JumpStart: IdeaExchange Blog

Entrepreneur magazine’s August 2010 edition featured a story “50 really cool cities to start your business,” or as they further detailed, “the 50 cities and 10 lifestyles energizing businesses of all shapes and size.” These types of lists are always fun to read for the selections that are surprising, or redemptive, or just plain right. I never thought of Jackson, Wyo. as a great place for entrepreneurship (it’s under the “great outdoors” category). Great to see Pittsburgh was the leader on the list of “recovery and rebirth;” the collective leaders there deserve it. And while San Diego was on the “living in paradise” list (it really is paradise there, for entrepreneurs and residents alike), I was surprised to see Albuquerque.

But as I skimmed the list, I realized it quickly: not a single community in Ohio was on the list. Clearly, I have my media relations work cut out for me. But just to make sure that the Entrepreneur folks don’t have to work too hard to learn about the assets of Ohio — or Northeast Ohio in particular — I thought I’d go ahead and list my contributions here. (And please be sure to let me know what I’ve missed)!

• The great outdoors: “…where peaks and valleys are more than just points on the graph”
  Northeast Ohio actually does have peaks (such as in Summit County) and valleys (such as the Cuyahoga Valley National Park, ranked as the eighth most visited national park in the country alongside parks like Yellowstone and the Grand Canyon), but it may be less well-known that Northeast Ohio is actually an outdoorsman’s dream, with lakes and rivers (as well as one of the Greats - Erie) for fishing, thousands of acres of parks nicknamed the Emerald Necklace, and hundreds of thousands of acres for hunting. Lorain and its larger western neighbor, Sandusky, not only offer several of the best trout fishing clubs but also has the GLIDE incubator and the Lorain County Community College Innovation Fund, a pre-seed fund investing $25,000 and $100,000 grants in promising entrepreneurial companies from across Northeast Ohio.
• City life: “higher costs, higher stakes but even higher visibility”
  There are not really any places in Northeast Ohio where “higher costs” is a reality; cost of living in this region indexes 93 relative to the national average. But obviously, the biggest city here with the biggest visibility is Cleveland itself, and almost 50% of JumpStart Ventures’ 48 portfolio companies are located in the city of Cleveland. When you consider all the ecosystem elements in Cleveland — from CWRU to Founders’ Café and Gorilla Group, from JumpStart and MAGNET to Cuyahoga County’s Opportunities Technology Fund — Cleveland should make the list.
• Recovery and rebirth: “cities on the mend, where even the smallest business can make a big difference”
  I’m always very impressed with Akron. With its own incubator (the Akron Global Business Accelerator), an investment fund for Israeli companies looking to expand in Akron, and the reinvention of the downtown area (including the minor league Akron Aeros, new restaurants, and early-stage companies such as ECHOGEN Power Systems), Akron has really transformed itself from the former “Rubber Capital of the World” to the new “polymer capital of the world” (so to speak).
• Living in paradise: “why wait until retirement to enjoy a life of sun, surf, and sand?”
  Aside from golf courses, there’s still plenty of sand and sun (at least in the summer months) up on Lake Erie, with some of the most beautiful beaches in some of the eastern suburbs of the city. Also on the eastern side of Cleveland are the communities that get the most snow in the winter (in case that’s your version of paradise). The eastern suburbs of Cleveland - including Mentor, Mayfield, and Willoughby, — are home to some of the fastest growing biotech companies in the area, such as STERIS, QED, and Neuros Medical. The area’s proximity to Cleveland Clinic and other healthcare cluster participants, along with very pleasant places to live, make it worth noticing.
• Creative centers: “…where creativity and capitalism make sweet music together”
  Oberlin is one of the most creative places in the country, with its brilliant, quirky counter-culturalism embraced by both its students and its residents. Oberlin College’s unique entrepreneurship programs (which include funding for student-run businesses) have not only created a few student-run startups, but attracted other companies — such as Greenfield Solar — to savor the culture. And don’t forget the Oberlin Conservatory, which really is generating sweet music.
• Family-friendly: “…where company and family can both grow up right”
  Everywhere in Ohio is family-friendly, but nowhere more so than Northeast Ohio. One of my favorite thriving entrepreneurial centers for families is Chagrin Falls, nestled in the rolling hills 30 miles southeast of Cleveland. Good public schools, a charming town center complete with natural waterfall, and a burgeoning entrepreneurial community including standouts such as CerviLenz make this one worth the list.
• Off the grid: “…where entrepreneurs have the latitude to forge their own paths”
  Youngstown offers one of the best examples of this I’ve noticed for years. With its location halfway between Cleveland and Pittsburgh, the YBI, and focus on B-to-B software development, Youngstown State and its student community, and the revitalization of various parts of the city, it’s an area ripe for entrepreneurs desiring to make their own way.
• Green scenes: “where capitalism meets eco-consciousness”
  Wooster, in the heart of Wayne County 45 miles west of Akron, is the home of ABSMaterials, one of the companies providing solutions to BP to clean up after the gulf oil crisis. The technology came right out of the College of Wooster’s chemistry lab, which isn’t a surprise given the initiatives run by the Center for Entrepreneurship at the college — whether they include brainstorms on Thursdays (complete with popcorn) or entrepreneurship programs for the area’s incarcerated.
• College towns: “start a business, and learn a thing or two”
  As if Wooster and Oberlin weren’t enough, there are a host of other college towns in the area all fostering entrepreneurship individually and together — from Berea (Baldwin Wallace College) to Hiram (Hiram College), from Ashland (Ashland University) to Painesville (Lake Erie College), and many others. But one of the best examples is Kent, which balances a quaint college town feel with the resources and heft of the state’s third largest university, Kent State. The University’s Center for Entrepreneurship has led to office hours for entrepreneurs and the start of the region’s own incubator, in addition to local entrepreneurial superstar Kent Displays.
• Small towns, big opportunities: “small ponds where your business can be a big fish”
  Have you been to Canton? Besides the Football Hall of Fame, this small city has a historical legacy of entrepreneurship. The three largest private employers there of the last 100 years — Timken, Diebold, and Hoover — were all started by entrepreneurs who found a community more than excited to embrace their ideas. The city’s leaders are energizing entrepreneurship again, and entrepreneurs interested to start high-growth businesses will find themselves more than embraced.

