Ohio Venture - OVA Review Newsletter
News from the Ohio Venture Association meeting on September 13, 2013

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Keynote Address:

Growing the Regional Innovation Network in Cincinnati

Timothy Schigel

Manager, Cintrifuse

Getting an entire regional economy that's used to riding the momentum of Fortune 500 organizations to also recognize and nurture innovative start-ups is hard, slow work, but it's beginning to bear fruit in the Cincinnati region.

That was the message Cintrifuse manager Tim Schigel shared with OVA members at their September meeting, kicking off a new programming season. Schigel is a Cleveland native and Case Western Reserve University graduate. He founded Share This, a Palo Alto-based enabler of social media sharing that now reaches more than 600 million people in 40 languages. He also manages the fund of funds for Cintrifuse, a start-up incubator/accelerator established in 2012 that has raised more than $50 million to support innovation in the Queen City region.

"There's been a lot of excitement and momentum about Cintrifuse, but also a lot of confusion. Cintrifuse was really started by the big companies in town–the CEO's of the 30 top companies. They got together and were reacting to the news that Chiquita was moving its world headquarters from Cincinnati to Charlotte. That was sort of a big blow. And they realized that the days of elephant hunting to try to get big companies in town were probably over, and that new growth was going to come from new companies."

So the group hired McKinsey & Co. to do a study, which mapped both the region's strengths and its weaknesses, the gaps in the existing regional innovation ecosystem. It set up a fund of funds, patterned partly on the Renaissance Fund in Detroit, through which the large organizations could collectively leverage their resources by investing in innovation. "People ask, how do you get the big companies to invest? It's easy–you get them to put the program together. So it's no surprise that they're investing in it."

While he mentioned gaps in that innovation network, he also noted the region had some existing strengths on which to build. "We're also building on some momentum that was already in place. We had CinciTech and Queen City Angels and found out we actually have above the national average in seed and early stage funding. So that wasn't necessarily the problem. The problem was Series A and Series B funding."

If you're going to help startups, he said, you need to address their three central needs: "they need capital, they need customers and they need talent, and a network of peers they can communicate with. So we're all about how to help them with that."

It was tough at first, he admitted. The local paper would cover their activities, but no one would initially offer to help. "It happens in hometowns. You overlook the guy who's local, because you think the guy out of town is smarter. When you work in these big companies, you don't see startups, you don't hang out in startup land. You don't know who they are. So there's no appreciation for what's going on. I think these are solvable problems, but I also think they're not easy problems to solve."

That started to change as one component of the plan, the Brandery, began to garner national recognition. "The Brandery has been named one of the top ten incubators–it's really one of the top three when you take the coasts out. It's a four-month program, ten companies are awarded spots. They get $20,000. They got something approaching a thousand applicants from 47 countries. One guy moved from San Francisco. Another moved from Shanghai."

The resulting deal flow has been tremendous, he said. "For me, if you can market your region properly, you can create that demand."

But he noted that these efforts aren't necessarily just about creating more entrepreneurs. "It's not necessarily about creating a hundred new startups. It's a nice metric, but that's a process metric. It takes a lot of startups to create success. But if you create success, you create a lot of folks who reinvest it back into creating more startups. We need models to show people. We're really focused on high-potential startups, and we know they can come out of anywhere. They're hard to predict where they'll come out of. But once we see the signs for a high-potential startup, we have to activate our network and the power of our customer base and our limited partners to remove every obstacle and accelerate their business. And to make sure that they win."

Schigel admitted there are still at least as many questions as answers in the process. "We're still trying to figure this out. Cintrifuse is a start-up itself. So I look at these (high performing startups) as our case studies. We have to have these case studies to show to prove that our model works."

More information:

Webcast from the Meeting:

Click on the image below to view the entire presentation as video.

Video Webcast from Recent Meeting
Webcasts produced by Tom Kondilas.

OVA's Video Archive is Online:

OVA is pleased to offer an archive of program videos to its website. You'll find the full video record of most OVA formal programs since 2008 at www.ohioventure.org/video-archive.html.

Upcoming Meeting Dates:

  • October 11, 2013
    Sandra Vance, MHA
    Senior Director, Interoperability Initiatives
    Health Information Management Systems Society (HIMSS)
     
  • November 8, 2013
    LaunchHouse
     
  • January 10, 2014
    Ivan Schwarz
    President
    Greater Cleveland Film Commission

See complete details and registration for these events.
 

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