Tech Right Now
To the Friends of Paradigm Magazine:
What a challenging year. The macroeconomy trends continue to waver, offering a shaken country glimpses that the Great Recession is beginning to recede, but with no job growth in sight. The microeconomy still has a profound effect on Main Street as unemployment continues to rise and banks refuse to lend. Like many of my Gen X and Gen Y compatriots, I have lived through recessions before, but nothing quite like this. No doubt many tech-based companies in Northeast Ohio have felt the world-changing difficulties. The good news is many are not just surviving, they are thriving! Indeed, there are even a few companies that are just starting.
I have had the wonderful honor of meeting so many great entrepreneurs in Northeast Ohio. During my time as tech czar for the City of Cleveland, I was struck by the depth and hunger of many of these tech companies. I was proud to realize that so many of these entrepreneurs were honored to be doing business in Cleveland and Northeast Ohio. This was their home. During my tenure thirty-seven tech companies decided to move into the city. Most of these companies were clustered around two areas — the PlayhouseSquare entertainment district in downtown and, surprisingly, the old Tyler Elevator complex in the St. Clair-Superior area. If you ever get the chance, visit these areas and you will be stunned by the number of tech companies (if you are a bit shy, give me a nudge — I would be thrilled to walk you through both areas).
I have so much optimism for Cleveland and the surrounding area. I do. And the men and women highlighted in Paradigm are going to lead the way to our business renaissance.
Peace out!
Michael C. DeAloia
Tech Czar
LNE Group
lnegroup.com
5 Tech Things to Know
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The Age of Mobility: More than 30 million iPhones have been sold around the globe. Not since the PC has such a revolutionary tool had an impact on everyday life. I think this device is a platform for amazing applications.
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A Time to Tweet: I have seen social media sites exploding with new users and bewildering popularity. Consider this: With its 300,000,000 users, Facebook would be the fourth-largest country in the world. How do you harness the power of social media? What new, simple communication tools, like Twitter, are forthcoming? Forget the power app; we should begin defining them as “addictive apps.”
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The Application: If you want your mobile device to be popular, it must have a slew of apps. I think that clearly the iPhone, with its more than 50,000 applications, is king of the apps. With the commercial use of GPS, the mobile device can now offer a world of opportunities. It has unchained the world’s population from place, and the app is making all of us ubiquitous.
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Cloud Computing: Cloud computing refers to applications that are gravitating to the Web. The rise of the Web browser as our personal portal to the world and the applications we need is a radical departure from how the world has viewed intellectual property and computer strategy. Consider the effect on startups. Now, as an entrepreneur, I don’t need millions for technology infrastructure — it is all in the cloud. I expect a new golden age of entrepreneurship because startup costs are getting so low.
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Green Technologies: What started out as a movement (i.e., Earth Day) has morphed into a growth industry. The U.S. and, yes, even Cleveland have pegged their turnarounds on green technology. I believe it’s clear the concept of adopting an ecologically friendly lifestyle has taken root. As a result, many companies are devoting time and resources to this effort.
Technology Trends
Emerging industries are enriching the region.
By Karen Fuller
In some regards, Cleveland can be considered an old-school, white-shoe, blue-collar place. An old-guard city with steel roots, resistant to risk and firmly in touch with its past. But there are new industries waiting in the wings. And they are Cleveland’s promise for the future.
“There is tremendous growth opportunity here,” says Michael DeAloia, tech czar for LNE Group. “The temperament toward unique industry for Cleveland has radically changed over the past decade. It’s institutionalized now.” But he adds that there are growth engines that need to be fed, and it will take a radical mind-set to feed them. “People have been fighting at the local and state level to get Cleveland’s industry where it is today. We’re on the verge.”
What makes the region such a fertile ground for growth in emerging industries are the existing empires that have been in place for scores of years — great healthcare, research-based universities, excellent transportation and accessibility. If nurtured properly, these industries can someday replace our region’s prior dependency on manufacturing. “But training and workforce development will be key to making this happen,” DeAloia says. He says we must be able to take our unemployed and underemployed workers and transfer them into emerging industries — biotech, medical devices, software development, social media — that can use the same basic skills. “This must be a focus if we are to move forward.”
