Demand Better: Creating a place where entrepreneurs can thrive

During the month of August, "Soapbox" ran a four-part series of stories focused on topics for which local leaders and citizens truly do have the power to make a difference. As election day approaches, we'll be re-running those stories in an effort to spark conversations and provoke thought about how we can demand better from our city's leaders and affect real change. This week, we take a look at the topic of entrepreneurs.

The backstory
Entrepreneurial ecosystems spur important advancements in communities, including job creation, better neighborhoods and greater collaboration among businesses, artists, inventors, educational facilities and investors.

From Hoboken to San Francisco—and even in “fly-over” cities such as Boulder, Cincinnati, Kansas City and Omaha—entrepreneurship and “maker culture” are changing the face of business and the shape of cities in significant ways not seen since the Industrial Revolution.

Cincinnati has long-embraced entrepreneurs—look at William Procter, James Gamble and Carl Lindner and generations of farmers and butchers at Findlay Market. We have a chance to build on that history with start-up incubators like The Brandery, business development opportunities like SpringBoard Cincinnati and Bad Girl Ventures (just for starters) and respected universities all located within Cincinnati city limits.

San Francisco-based writer David Pescovitz is also co-editor and managing partner of Boing Boing and research director at the nonprofit Institute for the Future. A Cincinnati native and graduate of the University of Cincinnati, Pescovitz has written extensively on maker culture and emerging technologies, among other topics. Pescovitz defines a vibrant maker culture as one in which “like-minded, curious people share similar values around creativity, ingenuity and openness.”

“It’s astounding what people can do without any money or without management, if given the freedom to follow their passions and connect with others,” Pescovitz says.

“The old model of tech innovation used to be about solitary inventors hiding in garages or research facilities, but now it’s about opening the doors and engaging with others. We are shifting from research and development labs to research and development communities.”

Where we are now
Cincinnati may be in “fly-over” country, but a growing number of startups see the city as a welcoming and supportive place for innovation and entrepreneurship. They point to Cincinnati’s extensive urban renewal, especially in Over-the-Rhine, as one reason to settle here, but they also cite a low cost of living, generally low unemployment rate and access to major educational institutions and entrepreneurial-friendly big businesses as more reasons to set up shop in the Queen City.

One long-established player in the field of local entrepreneurship is Norwood's Hamilton County Business Center, which has been home to more than 260 business startups since 1989. HCBC is a mixed-use, technology-focused incubation program that caters to entrepreneurs and innovators in Hamilton, Butler, Clermont and Warren counties. 

Patrick Longo has served as HCBC’s director for 17 years and has seen a lot of change in the business environment during that time, but has “loved the last three years in Cincinnati” with its increased entrepreneur initiatives. 

“I never thought that entrepreneurship would be sexy,” Longo says. “But it is, and Greater Cincinnati has grasped on to this.”  
With a success rate of nearly 70 percent, HCBC has graduated 110 businesses from its incubator program to the southwest Ohio marketplace. 

“We work with the companies,” Longo says. “We are not an investor and have no ownership stake. We work for their best interests, period.” 

Many of the companies that graduate from HCBC are later able to move out on their own within Cincinnati city limits and partner with investor groups such as Queen City Angels to further accelerate their growth.

Still, Longo sees more opportunities for collaborations and partnerships between cities, businesses and others in the region. “There’s good work being done, but there’s more to do,” he says. “We’re on our way up.”

Cincinnati’s entrepreneurship culture is diverse, including the usual IT technologies but also product design, invention and marketing in its maker culture. 

One example is Rhinegeist, the most recent of seven craft breweries to open in Cincinnati in the last year, reclaiming a long and proud Queen City tradition of beer brewing. Co-founders Bryant Goulding and Bob Bonder are both transplants to Cincinnati—they met in San Francisco, and they agree that they could have opened a brewery anywhere. The fact that they didn’t says a lot about the Cincinnati market, Bonder says.

Perhaps nothing defines maker culture as much as the work being done by the nine artists that together make up Losantiville Collective, which is located on Main Street in Over-the-Rhine and is a graduate of SpringBoard Cincinnati.

Started by Matt Anthony, Dixon Branded and Chris Heckman, the Collective comprises six companies that pool their funds and resources while working under one roof. Almost all of the artists are academically trained in industrial arts so the products that emerge from the Collective range from furniture to wooden ornaments and signs to urban art. Losantiville Collective has been in business for three years and continues to thrive.

The Collective epitomizes the spirit of SpringBoard, an innovative business development program for craftsfolk, artisans and other creative entrepreneurs whose success stories fill storefronts downtown, Covington and Northside, among other locations. Since its launch in 2011, the program has helped 20 businesses get their starts. Classes fill up faster with each offering, and interest across the river continues to grow. 

Successful startups do two things well: they build a product their users love and they make sure the right people know about that product. The city's best-known destination for startups, The Brandery, is a seed-stage startup accelerator whose four-month program focuses on the importance of consumer marketing and branding, helping startups in Cincinnati achieve those goals. 

