INVESTIGATION: RI's Hottest Company Leaves, RI Officials Never Met with Them

Kate Nagle, GoLocalProv News Editor

INVESTIGATION: RI's Hottest Company Leaves, RI Officials Never Met with Them

A GoLocalProv public document request to the Governor’s office, Commerce Corporation, Providence Mayor’s office and Providence economic development officials found that none of them had a single meeting with the Teespring in 2015. The company tagged as one of the hottest in America has announced it is moving to Kentucky and California.

In 2014 and 2015, Teespring raised $55 million in venture capital funds from many of the top funds in the country. The Brown start-up has been compared to an Uber and AirBNB type of company and is expected to do over $200 million in sales in 2015. All of this business momentum is great news for the Brown University - spinoff, but the bad news it will be growing and hiring in San Francisco and Kentucky and not Rhode Island.

"I am not surprised. Many of our economic development officials are not businesspeople. They have their "model" of what they think Rhode Island needs. These officials are looking for "home runs"  -  find a new business that will create jobs even if the business may not be good for the state," said URI Distinguished Professor of Business Edward Mazze. "They do little for existing businesses and specifically for businesses that could use professional help in management and financing. They introduce programs that can't be implemented  because they do not understand the basics of operating a business in Rhode Island."

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The company that started and grew in Providence is now leaving.

In response to one of GoLocal’s request for information, the Commerce Corporation responded, “Specifically, you requested that Commerce RI provide you with "the dates of meetings, who attended, and any written record of meetings between the Commerce [RI] and/or Economic Development officials with the company Teespring in the past 6 months" and "records of any communications relating to retaining the company, including but not limited to proposals, offers, incentives, job training plans, etc." for the period of January 1, 2015 to June 25, 2015.

"Please be advised that after a review of its records, Commerce RI has determined that it does not have any records responsive to your request.”

Similar responses were returned from Governor Gina Raimondo’s office and the office of Providence Mayor Jorge Elorza.  

Worse yet, one high level economic development official admitted he had never heard of Teespring. 

Only after GoLocal's outreach in late June, did Commerce seek public records did the state's economic development agency reach out to one of America's hottest companies.  

“The Commerce Corporation responded regarding the dates identified within the public record request. Subsequent to Teespring’s announcement, the Commerce Corporation reached out to the company’s executives and we are continuing to pursue a dialogue regarding opportunities for the company in Rhode Island,” wrote Melissa Czerwein, Senior Communication Manager in an email to GoLocal.

RI Officials MIA While National Business Press Celebrate the Company

Forbes Magazine tagged Teespring as a potential billion dollar start-up as far back as 2013 as a company that had the capability of growing to a billion in sales and billions in valuation. 
Forbes wrote in 2014 that the company, started by Walker Williams and Evan Stites-Clayton because they wanted to sell T-shirts to support a local bar that was in danger of closing, was growing.

"Teespring plans to use the money from Khosla Ventures to add more tools to make the design and selling process easy for its customers," wrote Forbes' Alex Conrad last November. "The company employees 170 employees across offices in Providence, RI and San Francisco already, and is building a 300-employee manufacturing plant in Kentucky with the money from its last fund raise. Williams and Stites-Clayton have now raised $55 million overall."

The fact that city and state officials did not work to retain and grow Teespring seems unfathomable. RI has given given tax incentives and credits to hundreds of business in the past few years. The Showtime TV show Brotherhood Productions received more than $15 million in tax incentives over three years and did not produce any permanent jobs.

Presently, Rhode Island is negotiating in private with the new ownership group of the Pawtucket Red Sox for tens of millions in tax breaks and incentives. Previously, the PawSox ownership demanded $120 million in subsidies and the company employs less than 30 full-time workers.  In contrast, Teespring has already agreed to locate 300 employees in Kentucky.  The company is eliminating 70 positions in Rhode Island and has built is corporate functions to San Francisco. Teespring is presently advertising for new positions in both Kentucky and California. 

“Teespring has been transitioning out of RI. It's a loss. Teespring has been transitioning out of RI for a while after participating in Y-Combinator, hiring a Chief Marketing Officer in San Francisco and establishing manufacturing in Kentucky. RI has to make entrepreneurship much more central to its economic development efforts to compete,” said Saul Kaplan, the founder of the Rhode Island Business Innovation Factory (BIF). Each year BIF hosts one of the country’s leading innovation events


Some of Teesprings job vacancies in KY and CA
How Big Could Teespring be?

With hundreds of millions in sales and almost a limitless ability to raise capital, Teespring could be the next company with 10,000, 20,000 or 30,000 employees.  
One top level former eBay executive thinks Teespring has that capacity.  In May, Robert Chatwani joined Teespring as Chief Revenue Officer and Marketing chief. He had formerly served as Chief Marketing Officer for Ebay in North America for 12 years.

“I joined EBay when we were less than 5,000 people and now we’re 35,000 people,” Chatwani told Bloomberg. Today, Teespring has over 300 employees and is aggressively hiring in both Kentucky and San Francisco for high paying tech positions.

"Teespring made a decision that was good for the company's future and added value for its owners. Teespring found Kentucky had the resources that would take them to the next level of growth," said Mazze. "City and state economic development officials with little or no real experience in business often find it difficult to believe that a business will leave a state after being celebrated in the press and offered financial incentives to stay. This situation happens often when a business outgrows the state in which it is headquartered. 
 


Brown Grads Leading in US Business

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