JumpStart: IdeaExchange Blog

Ohioans did something bold on May 4th. By passing the $700 million extension of the Ohio Third Frontier via Issue One, they assured that the progress Ohio’s high-tech economy has made will not only accelerate, but perhaps more importantly, is going to out-accelerate not only all of our neighboring states in the Midwest, but perhaps every state in the U.S.

As we all know, most states are going to be facing tremendous budgetary challenges starting next year. Ohio is not an exception to this fact as almost all observers believe that Ohio legislators are going to be facing a budgetary deficit of $6-8 billion over the next two years. As a result of this reality, many existing state programs are going to be facing tremendous cuts. This is why renewing Ohio Third Frontier today – well before the gubernatorial election in November as well as before the budgetary challenges we will be facing next winter and spring – was so critically important. The passage of Issue One will provide resources to competitively reviewed projects that have the potential to attract or keep Ohio’s brightest individuals, and to accelerate the growth of companies that have the promise to (or already) employ hundreds or thousands of Ohioans and/or have the opportunity to attract tremendous amounts of private sector capital. Over the last eight years, Third Frontier projects created 58,000 jobs. I would anticipate that the continuation of Ohio Third Frontier will create at least another 50,000-70,000 jobs in the next five years.

If Issue One had not passed, Ohio would have likely quickly fallen back into the pack of neighboring states trying to find resources to accelerate innovation and entrepreneurship initiatives – and given the budget situation – almost all of the state’s budgetary cupboards would be nearly bare.

Over the last three recessions, Ohio did not perform well coming out of the downturns. With the help of the recent successful Issue One campaign, Ohio can break this trend in the next couple of years.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.

brain gain (noun) [brayn gayn] - a situation in which many trained and talented individuals seek to migrate to a particular area (in this case, Northeast Ohio). Antonym: brain drain.

JumpStart is in the business of helping companies grow and create jobs, and in turn create a sustainable economy for the future of Northeast Ohio. These companies need leadership - and they also need talented people to fill the other jobs which are created as they grow. Talented people are needed to start and grow the next new businesses to take the place of the current ones, and the cycle continues. These facts bring JumpStart’s focus to the root of talent in our region - the students getting their education at one of the many fine educational institutions Northeast Ohio has to offer.

We’re intrigued by this idea of brain gain. Instead of educating our future workforce only to have them seek other areas of the U.S. to begin and continue their careers - why not show them all of the reasons they should stay right here in Northeast Ohio and soak up all that it has to offer.

Here are my Top 10 reasons that every student in Northeast Ohio should stay here and contribute to the brain gain:

10. Entrepreneurship Education Programs - There are a vast number of programs (degreed and non) ready and waiting to help you start your first (or your next) venture, take your current business to the next level, and continue to grow.

9. Internship Opportunities - Several organizations in town are set up to match you with the best internship opportunities around. What better way to get real world experience and hone your entrepreneurial business skills.

8. Networking Groups & Clubs - This is the best way to get connected to hundreds of other entrepreneurs and others that can help you get in touch with all the right people.

7. Entrepreneurial Events - A great way to learn about different organizations, programs, etc that offer help to students and entrepreneurs alike. And - it’s a great place to build your network (see #8).

6. Low Startup Costs - The cost of living here in Ohio is lower than many other areas of the U.S. Simply put, your money will go farther in all aspects.

5. You can be a Leader and an Individual - Who doesn’t want the best opportunity to do this? Northeast Ohio lets you do both.

4. Free Business Assistance - A number of organizations in the area offer their help for FREE - need I say more?

3. Incubator Space and Resources - Once you’ve got your business started, incubators are here to provide low cost office space and all the other amenities any startup business will need. And, this also puts you in close proximity to other entrepreneurs in the same boat as you, allowing you to share experiences and learnings.

2. Funding Sources at all Stages - From grants and loans, to venture and angel capital - Northeast Ohio’s got it all. All of the connections you’ve made in #s 10-3 above can help you get prepared and connected.

1. Proven Success - Students from Northeast Ohio’s colleges and universities are proving that it can be done. Skritter, CitizenGroove, and Fresh Fork are just a few examples.

I’ve put together a resource guide full of additional details on each of the Top 10 - Check it out, pass it on, and stay in NEO.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.