Social media makes the scene
By way of example, DeAloia mentions the social media industry. “In this region, the segment is almost ignored,” he says, “But it is growing in pockets. Companies are starting to march, but we need to help identify capital in Northeast Ohio to help keep the pace,” he says.
DeAloia says that what the region lacks is critical mass. “Thousands of manufacturing jobs have disappeared in Cuyahoga County alone since 1995. It’s a tough battle to fight, but we have to recoup the loss.” He says that we have the tools and technology to turn it all around and grow roses in the ashes. We simply need a cohesive strategy. “What we have here could become a minor league form of Stanford if we do it right.”
Biomedical quietly becoming a force
The biomedical industry can make a big play here, too. It just needs a good strategy. More than 600 small and emerging biomedical businesses call the region home, though only the biggest players such as Steris and Invacare are well known. “There are numbers of small firms tucked away in the nooks and crannies surrounding University Circle, Akron and suburban office parks around the region,” says Baiju Shah, president and CEO of BioEnterprise. He says the industry employs 20,000 people who are making the products that deliver health care.
The health care industry — one of the biggest employers in the region — requires a diverse set of products. And the biomedical industry delivers everything they need, from large pieces of tangible equipment that people understand to the more invisible things like drugs. That’s why this region is such a sensible place for biomedical to grow.
“Because the products are so diverse, the general public doesn’t see the full extent of the industry,” Shah says. But biomedical is blossoming undercover throughout the region; quietly stimulating the economy, providing jobs, shaping our future. Shah notes that every year BioEnterprise alone will see another 170 entrepreneurs come in with ideas and an additional 350 invention disclosures.
Organizations such as MAGNET, the Manufacturing Advocacy & Growth Network, are contributing much to the image, awareness and growth of biomedical, and could help Cleveland become a leader in the global marketplace. From conducting annual seminars to helping manufacturing companies find a niche in the biomedical sector, MAGNET is one of the champions of revamping our manufacturing industry.
“All the skills and capabilities that led firms to be part of the manufacturing industry in areas like metals, plastic and electronics are exactly the same skill set they need to become medical device suppliers,” explains Shah.
Software industry is wide reaching
Software development is also shaping the future of the region. It’s a rapidly growing industry here because of one of the region’s most underestimated assets: its fantastic university base. “It’s woefully underestimated,” says A.J. Hyland, CEO of Hyland Software. “But it is indispensible to the success of the region.”
Also, he says the fact that this area is affordable makes it ripe for industry growth. “Because of the low cost base here, we are able to sell solutions at the same price as elsewhere, but our competitors have a larger cost base. So we benefit from higher profitability and faster growth.”
Through these companies, products are being developed right here that are being sold not only locally, but also nationally and internationally.
Here’s the beauty of how it all comes together: as the economy grows and changes and emerging technologies continue to boost viability here, the region will have an easy time of selling itself to new businesses and to potential employees.
“One of the keys to attracting and keeping emerging capital in the region is being able to maintain a satisfied employee base so they can have an effect on supporting business,” says Hyland.
This region is equipped to do just that, with amenities like professional sports, excellent arts and culture, parks, libraries, convenience, transportation and a very reasonable cost of living. Add to that our excellent health care, universities and research institutions. The pieces are in place — now it’s just a matter of putting it all together.
Beachwood Business Development Center
Job description: The City of Beachwood and its economic development department have been busy finding homes for some of the area’s most prominent businesses, including University Hospitals’ Ahuja Medical Center and the Eaton Corporation. While large moves make headlines, the city also houses a secret weapon — the Beachwood Business Development Center (BBDC).
Local help: “We provide entrepreneurs with a platform of services that are designed to provide sustainable growth,” says Howard Thompson, BBDC director. Partnering with Cleveland State University’s Nance College of Business provides an infusion of research, marketing and knowledge resources that typically aren’t available to early-stage companies. The Global Gateway Lecture Series reached out to 150 businesses last year. The BBDC has helped launch businesses that have raised $89 million in equity capital and employ 325 people. The success comes from its capacity to provide a menu of innovative resources that help clients overcome their challenges.
Worldview: A few years ago, the BBDC developed a strategic initiative to be a leader in international attraction efforts; today that plan is a launching pad for success that other Ohio organizations are copying. The group assisted 17 international companies in the last two years.