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.

I just read a copy of the Global Detroit Study, which “revealed the important role that the foreign born play in transitioning our region’s struggling auto manufacturing economy into to the New Economy”. This wasn’t a surprising conclusion given the facts revealed in the study, by the NVCA, and in Richard Herman’s book “Immigrants Inc.”:

• Foreign born people comprise only 12.5% of the U.S. population but possess half of all new Ph.D.s in engineering.
• Foreign born people account for 45% of all new Ph.D.s in life sciences, physical sciences, and computer sciences; and 40% of all new masters degrees in computer sciences, physical sciences and engineering.
• In the workplace, 24% of all scientists and engineers with bachelor’s degrees are foreign born and 47% of all scientists and engineers with doctorate degrees are foreign born. One quarter of all practicing physicians in the U.S. are foreign born.
• Foreign born people are 1.8x more likely to start a business than those born in the U.S.
• Over 50% of tech companies in Silicon Valley have a foreign born founder (including Google, Yahoo, Intel, PayPal, Sun Microsystems, and YouTube).
• Foreign born inventors apply for around 35% of international patent applications filed within the U.S.
• Foreign born people founded 25% of all public venture backed companies in the U.S. between 1995 and 2005, and within the high tech arena, this ratio shot up to 40%.

This is not a new phenomenon; consider American history and the entrepreneurial legends of the past: DuPont, Pfizer, Dow Chemical, Procter & Gamble, and Diebold were all started by foreign born people. Even Andrew Carnegie was born in Scotland before emigrating to the U.S. with his parents and becoming one of the most influential entrepreneurs and industrialists of his time.   

10% of JumpStart Ventures portfolio companies have been started by foreign-born entrepreneurs, including: Echogen Power Systems, Embrace Pet Insurance, Electron Database, CardioInsight, and Great Lakes Pharmaceuticals. All of these companies have been making tremendous progress, as we have been reporting through JumpStart Connect and other vehicles. The team at CardioInsight is a great example of many of the statistics demonstrated above: Ping Jia and Charu Ramanathan, two co-founders, were here getting PhDs from China and India, respectively. In the course of their research, they identified a technology with commercial potential, and have been working on growing the company since. CardioInsight has not only raised JumpStart Ventures money, but also brought in a CEO to lead the company through the next stage of growth, one who has previously led exits in a similar space. Where is the CEO from? Canada.

