connect with those who can serve as strategic partners. That has led to some very helpful connections for Preteckt in terms of investor interest, potential partners and general advice.

We’ve had significant growing pains trying to find talent that is startup-compatible and funding that is startup-friendly. In both cases, we ended up going out of state to bridge those gaps, and I don’t think we were alone in having to do so.

Let’s create a healthier climate for startups like Preteckt right here in Tennessee. And in doing so, it could even improve Tennessee’s ranking on the CTA’s Innovation Scorecard in 2017.

Sasha Kucharczyk is the co-founder and COO of Memphis-based Preteckt Inc.