A Key to Entrepreneurial Success: Finding Your Third Place

How important could a barbershop be?

John Merrick rose from slavery to found the North Carolina Mutual Life Insurance Company, one of the largest black-owned businesses in the United States. In the process, he helped to create a culture in early twentieth-century Durham so entrepreneurial that it became known as the “Black Wall Street.”

Eight hundred miles away, New Orleans’ cornetist Charles “Buddy” Bolden was innovating something so new that his contemporaries didn’t have the words to describe it. Not until 1912 would the music that Bolden played be given a name: jazz.

Two black entrepreneurs, despite living in segregated America, found ways to exercise their creativity and disrupt their worlds. What did they share?

The barbershop.

John Merrick began his career as a barber, serving customers regardless of race or status. Barbershops were one of the few places in Durham where black and white locals could connect as friends in a relaxed, intimate way. It was in his barbershop that Merrick met Washington Duke, philanthropist and organizer of the American Tobacco Company, destined to become an important benefactor.

Likewise, historians believe that Buddy Bolden first tried the cornet at the New Orleans barbershop of  Charley Galloway, who played the guitar and had a steady stream of Irish, German, and black musicians frequenting his shop. It was a place where Bolden could find free instruction, job offers, impromptu jam sessions, and acceptance.

The “Third Place” Defined

For Merrick and Bolden, the barbershop was a “third place,” defined by sociologist Ray Oldenburg as a location where people can, after home (first) and work (second), come together for casual companionship. These informal meeting places are neutral ground, Oldenburg adds, “in which all feel at home and comfortable.”

Prodigiously talented but disadvantaged by Jim Crow society, both Merrick and Bolden were proof that third places create the possibility of new relationships that are otherwise intolerable in traditional settings.

When Alfred Sloan, the future CEO of General Motors, began selling ball bearings to the automobile industry, there were more than 200 start-ups converging in Detroit, a city bursting with ambitious, determined entrepreneurs.

Often these men met at one of Detroit’s most important third places, the Pontchartrain Hotel. Here, Sloan recalled, motorcar gossip was exchanged and, “when the crowd thinned out of the dining room, the tablecloths would be covered with sketches: crankshafts, chassis, details of motors, wheels, and all sorts of mechanisms. Partnerships were made and ended there. New projects were launched.”

The dining room of the Pontchartrain Hotel was the barbershop of Durham and New Orleans, a third place that helped to foster community and shared innovation in Detroit’s hypercompetitive automobile ecosystem.

In Thomas Wolfe’s iconic 1983 article about the birth of Intel, Wolfe described a new breed in Silicon Valley that often stopped at a third place on their way home. “Every year there was some place,” Wolfe wrote, where “the young men and women of the semiconductor industry, would head after work to have a drink and gossip and brag and trade war stories about phase jitters, phantom circuits, bubble memories, pulse trains, bounceless contacts, burst modes, leapfrog tests, [and] RAMs. . . .”

These informal conversations were pervasive in Silicon Valley, writes Annalee Saxenian in Regional Advantage, and were often more valuable than trade press and industry conferences. Saxenian argues that West Coast third-place gatherings served the needs of rapid innovation better than the secretive, closed corporations that dominated the East Coast tech industry.

Healthy third places are marked by an ability to unite a community, flatten rank, assimilate newcomers, spread information, and enhance a person’s sense of belonging. They can become socially powerful in their own right—a reason that British authorities frowned upon coffeehouses in colonial America. In the context of entrepreneurship, third places become a launchpad for other kinds of community, including team-creation, partnerships, and new start-ups.

Where is Your Third Place?

If you are an entrepreneur, do you have a third place, a community in which you can trade information and puzzle through problems with industry peers?  If you are the leader of a start-up, is there a place you can go where rank is irrelevant, friendships form, and informal information exchanged?

In the past, institutions such as church and bowling leagues provided third places. Today, McDonald’s and Starbucks can serve as a kind of third place. Some people find community on social media sites.

Brent Grinna struggled to launch EverTrue. “I can’t get a cofounder because I don’t have any money,” he said, “but I can’t get any money because I don’t have a cofounder.” Grinna attended an iOS meet-up at a pub in Cambridge, a kind of “pop-up third place” common in entrepreneurial communities. He gave his elevator pitch and before long  found his partner.

In my town, a formidable group of cyclists gathers in our local café on Sunday morning after their ride to breakfast together. This is a kind of “flash third place” based on a shared hobby that can assemble anywhere yet still provide the benefits of companionship and networking.

Oldenburg tells us that traditional community is disappearing and that new third places are emerging—though they are apt to look different than their predecessors. For an entrepreneur, the search for such places is worth the effort. History proves that competitive advantage can arise by finding the right barbershop--a robust third place in which you and your team can learn, grow in talent and diversity, and continually enhance community.


Authored by:

third placeEric B. Schultz is the author of Innovation of Tap: Stories of Entrepreneurship from the Cotton Gin to Broadway’s Hamilton, where 25 entrepreneurs (including Merrick, Bolden, Sloan, and Grinna) meet in bar—a classic third place.  Schultz has spent his career in entrepreneurial and leadership roles, including as senior vice president of Midwest operations for American Cablesystems, cofounder and president of Atlantic Ventures, and chairman and CEO of Sensitech, a venture-backed business twice named to the Inc. 500 before being acquired by Carrier Corporation. He served as a CEO-partner with Ascent Ventures, as executive chairman of HubCast, on the board of advisors of the Avedis Zildjian Company and Windover LLC, and as a mentor for student start-up teams in the Brown University B-Lab. His nonprofit historical work includes chairing the Gettysburg Foundation and the New England Historic Genealogical Society. He is co-author of Food Foolish: The Hidden Connection Between Food Waste, Hunger, and Climate Change, and King Philip’s War: The History and Legacy of America’s Forgotten Conflict, and author of Weathermakers to the World. Eric has a bachelor’s degree in history from Brown University and an MBA from Harvard Business School.  Eric’s blog is “The Occasional CEO” at theoccasionalceo.blogspot.com where he posts updates to Innovation on Tap. He can also be found on Twitter at @ericebs, on LinkedIn, and on Amazon.

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