Symbiotic economics: Ohio's corporate establishment meets the startup community
Nearly every major corporate success story sprouted from humble beginnings, usually involving someone with a good idea that recognized opportunity hiding beneath a cloak of hard work. And when it comes time for that entrepreneur to roll up her sleeves and dive in, she often needs a helping hand. After all, no business gets on the road to the Standard & Poor's 500 on bootstrapping alone.
Enter that entrepreneur's older and more established brothers and sisters.
If a rising tide lifts all boats, Ohio's entrepreneurs will need all hands on deck in order to boost the state's economic and employment stability. Make no mistake; Ohio's small businesses are indeed the tide. Per the Small Business Association
, they represent 98.1 percent of all employers and employ 47.7 percent of the private-sector labor force in Ohio.
So while the state's startup scene is enjoying a humble upswing despite today's difficult economic climate, there is no better time for established corporations to step up and pay it forward. To that end, the most recognized names in Ohio's corporate community are doing just that by advocating for startups and the entrepreneurs kindling them.
"Incubate and Grow"
In Cincinnati, the venerable business cornerstone and Fortune
magazine favorite Procter & Gamble
(P&G) actively benefits from their relationship with the area's small business community.
"P&G has a long history of working with smaller, regional companies and most certainly has seen the benefits of tapping into their creativity, innovation and services," says Eric Baumgardner, P&G's Associate Director for Global Business Development. "Via our Connect + Develop program
, we’ve shared technologies, either not in line with our strategic direction or too small for us to develop, with local businesses for them to incubate and grow."
In some cases, P&G shares their established household name by licensing their trademarks or smaller brands to a local company under which it may manufacture and distribute, says Baumgardner. "This has the dual benefit of creating local jobs while helping deliver consumer value in categories not core to P&G. We also regularly work with several local marketing, design and communications companies, as this region offers a true depth of talent in those areas."
, a nearby nonprofit innovation accelerator, is no stranger to P&G’s outreach efforts. Jeff Weedman, CEO of Cintrifuse, says P&G signed on with several other companies "to help make Cincinnati really shine as a magnet for innovative startups and innovation development." He continues, saying the local business community saw Cincinnati’s potential as "a diamond in the rough with a depth of resources and talent that needed to be effectively harnessed and showcased."
P&G has helped raise $51 million for Cintrifuse’s "Fund-of-Funds" with help from nine other Cincinnati companies. The venture seeks to bring more investment capital to entrepreneurs in Greater Cincinnati. Other contributors include Cincinnati Children’s Hospital Medical Center, Duke Energy, the University of Cincinnati, Western & Southern Financial Group, American Financial Group, Castellini Management Company, The Greater Cincinnati Foundation, The Kroger Co., and Messer Financial Services.
"So many business forces have come together to make Cintrifuse a working reality," says Weedman.
"We’ve seen the benefit of large and small companies working together," adds Baumgardner, "and believe that Cintrifuse is positioned to take that beneficial symbiotic relationship to entirely new heights. The potential is very real for some of these start-ups to develop into locally based, high-growth market leaders. Many of those companies will, in turn, likely help larger companies such as Procter & Gamble, perhaps as service providers or innovation partners."
The relationship between Cintrifuse and P&G, however, goes deeper than simple networking and support. Weedman spent more than three decades at P&G before moving on to Cintrifuse, 16 of which were as leader of the firm's Global Business Development. "It was the best job in the company, I think, because we led an open innovation collaboration (Connect + Develop), which formed external innovation partnerships delivering a series of game-changing products including Mr. Clean Magic Eraser, Swiffer Dusters, Olay Regenerist and Tide Total Care."
"We loaned one of our top executives, Jeff Weedman, a 35-year P&G veteran, to serve as Cintrifuse’s CEO," notes Baumgardner.
Weedman lauds P&G's role in "helping startups with counseling, advice, access to consumer insights and serving as an early testing ground for their ideas," along with an array of area companies that make up Cintrifuse's support team. "Without the vision, support and financial backing of these companies and local institutions, Cintrifuse would never have evolved. And now, we are working with 31 small, high-potential startups, many that are Ohio-based, but others that have come to this region because of the network of area expertise they can tap into to help their ventures grow."
With innovation, says Weedman, comes regional growth. "Cincinnati – and Ohio – have such a depth of business, research and marketing strength. This will prove a tremendous advantage for high-potential startups. This is important because it will create a better place to live," he adds, "where graduates can work, where new hires will want to come. It will enhance our collective ability to recruit and retain top talent."
got its start in 2009 courtesy of four Miami University seniors. Mandy Eckman, Bethany Skaff, Megan Stengel, and Tess Schuster were tasked with formulating a business plan for a competition at the school's Page Center for Entrepreneurial Studies
. They endeavored to create clothing for patients undergoing chemotherapy and dialysis that would keep them warm and comfortable during treatments and facilitate easy access to med ports with discreet zippers. The students got the idea from watching their own loved ones' health struggles.
The Libre team won the competition, which did not include a big cash prize, but something even more important. "The real value was in the network we had built," says Eckman, vice president of sales. That was just the beginning. After getting Libre established, they've fanned out across the Midwest all the way to the East Coast. Eckman credits the success in part to Ohio's biggest names in the clothing business, which the Libre team reached out to early on.
"Our initial contacts at The Limited
and Abercrombie & Fitch
developed from networking with friends, family, and at local events," says Eckman of the Columbus- and New Albany-based fashion staples. "Abercrombie helped us design our styles, taught us about sourcing materials and introduced us to some key contacts in the industry," says Eckman. "The Limited introduced us to a handful of manufacturers, mass-scale alteration companies, designers and tag companies that were very generous with support because they believed in our business."
When asked where Libre would be without the support of the central Ohio's established apparel vendors, Eckman responds, "We may not even have designs or a business."
A startup in Cleveland sings a similar song.
Between a Rockwell and a BoxCast
Gordon Daily, founder of Cleveland-based BoxCast
, generously credits his relationship with Rockwell Automation
for the company's early successes. BoxCast offers a complete video streaming solution that allows anyone with a video camera to broadcast live footage through their website, email or social media outlet. Viewers can watch on via any online device, be it computer, tablet or modern smartphone. The rapidly growing company has 12 employees.
Daily's professional life did not start with BoxCast, however. In the dark aftermath of September 11 and coming off the heels of a failed attempt at a professional baseball career, Daily crashed an on-campus interview day at Case Western Reserve University
and got his foot in Rockwell's door when a scheduled interviewee didn't show up on time. Daily went on to spend nearly a decade working at the automation giant prior to launching BoxCast. The relationship stayed sweet, however, and Daily lauds Rockwell for its continued support of his entrepreneurial activities.
"They provided me with technical and patent access," says Daily. "And encouraged me to take my idea and develop it commercially."
But what’s in it for Rockwell? Surely the manufacturing giant is motivated by the almighty dollar.
Wrong. Rockwell has never asked for anything in return. In speaking with Daily, it seems Rockwell simply wanted to support Ohio’s entrepreneurial community.
"BoxCast is a good example of how big companies like Rockwell Automation are using their technology and resources to support economic development in the region," Daily explains. "People at Rockwell are awesome. Great companies are made up of great people – and attracting great talent is very difficult to do. My hope is that the BoxCast story inspires others to seek out companies like Rockwell who care about their employees. Great companies are not afraid to invest and teach – daring to risk that they are enabling their talent to one day fly away."