An Internet company seems an odd fit for a depressed former factory town. But since Shore.Net moved to Lynn, Mass., company and city have been riding each other's coattails to glory.
An Internet company seems like an odd fit for a depressed factory town. But since Shore.Net moved to Lynn, Mass., company and city have been riding each other's coattails to glory.
Although its windows are boarded up and its vast sign has faded to little more than a memory of paint, the Goldberg Furniture Co. building dominates downtown Lynn, Mass., as it has for 97 years. The tangled streets surrounding the expired emporium offer little competition: just ragged lots and puny structures in even more advanced stages of decay. The lone exception to the general decrepitude stands directly across the street from the former furniture store: a boxy sandstone building whose two identifying plaques would fit snugly into one of the periods on the Goldberg sign. But if the Goldberg building is a billboard for Lynn's wound-down economy, its unassuming neighbor quietly advertises surprising new possibilities for the city.
The sandstone structure is the home of Shore.Net (#2), a seven-year-old Internet service provider that is one of a dozen high-tech businesses on the Inner City 100 list. At first blush, Lynn and its ilk appear unlikely locations for those enterprises, which specialize in everything from doing systems integration to developing medical devices. Recruiting would seem to present the greatest obstacle: programming talent is tough enough to attract to fountain-fronted corporate centers with safety concerns no more serious than a malfunctioning espresso machine. What's more, high-tech companies like to cluster around one another -- and around venture-capital firms -- to ensure a ready pool of ideas and money.
Lynn doesn't have an embarrassment of software developers or a neighborhood that invites the descriptor "Silicon" -- yet. But that didn't stop Shore.Net from racking up more than 5,000% revenue growth in five years, leading to sales of $7.1 million in 1998. For high-tech companies eager to emulate Shore.Net's success, founder Lowell Gray has three pieces of advice: inner-city location, inner-city location, inner-city location.
Gray, whose company is #2 on Inc.'s list for the second year in a row, believes Shore.Net would have wilted if it hadn't sunk its roots in the soil of a faded city. And if Lynn has helped to build Shore.Net, Shore.Net is helping to rebuild Lynn by giving it a shot at an economically vibrant future. "I didn't plan to have a symbiotic relationship with a city," says Gray. "But that's what happened, and it's turned out to be a very good business model."
Like many ultimately fruitful relationships, the one between Shore.Net and Lynn was not immediately embraced by both parties. To Peter DeVeau, executive director of the Economic Development and Industrial Corp. of Lynn (EDIC/Lynn), one incident epitomizes his early impressions of Shore.Net's founder. DeVeau was driving through Lynn's downtown one day five years ago, when he happened to spy a vaguely familiar figure strolling briskly along the sidewalk. "I saw the stringy hair, the glasses, and the backpack, and I thought to myself, 'Look at that geek," recalls the official. Then, with a start, he recognized the man. It was Lowell Gray, who had been in DeVeau's office the week before, better dressed and seeking a loan.
Then, as now, DeVeau's position required him to meet with a steady stream of entrepreneurs -- mostly owners of machine shops, small retail businesses, and the like. But Gray had stood out: for his intellectual intensity, his professional-looking business plan, and a résumé that kicked off with a Harvard degree. "You could tell right away he wasn't some guy running a variety store," says DeVeau.
In DeVeau's office, Gray had spoken with growing excitement about the coming explosion in E-commerce and his company's ability to meet the escalating demand for dial-up and high-speed Internet access. Then he asked for a $25,000 loan to help buy 10 rack-mounted modems. DeVeau, who nodded thoughtfully throughout the speech, told Gray he'd get back to him. After Shore.Net's founder left, DeVeau walked out of his office and confessed to one of his assistants that he hadn't understood a single word the guy had said.
But as he cruised past Gray the following week, DeVeau mentally replayed their encounter and conceded to himself that the entrepreneur appeared to know what he was talking about. The man might be a geek, but he was a geek with vision. And back then, vision was in short supply in Lynn. "There had been a long period of disinvestment in the city," says DeVeau. "We were searching for our niche." The EDIC approved Gray's microloan.
The loan came not a moment too soon, says Gray. At the time of his meeting with DeVeau, Shore.Net was on its last legs.
Dressed in jeans, flannel shirt, and moccasins, Gray looks back on his company's first financial crisis from the comfort of a walnut-veneered office. One floor below, in a tennis-court-sized corrugated-steel cage capable of neutralizing the electromagnetic pulse from a nuclear explosion, a small forest of Internet servers basks in the aggregate breeze of several dozen internal cooling fans.
That basement full of technology is the natural culmination of the entrepreneur's lifelong fascination with computers. Gray, who grew up in New York City, taught himself programming at the age of 13. He went to Harvard, where he received a degree in chemistry in 1982 and developed a suite of statistical-analysis programs for Harvard Medical School. After graduation, he built telecommunications-network software for a consulting company and then jumped to a major accounting firm, where he managed a software group. In 1989 the newly wedded Gray was transferred to Silicon Valley and was introduced to routine 70-hour workweeks. By 1990 he'd had enough. "If I was going to work that hard," he says, "I thought it should be for myself."
