The beginning of anything is the hardest part. The first day of school. Your first week in a new job. Or the first 12 months of a new business.
According to the Small Business Association, 20% of new businesses fail in their first year. About 50% fail in the first 5 years. And after 10 years, only around 30% of businesses are still going. Of that 30%, about one quarter have what is called a “successful exit.” A successful exit is when your business is doing so well that someone buys it off you — for a price that makes all your hard work worth it.
These percentages make it sound like, if you start a business you have a pretty good chance of a successful exit. Actually, you don’t. When you do the math, your chance of getting from startup to successful exit is 0.075 %. In other words, close to zero. Which makes what happened in New Orleans in 2021 so extraordinary. In the space of a few months, we saw three stupendous successful exits.
First up was Turbosquid.
Turbosquid is an online marketplace for buying and selling 3D images and models that are used in everything from video games to TV commercials. The company was one of the earliest successful tech startups in New Orleans. It was founded in 2000.In 2021, co-founder Matt Wisdom sold Turbosquid to a company called Shutterstock, for $75m.
Next up was Levelset. Levelset is a software-based company in the construction industry. Basically, it acts as a contractual meeting place for contractors and the many subcontractors on a construction site. Levelset’s function is managing all of the financial obligations on a construction project, so that everyone gets paid, and gets paid on time. They secure and facilitate almost $2B in payments every month. Levelset started life with the name zLien. Scott Wolfe Jr, a local New Orleans real estate attorney, started the company in 2011.In 2021, Scott sold Levelset to a company called Procore – for $500m.
To round out our spectacular 2021, there was Lucid. Lucid is a New Orleans company that specializes in conducting, compiling, and analyzing consumer research. The company started out life in 2010, as Federated Sample. In 2015 it changed its name to Lucid. And in 2021 Lucid was sold to a Swedish market research firm, called The Cint Group – for $1.1B The founder and CEO of Lucid is Patrick Comer.
For many years, the New Orleans economy was firmly rooted in the oil and gas industry. When big oil left the city, it seemed like only hospitality and tourism could flourish here. Then, a little after the turn of the 21st century, New Orleanians learned a new term: “Tech startup.” We saw technology companies starting up, and growing, with the help of business incubators like Idea Village and Propeller. At the same time, we were watching Silicon Valley in California. As we witnessed the success of venture-capital-driven tech companies that came out of there, people here in New Orleans started asking, “Where’s our Google or Facebook?”
Well, in business terms, it hasn’t taken long to answer that question. In just 10 years we’ve seen the successful exits of three very impressive local companies that were built here from scratch: Turbosquid, Levelset, and Lucid. And it seems like, rather than having reached what 10 years ago we considered the pinnacle of achievement, we’re realizing that what we’ve actually reached is a new plateau. A new basecamp from which we can continue climbing.
Matt Wisdom, Scott Wolfe Jr., and Patrick Comer’s incredible achievements are not only an inspiration to other entrepreneurs, they’re providing a foundation to help build the next generation of New Orleans businesses.
Out to Lunch is recorded live over lunch at NOLA Pizza in the NOLA Brewing Taproom. Photos by Jill Lafleur. And you can meet a couple of the next generation of entrepreneurs and find out about their tech startup, Bloks, “the Wix of apps” that lets you build your own app.