Corporate citizen: “We proactively build partnerships that will mutually benefit our community and our region. Last year the BBDC brokered an agreement between BioOhio and BioJerusalem that will bring more Israeli biotech investment to our region,” explains Mayor Merle Gorden. “We created a global framework that can be used as a model to bring more jobs and wealth to Ohio.”
Working hard: Whether it is creating a specialized space for a client or establishing a B2B liaison relationship here or internationally, the BBDC will do its best to make you successful. Its Web site, beachwoodbusiness.org, provides businesses with useful tools and information. — Jason Lloyd
Biz Edge
Owner/president, John Bacan
Job description: “It’s difficult for us to pin down one particular thing we do. We’re an IT department for hire that has a lot of specializations: security, forensics and acquisition. A lot of it requires a business knowledge as opposed to tech knowledge.”
Gold standard: Biz Edge has earned Microsoft’s Gold Partner status. It’s the highest level of partnering a business can have with Microsoft.
Gray areas: Eleven employees averaging 15 years’ experience each make Biz Edge one of the more experienced IT firms.
CSI Cleveland: The network forensics tools can identify security holes before they become problematic. “We may find the virus scanners aren’t up to date. An intrusion may be found through a penetration test exposing holes coming into the network that can create a security risk. Simply said, would you leave your house unlocked? We will know if the lock and key are missing from your network.”
IT made simple: Nonprofits, small and medium to large, rely on Biz Edge for its ability to incorporate all facets of a business. It also works with a variety of small, midsized and large for-profit companies. “From an IT standpoint, you have to understand how the pieces fit and make it run smoothly. That’s how we differentiate ourselves. We’re not just fixing computers, we’re trying to help a business run smoothly.” — Jason Lloyd
limeribbon.com
Board member, John Heaney
The limeribbon.com team includes Doug Hardman, CEO of Sparkbase; John Briggs, vice president of Blue Star Design; Michael DeAloia, LNE Group; John Heaney, principal of Orange Envelopes; and Julia Briggs, president of Blue Star Design. Not pictured: Thomas Mulready, CEO of CoolCleveland.com; George Nemeth, principal of Brewed Fresh Daily; and Matt Dickman, senior vice president of Fleishman Hillard and TechnoMarketer
Job description: limeribbon.com is an online gift registry that incorporates social networks. Consider it a worldwide wedding registry without the spouse. Heaney, who came up with the snappy name, says the site will launch in late October with an application on Facebook. One for Twitter is soon to follow.
Social hour: Why tie into Facebook? It’s the most popular of the social networks. “Whether it remains the dominant platform in 10 years, who knows? But it’s the dominant action now and you have to play where the people play,” says Heaney.
Gift exchanges: “Gift registries have existed forever. We’re weaving it into the fabric of your social media activities. When you see things on Amazon.com or Target, there’s a quick and easy way to drop that onto limeribbon. You can tell a lot about a person by the things they’re interested in and acquire. Are you an iPhone or a BlackBerry person? It’s another way to extend your social personality online.”
How it works: Users can surf the Web and register wish lists for birthdays or Christmas. Parents and friends can then view the registry for gift ideas. “I know what to buy a 7-year-old, but who knows what a 17-year-old wants? Particularly a 17-year-old girl?”
World Wide Registry: limeribbon will have links to all the major retailers. Buy a book for your daughter through Amazon and it will automatically be taken off the registry.
Girl power: Studies show women love this new idea. That’s good news for a couple of reasons. “Women, in general, do all the shopping. And the fastest-growing Facebook demographic is women over 35. I’ve talked with women in their 40s relatively recently who have gotten involved with Facebook. Once they get on, it’s daily. It’s become part of the fabric of their day.” — Jason Lloyd
Fidelity Voice & Data
President, Robert Marks
Job description: Marks was an employee at AT&T before leaving to start his own phone company. Fidelity offers voice, data and Internet services for businesses of all sizes. “It would be like leaving Lowe’s to start my own hardware store, but I’m not selling hammers and light bulbs. I’m selling a lifeline for customers’ business. It actually works in the mom-and-pop model for telecommunications.”
Local flavor: Fidelity services companies in 35 states, but it is headquartered in Cleveland. It has won the Weatherhead 100 award two straight years for being one of the fastest growing companies in Northeast Ohio. It is projected to generate $17 million in revenue in 2009 with 24 employees — most of whom have felt the pinch of corporate downsizing. All employees are based in Cleveland. “If just 10 percent of the Cleveland market would give us their business, we’d hire another 1,000 people.”