We need more of these types of stories in Northeast Ohio, plain and simple. Whereas Northeast Ohio and particularly Cleveland grew into a leading city in the U.S. because of immigrants, the rate at which these people have come to the region has slowed dramatically in the last fifty years. Luckily, lots of people are worried about this and there are several initiatives around town to make Northeast Ohio more welcoming to immigrants. One that I find incredibly exciting is TiE Ohio, the Ohio Chapter of The International Entrepreneurs. A little over a week ago, the chapter featured a talk by Dr. Hiroyuki Fujita, the founder and CEO of 3 year old Quality Electrodynamics (QED), a company on Forbes’ 25 Most Promising Companies list with over 60 employees today. Dr. Fujita’s story is similar; he arrived at Case from Japan to get a PhD, incubated his company for two years while proving out his imaging technology, and since that time, has secured global customers such as Phillips and Siemens, leaders in the field of imaging and MRIs. This event was just an example of the activities TiE is leading in the region; in the fall, they will have the International Entrepreneur Awards, a business plan competition for entrepreneurs, more networking support, and most of all, mentoring opportunities. I want to see you at the next event.

Other ways you can get involved with this exciting Northeast Ohio community of foreign born entrepreneurs, or entrepreneurs-to-be? 

1. Engage with JumpStart’s Launch100 program to get help growing your early-stage business.
2. Sign up for Inside Inclusion and JumpStart Connect to hear the latest and greatest on everything related to entrepreneurship in Northeast Ohio.
3. Hire an intern. There are a number of foreign-born students at local universities whose education and experience will benefit your company. Let me know if you are interested.
4. Share your stories with us so we can share them.

Any other ways I didn’t mention here? Let us know!

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.

Larry Page and Sergey Brin did not invent their mathematical PageRank algorithm technology or build their company, Google, alone. They had a mentor, Rajiv Motwani, a Stanford professor of computer science. Brin wrote last year, “…Rajeev helped to coordinate a regular meeting group on [the subject of data mining]. Even though I was just one of hundreds of graduate students in the department, he always made time and effort to help.”

“…always made time and effort to help”: a true sign of a mentor, and Motwani left his mark as a mentor or advisor on many more Silicon Valley startups, among them one of our favorites at JumpStart, StumbleUpon.* In fact, most people know intuitively how important advisors, coaches, and mentors are to a startup’s development and success, but it’s rare indeed that we actually celebrate advisors, coaches, and mentors. Do we even know what a mentor is vs. an advisor vs. a coach is, never mind having an iconic image of a mentor like we do of an entrepreneur (the equivalent, mentor/advisor/coach-wise, of a Brin, Khosla, Gates, Jobs, Ellison)?   

Advisor
I think of an advisor as a professional who advises the company and not the individual entrepreneur, though this role is more informal than that of a Director. That said, it is not a totally casual role either. For instance, at JumpStart Ventures, we typically advise that companies that put together an Advisory Board should absolutely pay those advisors, albeit a very small, even token amount. $250 per meeting (plus expense reimbursement) is fine for a startup; the point is for the entrepreneur to show that she values what she is getting and to add a hint of formality to the advisory process. Paying in options or restricted units also works so long as an entrepreneur is able to issue those options with minimal administrative cost (ie, don’t spend $3K on legal fees to get the stock issuance mechanism right just for the BOA alone; if it’s part of a bigger strategy, then OK). .1% (that’s one tenth of one percent) per advisor is OK for a startup, and of course is probably rich for a company that is beyond startup stage.** Getting creative is smart too. If you’re a pet food company, pay advisors not with cash or equity, but with a year’s supply of pet food. If you’re a $5MM+ dollar travel company, then offer a free cruise or something like that.