With Cincinnati ranked as a "Top 5 Consumer Marketing Region" in the world and with 10 Fortune 500 companies headquartered in the city, The Brandery can draw upon the agencies and market research firms that focus on branding, marketing, advertising and design to assist its clients. Interest from and proximity to public-private seed-stage investor CincyTech adds to the incubator's appeal to creative thinkers from around the world.

By any standard, The Brandery is doing quite well for its clients. Eighteen of its companies—70 percent—are still in business months after leaving the accelerator. A 19th has been acquired by new owners. In total, those companies have created nearly 100 jobs and have attracted over $20 million in funding. Alums like Choremonster and Roadtrippers have set up headquarters in the city's core and serve as creative examples of how attracting and nurturing entrepreneurs can turn into long-term success stories for urban development, job growth and community revitalization.

Some of those connections have been made at Demo Day where, at the end of the accelerator’s four-month program, graduates pitch their businesses to potential investors. Last year’s event, held in Great American Ball Park, attracted about 125 investors from around the country.

In 2012, the creation of Cintrifuse brought together business leaders who are working to expand the city's stake in entrepreneurship. As the organization builds out space in OTR, hopes are high for its impact on the city's startup culture.

The bigger picture
Boulder, Colo., is often held up as the gold standard in creating entrepreneurial ecosystems, largely due to the success of TechStars, an uber-selective startup accelerator launched in 2006. TechStars receives thousands of applications each year but accepts less than 10 percent of them. Still, cash and resources are aplenty in Boulder, enough to nurture the more than 200 startups located there. Many of them find tech resources at the University of Colorado’s Silicon Flatirons Center and the National Institute of Standards and Technology.

Boulder-based investor, entrepreneur and author Brad Feld points to four key principles necessary for any community to become a great place to create companies: 1) “the startup community has to be led by entrepreneurs; 2) they have to take a long-term view; 3) they have to be inclusive of anyone who wants to get involved at any level; and 4) there needs to be activities and events that engage the entire entrepreneurial stack.”

Feld discusses these points at length, as well as other strategies for entrepreneurship, in his book, Startup Communities: Building an Entrepreneurial Ecosystem in Your City.

Creating a thriving entrepreneurial ecosystem doesn’t happen overnight. Feld points out that “the startup community in Boulder has been evolving along these four principles for 30-plus years at this point.”

In one-square mile of trendy, upscale boutiques and condos in Hoboken, NJ, the more than 2,000 innovators and entrepreneurs of N.J. Tech Meetup gather each month to discuss new ideas, collaborations and resources. With New York City just a stone’s throw over the Hudson River, the environment is an encouraging one for marketing, media, design and finance ventures. Mission 50 offers private or shared workspaces and associated business services for startups, while the Steven Institute of Technology is opening an entrepreneurship office for its students and is seeking investors for a tech accelerator.

Nashville has long been known as the center of the music industry, attracting both musicians and record companies, but the city is now gaining reputation for creating new startups. In 2009, Nashville investors put $38 million into only eight companies.

But the following year, Nashville’s Chamber of Commerce created the Entrepreneur Center that connected investors with startups, and offered them both mentoring and financial resources. As a result of that initiative, investors have already put $72 million into 21 companies this year.

Since 2012, Google Fiber has been rolling out its gigabit Internet to 180 neighborhoods in Kansas City, which gives the city an adrenaline boost of instant tech at speeds more than 100 times what consumers are presently accessing.

In keeping with this infusion of innovation, KC Mayor Sly James announced the formation of Launch KC, a public-private collaborative that is designed to match developing tech firms and creative entrepreneurs with like-minded, established businesses in the city. Hallmark Cards and other local businesses are donating space for startups to establish themselves in the city.

Demand better
• Develop strong “open government” initiatives, especially open-source data, to give innovators the kind of information they need for problem solving, which can result in exciting new businesses and as well as growth and improved quality of life.

• Follow Kansas City and other urban centers' leads and capitalize on the startup energy already building in the city by creating a position or making room for an executive-on-loan type of collaborator to serve as an entrepreneur advocate at City Hall. This person would be the one-stop shop for all things a startup needs, encouraging collaborations between existing programs around the region and the country to facilitate more leaders from Cincinnati. The leader could also host regular summits of local entrepreneurs to get at the heart of what they need to work, live and grow inside the city.

• Develop a program to support entrepreneurs by providing health care and other benefits through the power of the city’s administration. Some of the biggest barriers for entrepreneurs hoping to make it on their own stem from their need for security. The City has experimented with extending limited health insurance options for sole proprietors, but it needs to make a concerted effort to make the act of jumping from corporate manager to entrepreneur more appealing to residents with great ideas and a lower capacity for risk-taking.

• Offer tax breaks, abatements and incentives for entrepreneurs, not just big businesses that are threatening to leave town. Better yet, how about an incentive for business owners who startup and also choose to live in the city limits? Consider creative alternatives, from discounts on municipal services to free Metro passes or parking for employees.

• Show leadership by having an official presence at events like The Brandery's Demo Day and SpringBoard's graduations. Political leaders and city employees need to make the most of chances to mingle with investors as well as support local entrepreneurs and thought-leaders who are poised to invest their most precious assets—their ideas and talents—in the city.