3 Birds struggles to fly

When it first hatched in 2010, 3 Birds could have nested anywhere in the country. The three founders – Layton and Kristen Judd and Leonard Wohadlo – chose Chapel Hill, in part because of the proximity to the young talent pool provided by UNC. Initially, 3 Birds hired as many as a dozen interns a year, dangling the prize that they could move into full-time jobs as the company grew and prospered.

3 Birds develops its own software and intellectual property to build e-mail and text-messaging platforms and other interactive, digital marketing products. Rather than just ship the technology off to customers, 3 Birds can bring in account managers and marketing people to create strategy and run it, becoming a company’s off-site marketing department. Its customers are concentrated mainly in the automotive industry.

Starting strong, 3 Birds soon outgrew its office space at 321 W. Rosemary St. Last year, when the company threatened to move to Durham because it could not find an affordable, large enough space downtown, Scott Maitland and the Town of Chapel Hill swooped in for the save. Maitland had extra office space in the building at 505 W. Franklin St. that he’d purchased for his Top of the Hill distillery, and the town wanted the West Rosemary Street space to house a startup incubator, Launch.

Maitland, who, among other things, teaches entrepreneurship at UNC Kenan-Flagler Business School, offered 3 Birds reasonable rent, and the town threw in a parking lot across South Graham Street at a discount. The town also took over the three and a half years on the West Rosemary Street lease (a total of $105,000), in exchange for 3 Birds providing $10K of in-kind marketing services annually to Launch and an additional $10K in cash per year through 2015.

3 Birds promised to bring its staff working in the Chapel Hill office to 52 by the end of 2013 and 80 by the end of 2014.

But 3 Birds evidently has struggled recently. Earlier this year it lopped off its top-salaried employees and replaced them with lower-paid workers. Its website says it has 32 employees at present, but 3 Birds isn’t giving an update. If 3 Birds doesn’t meet its employment target, its only penalty is to pay for parking at a discounted rate of $42.50 a month for each employee it is short. The parking lot was a sweet deal. 3 Birds has full use of the parking lot for 12 hours a day, and the company can coordinate parking two and three cars deep. Given that the cheapest parking space the town leases costs about $95 a month, it is a much better deal for 3 Birds to remain lean and pay for the discounted parking.

Chapel Hill wants startups. Even though the startup failure rate is high, when a startup does succeed, it grows rapidly. But if the town made its deal in hopes that 3 Birds’ employees would keep west end restaurants afloat at lunch and dinner, we may be in for a disappointment.
– Nancy Oates