Eyes have it: Trained technicians are available to answers phones 24 hours a day for troubleshooting and support so problems can be fixed in minutes. In addition, a complex monitoring software system alerts Fidelity if a client’s connectivity is lost. If a business loses power or a tree falls on a line, Fidelity is the first to know. “Our customers usually hear from us before they call us with a serious issue. Imagine your phone company calling you first when there’s a problem.”
Company policy: Fidelity doesn’t sell to consumers because it caters strictly to companies: hospitals, schools, health professionals, nonprofit agencies, government buildings and businesses of all sizes. “When I started this company, phone was everything. Data was a second thought. Now your data connection is equally, if not more, important than your phone service.” — Jason Lloyd
Youngstown Business Incubator
CEO, Jim Cossler
Job description: Youngstown’s image is changing thanks to YBI’s focus on software over the last eight years. “Rather than being mediocre at a lot of things that don’t make sense for our city, we wanted to be world class at one thing that does make sense.”
Hail to the chief: Cossler is best known as YBI’s chief evangelist. He serves on business and computer science advisory boards at Kent State, Hiram, Akron and Youngstown State. He is an alumnus of YSU with a major in philosophic literature.
Location, location, location: YBI wants to attract software companies within an hour’s drive of Youngstown. That includes Cleveland and a number of points throughout Pennsylvania. “If you’re a business-to-business software company, you’re in that corridor and you’re not here, you’re nuts.”
Growing up: The typical blueprint for an incubation is to graduate companies into the business world. YBI doesn’t believe in graduating companies. “We never want them to leave. From the first time we meet with the company, we tell them we’ll hold you personally responsible and we’ll hold every employee you hire responsible for sharing something you know with someone else who needs to know it in this management cluster. If you come into this program as a one-person startup, there are some 300 people working at our eight companies pledged to help you. Next year there may be 600 and the year after that perhaps 1,200. It will transform [Youngstown].” — Jason Lloyd
ASM International
Everything Material
2010 President, Fred Lisy
Job description: President of Orbital Research Inc., expert in advanced controls and MEMS (micro-electro-mechanical systems). First Clevelander in decades to serve as president of ASM, the society for authoritative materials knowledge.
Just browsing: While asminternational.org is geared toward engineers and researchers, middle schoolers can visit ASM’s site at cityofmaterials.com to have fun with materials science in everyday life.
Center of materials knowledge: By creating online materials solutions centers in collaboration with universities, national labs, government agencies and other leading materials and engineering societies, ASM is building on the materials leadership that’s part of the DNA of Northeast Ohio.
Innovated in Cleveland: Universities like Case Western Reserve, companies like Swagelok and Orbital Research and organizations like ASM are showing the way to a unique competitive advantage: “Innovated and made in Cleveland.”
Future ambitions: ASM’s geodesic dome HQ at Materials Park is being listed on the National Registry of Historic Places. “The materials we use are critical to our quality of life. We are rededicating ourselves to bringing our message of innovation, knowledge, performance and sustainability to new audiences and future generations.” — Jason Lloyd
SchoolOne
President, Bob Longo
Job description: A technology service and Web-based software company focused on K-12 education that provides gradebooks and data collection tools for information like attendance and behavior.
Gold standard: A certified partner of Microsoft and Cisco, SchoolOne manages IT for the Cleveland schools.
Cyber school: Online K-12 schools are popping up across the country, accounting for a decent percentage of SchoolOne’s clients. They are quickly growing in popularity for children who would otherwise be home schooled or need tutors, and for alternative learners who don’t thrive in traditional schools.
Welcome to technology: Totaling attendance within a district used to be an all-day task. With the proper software, now any type of school can figure attendance in seconds. Those numbers are plugged into databases and later used for determining class sizes and calculating state and federal funding.
Expanding the boundaries: Longo, who has built a distinguished education-technology career with Silicon Valley based companies, was recruited to SchoolOne in September to lead its expansion in the education market. He expects significant advances in the application of technology for educational improvement over the next few years. “Information technology facilitates the personalization of learning and allows teachers to tailor instruction for every child in the way special education has done for years.” — Jason Lloyd