Issue 1 is a statewide ballot measure that would authorize renewal and continuation of the highly successful Ohio Third Frontier (OTF) program. OTF is a visionary public-private partnership created in 2002 with bipartisan legislative leadership and support as well as widespread editorial support.

The purpose of OTF is to firmly establish Ohio as an innovation leader and to fuel long-term economic growth and create jobs in our state. OTF targets state investments to promising industries, technologies, and entrepreneurs. The initiative is directed by a bipartisan, appointed advisory board and commission. Funds are awarded through a competitive process in which independent experts review proposals and assure a base level of excellence for all projects.

With a 10 year initial life and an initial commitment of $1.6 billion, OTF has emerged as the centerpiece of Ohio’s technology-based economic development and job creation efforts. The bond funding mechanism for OTF, approved by Ohio voters in 2005, expires in 2012. On February 3, 2010, the Ohio General Assembly authorized a bond measure on the May 2010 ballot at a level of $700 million over four years. Support for placing the bond issue on the ballot was strong and bipartisan (30-2 in the Senate, 83-14 in the House).

OTF also has proven results including helping to:

• Create over 48,000 jobs.
• Attract or capitalize 571 startup companies.
• Attract $3.2 billion in follow-on dollars (from federal, state, local, private, and foundation funds) on top of the $473 million it has expended (through June 2009) on technology-based programs.
• Produce more than $6.6 billion in total economic impact in Ohio (through December 2008).
• Produce a total return on investment that has averaged 22% per year over the life of the initiative.
• Grow product sales from OTF-funded projects to $440 million per year (through June 2009) and are estimated to total at least $900 million by 2013.
• Double licensing income earned by Ohio’s leading research institutions from 2002 to 2007 it rose from $16 million to $40 million.
• Increase Ohio’s research base, from 2002 through 2008, it increased more than 60 percent, from $1.1 billion to $1.8 billion.
• Increase venture capital investment in Ohio. From 2003 through 2008, venture capital investment in the state grew almost 2.5 times faster than the U.S. average – 20.4% per year compared to 8.6% per year.
• And, 50% of the State’s OTF investment to date (through December 2008) has been repaid through tax receipts. The original investment, now projected to be $1.35 billion, is forecast to be fully repaid by 2014.

Most importantly for JumpStart and the entrepreneurs across Northeast Ohio and the State, OTF provides the opportunity for future potential critical resources which will leverage significant non-state resources for both direct investments into companies and for additional resources that may support the work of all of the Edison incubators in the region. The incubators include the Akron Global Business Accelerator, BioEnterprise, Braintree in Mansfield, GLIDE in Elyria, MAGNET, and the Youngstown Business Incubator, in addition to our local research-focused Universities and innovative established companies in the state.

Please read more about Issue 1 and please join everyone at JumpStart to help accelerate the progress of innovative companies in Ohio!

In the above blog, Ray is expressing his personal views as a citizen of the State of Ohio.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.

Recently, Malcolm Gladwell wrote an article called “The Sure Thing” in The New Yorker which shares the “entrepreneurial stories” of individuals such as media mogul Ted Turner and hedge-fund manager John Paulson.

I found this article fascinating because it speaks to something that I believe most entrepreneurs do not truly understand. And that is in order to realize very significant success in pursuing an entrepreneurial venture, the best entrepreneurs have a deep understanding as to why their products or services are going to be successful against the competition — and in many cases they understand this before they have even created the product.

Most entrepreneurs fall in love with their products or services. This article speaks to how both Turner and Paulson became experts regarding the industries their companies were operated in and how some of the “fundamental truths” in these industries were 100% wrong. These entrepreneurs, with deep insight and understanding, did the unthinkable by thoroughly understanding a few fundamental truths regarding their industries that others did not see or ignored.

Gladwell’s article is based on a new book called “From Predators to Icons,” written by French scholars Michel Villette and Chatherine Vuillermot who set out in the book to uncover what successful entrepreneurs have in common. This book shares that truly successful business leaders are anything but a risk-takers. But rather predators who seek to incur the least risk possible while hunting.

Every startup entrepreneur should read this article to help them to pause and consider some of the fundamental truths they are operating under as they pursue their entrepreneurial dreams. In most cases, there is likely going to be some additional homework they should do to increase their likelihood for sucess and reduce the risk of their new venture.

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.