This is a series of perspectives from local leaders who support startup businesses and social ventures, or who have started one themselves. Each is invited to envision what a world-class startup ecosystem would look like in St. Petersburg and to share their ideas for how we get there.
Jim Barnish Jr. is a managing partner at Orchid Black, a growth services firm that helps tech-forward companies grow quickly and position themselves for acquisition within three years. The company was created to address a gap in the market and fill an important niche in the startup support system. As both an entrepreneur and a service provider, he is well-positioned to assess the current state of the entrepreneurial ecosystem in Tampa Bay.
During his tenure with Venture fund Florida Funders, Barnish observed many promising businesses with unique offerings that did not fit the “unicorn” model that is the principal focus of VC funders. Currently, a unicorn is defined as a privately held company with a value of over $1 billion.
Barnish and his partners work with a select group of companies that, while not unicorns in status, are already in the black and have attained between $3 and $50 million in recurring revenue, solidly operating in the early growth stage. The Orchid Black team works side-by-side with founders, providing coaching and operational support to get the business to the next level. They bet on their clients’ success by opting for equity in the companies rather than fees for service.
Among the greatest challenges these high-potential companies face, according to Barnish, is getting stagnant in their revenue. “An important question we ask is whether a company has a true market- fit with their product, or just got lucky with a few customers,” he said.
“We look for businesses that are capable of growing their market through proven customer acquisition strategies. And we help founders get unstuck from the day-to-day of running the business so they can concentrate on creating transferrable value that will attract the right buyer.”
Asked about his impressions of the quality of entrepreneurship in Tampa Bay in late 2021, Barnish doesn’t hesitate. “It’s been a good year. This time last year we had no clients in Florida. Now we have five, several from Tampa Bay. That tells me that solid companies are starting to emerge here.” He reports that Florida Funders and SeedFunders report seeing better businesses applying for and getting funding.
“History has shown that some of the most resilient startups emerge from times of crisis,” he went on. “Covid-19 caused a few months of interruption, but overall, the pandemic did not diminish investment.”
Another important development has been the democratization of startups and tech talent and an inbound migration of tech companies and capital to Tampa Bay. He cites Cathie Wood moving ARK Invest to St. Petersburg as testament to the attractiveness of regional market. “Silicon Valley’s grip has been loosened,” Barnish added.
Is there room for improvement in the entrepreneurial ecosystem? Absolutely, he responded.
“We’re great at celebrating our successes, but not so good at thinking 10 steps ahead,” Barnish said. “The cities that are getting it right – Austin, Cincinnati, Columbus, Philadelphia, Atlanta – all have five and 10-year plans.” Some learned this the hard way, initially growing too fast and haphazardly without a strategic plan. “The great companies stopped showing up, so they course-corrected. These are lessons we can learn from and apply here.”
Barnish points to a disappointing lack of sharing of resources and knowledge between Tampa and St. Petersburg as another limiting factor. Players in the ecosystem are making an effort, but governmental collaboration isn’t where it needs to be. This lack of alignment makes crafting a comprehensive plan difficult. In his view, the ideal scenario would be for an impartial organization without a vested interest to take leadership of the process and facilitate a master plan. And the region could use a little more hustle.
On the plus side of the ledger, organizations like Synapse, Tampa Bay Wave and Embarc show the power of private funding to catalyze momentum and results without waiting for ideal circumstances.
We wrapped up the conversation by asking: what’s the significance of the company name, Orchid Black?
“It goes back to the unicorn idea,” Barnish said. “If a unicorn is a mythical creature – or something of great rarity in the startup marketplace – an orchid is known as a somewhat fragile plant. However, orchids can thrive for decades if carefully tended. The Florida orchid flora possesses the largest number of orchids in North America. But the name also applies to our work with high-potential startups that are solidly in the black.”
Headquartered in St. Petersburg, with offices in New York, Chicago and San Fracisco, Orchid Black claims that it has created nearly $25 billion in value for its client companies.