Madrona puts Create33 on pause as pandemic upends startup community and co-working space

Create33 in Seattle. (Mekhato Photo)

Create33, the Seattle-based “founder center” established by Madrona Venture Group, is no longer operating a co-working space and is revamping its membership program due to changes caused by the pandemic.

Create33 launched in July 2018 one floor beneath the downtown office of Madrona, a long-time Pacific Northwest venture capital firm that provided financial support for the organization. It aimed to be a community nexus of the Seattle startup ecosystem where budding entrepreneurs could learn from mentors, network with peers, attend events, and rent office space.

But when the pandemic hit in March, events were put on hold and the co-working space closed due to health concerns.

Rebecca Lovell.

“With the onset of COVID-19 we moved swiftly to prioritize safety and close the space, and ultimately it became an insurmountable hurdle to cover the lease costs without sufficient rental revenue,” said Rebecca Lovell, a longtime Seattle tech leader and former Create33 executive director.

Lovell left Create33 in December. Jaren Schwartz, a director at Create33, also departed last month.

Madrona plans to run a virtual version of the membership program, which is now free to join and includes new access to Madrona’s investment team and resources, such as quarterly office hours and invites to Madrona-produced programs with CEOs and other leaders.

The firm will also make the co-working space available this year to its portfolio companies and others looking for flexible office space.

Madrona, which inked a 10-year lease for the 22,000 square-foot space in 2018, is in a wait-and-see mode as the pandemic puts in-person events on pause and the future of co-working up in the air.

“The physical component of Create33 is in a holding pattern,” said Scott Jacobson, managing director at Madrona.

From July 2018: Madrona Venture Group Managing Director Scott Jacobson (left) and former Create33 Executive Director Micah Baldwin. (Mekhato Photo / Taylor Soper)

Aviel Ginzburg, general partner at Seattle VC firm Founders’ Co-op, lauded Madrona for trying to keep the membership program alive.

“The founders who were part of that community loved it,” Ginzburg said. “They had a real community that existed.”

Lovell said Create33 was “well-positioned” for 2020 with a full waitlist for the co-working space and a growing member base.

“We had an incredible community where the entrepreneurs who gathered there could increase the surface area of their luck,” she said. ‘Sharing physical space was an important part of that equation.”

Other co-working spaces in Seattle took a pandemic hit as well. Madrona-backed women-focused startup The Riveter shut down all nine of its spaces.

But some co-working and flexible space operators are bullish that if they can weather the pandemic, they are poised for long-term success with changing work patterns.

“The magic of in-person collaboration will return, perhaps with greater opportunity for cross-pollination between early-stage startups and larger companies who forgo their own office space and choose flexible work environments,” said Lovell, who is exploring new opportunities while continuing to chair the Center for American Entrepreneurship and teach entrepreneurship at the University of Washington.

Lovell previously led Create33 with startup vet Micah Baldwin, who stepped down in January 2020.

There are a number of other innovation and entrepreneurial centers such as Create33. Elizabeth Scallon, who previously led CoMotion at the UW and WeWork Labs in Seattle, said the business models differ — some take equity, or others keep the engines running by charging rent and inking sponsorship deals, like Create33.

Scallon said that the larger society benefits from having more of these centers open.

“They give the innovators, the entrepreneurs, the outsiders, the misfits and ones who dare to dream big a safe place to embark on their innovation and entrepreneurial journey,” she said. “We need more of these in our community — not less — as we have urgent global problems demanding our best minds come together to solve.”

A staircase connects Madrona’s office down to Create33. But when Create33 launched, Jacobson was keen to create a degree of separation between the firm and the “founder center.”

“I really don’t think of it as part of Madrona,” Jacobson said in July 2018.

Now, though, with expanded membership benefits that provide more channels between Create33 members and Madrona itself, the two are coming closer together.

Madrona has invested in at least one company it met through Create33, and more could be on the way.

Still, Jacobson said Create33 was “never intended to be for the benefit of Madrona.”

“It was really intended to be for the benefit of the community,” he said. “That’s still the intent.”

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