With regard to coaches and mentors, I once heard an interesting differentiation between coach and mentor, specifically:

• A coach focuses more on results; a mentor focuses on attitude
• A coach focuses on skills; a mentor focuses on vision
• A coach encourages you to fix problems; a mentor encourages you to lead a great life
• A coach helps you understand the “hows” of your career; a mentor helps you understand the whys

Coach
The way I would also boil this down is that a coach focuses on the individual, but is also aware of the team and company overall. A coach is trying to get the most out of an entrepreneur for the benefit of the company. Some coaches are paid; executive coaching is a whole industry. In startup land, vs. big company executive land, cash is tighter (what a revelation, eh?) and so you see entrepreneurs finding creative mechanisms to get coaches. Sometimes they find a peer to coach them. Or, they find a group like YPO, EO, or Vistage International. Maybe they wait until they are past startup stage, more in positive cash flow stage, to get a coach. Occasionally, they are able to find a coach who will do the job at a significant discount or for free. Honestly, it’s all over the map.

Mentor
A mentor is the most personal connection. It is that person who will help you grow as an individual, and here I now reveal the answer to the question posed in the blog title: Obi, Dre, and Sir Laurence were all mentors to, respectively, Anakin Skywalker, Eminem, and Jack Nicholson. The idea of the mentor is to help the individual reach their fullest potential in life. That personal connection can be impactful enough that it ends up benefiting the company, but that is not necessarily the goal. I have had a mentor, coach and advisor and I can definitely attest to the fact that while the coaches and advisors helped the company and me, the mentor did have the biggest impact on me in life. In fact, I still have his three primary pieces of advice to me as the top Memo in my handheld device so that I see it every day, kind of a security blanket (or, a hair shirt perhaps, since it is also brutally honest) for the soul.

Whether service providers, professors, investors, serial entrepreneurs, or big company executives, these forces behind the forces — these advisors, coaches, and mentors – are really important to a company’s, and/or an entrepreneur’s, and/or an individual’s success. What’s common about them is that they take more initiative than they need to take, really believed in the company, concept or individual in some way, and expect little (and deserve much) in return.

At JumpStart Ventures, we have nearly 50 portfolio companies run by nearly 50 diverse entrepreneurs, so I have been able to see tons of great advisors, coaches, and mentors. I have a running list of some tops, and it’s surprising how different one is from another other than their genuine desire to help, just like Motwani — but I would love to know who you think is top. Drop me a line or better yet reply to this blog with your thoughts on some top entrepreneurial advisors, mentors, and coaches. Celebrate them.*** They deserve it. By the way, they don’t need to be based in Northeast Ohio: I am, alas, open to the possibility that there may be some entrepreneurial passion, talent and skills beyond the NEO area…

Notes:

* Actually, I’m not sure whether he was advisor, mentor, or (the more mercenary, mortal) investor, or all three, in StumbleUpon

** Full disclosure: the “math” here is very back of the envelope. Say the average high growth start-up nationally is valued at inception at $1MM total. .1%=$1000. I suggested that $250 per meeting might be a good token cash amount. Board of Advisors might meet 4X/year = $250 per meeting = $1000 in cash. On the one hand, the options are not liquid and are slightly an administrative pain to deal with (accounting, vesting, remembering you have them). On the other hand, they ostensibly have big upside and one wouldn’t be on a board if one didn’t believe that. In a very scientific manner worthy of a blog, I figured those two pros and cons equaled each other, and so came out at .1%. Also, I saw somewhere that someone else expert-like recommended approximately this amount, which only reinforced my back-of-the-envelope, non-Black-Scholes calculation. Also, I have not to-date seen anyone recommend >1% for a member of an Advisory board (BOD is different) so that may set an upper bound. 

*** Twinsburg, Ohio celebrates twins every year with a festival that draws national crowds. Maybe Mentor, Ohio — beautiful, and right here on Lake Erie — ought to celebrate mentors every year with a similarly large event.

Becca Braun is President of JumpStart Ventures. She founded and led a number of early-stage companies and organizations, as well as worked as a private equity investor and management consultant. She received her MBA from Harvard Business School and her BA in Linguistics from Harvard University. She is keenly interested in the intersection of wealth creation and broad-based regional economic growth.

Local company (and JumpStart Ventures portfolio company) ABSMaterials is stepping up to the plate in an effort to aid the cleanup in the Gulf. Their core technology, called Osorb, can actually absorb oil (and other substances) from water, trapping it within so it can be removed. They are sending their water purification system to the Gulf with hope that it can help in the massive cleanup effort which lies ahead.

Last night, Cleveland’s WKYC featured the company and the work they’re doing:

 Congratulations to ABSMaterials!

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.