26 Aug Columbus as a tech magnet has strong draw
It took more than Battelle. It took more than CompuServe. It took time and the lure of money and a helping hand.
But, undeniably, Columbus is quietly becoming a tech-company magnet.
Just a decade ago, “If you were an entrepreneur, you had to figure it out on your own,” said Victor Thorne, managing director of strategic development at Columbus 2020, this area’s economic-development agency.
“Back at the turn of the millennium, there wasn’t that support.”
Thanks to the state’s Third Frontier Project, which helps fund tech companies, along with incubator TechColumbus and the venture-capital Ohio TechAngel Funds, 174 technology companies have received a helping hand. And some that began elsewhere have pulled up stakes and moved to central Ohio to take advantage of the area’s resources and funding options.
Some were actively recruited by TechColumbus, while others have been part of the business incubator’s accelerated-development program.”Now, if you’re an entrepreneur, you have a place to go; people to mentor you; resources to do all your legal/accounting in an affordable way; strategic partners to accelerate your growth,” Thorne said.
“This was a flyover state. Now they’re landing here and spending time — and looking for their next investment, here in Columbus.”
Powermers, a company that originally was based in Boston, is one of the transplants.Columbus native Frank Scardena, now president of Powermers, had been away from home for years when he stopped by a TechColumbus event in 2010.”I took a tour and saw all the companies, and a light bulb went off,” Scardena said. “I couldn’t believe that this was in my parents’ backyard. I instantly recognized that this was going to explode, and I knew immediately this place was going to grow fast.
“So I moved my family up here without a job — and got a job at TechColumbus.”
During the time Scardena was director of venture development at TechColumbus, an investor mentioned a company that had “a technology that makes batteries better.”
Scardena didn’t look too closely at the company — Powermers — and its dozens of patents until a few weeks later, after visiting a clean-technology conference in Akron.
Giorgio Rizzoni, director of the Center for Automotive Research at Ohio State University, had said at the conference that the electric-vehicle industry wouldn’t develop until lithium-air-battery technology had developed, and he projected that was 10 to 20 years away.”And I said, ‘You have got to be joking,” Scardena said. He ran back to his office, reviewed the Powermers technology described in documents there, and experienced a defining moment.
“So, not only is it possible, it’s sitting on my desk!”Scardena knew that the company’s research team was extremely confident about the technology and possessed more than 60 patents. Its board of directors had been involved in more than $1 billion in other investments, and knew what it was doing.
“But there was no guy running day-to-day operations,” Scardena said.Even though investment money was available elsewhere, and the company was located in Boston, Scardena knew that Columbus was perfectly positioned to carry the ball.
“Startups have a much higher rate of success if they’re placed in a region where there’s already industry traction, where a hub has been established,” he said. If the company moved, it would be ” an electric-vehicle-battery company in the heart of the auto manufacturing industry.”
So, a year ago, Powermers moved to Ohio, and Scardena became its president. Time will tell if Powermers turns into a billion-dollar company.
In addition to Powermers, e-commerce-related companies that recently have relocated to Ohio include nChannel, a multichannel cloud-management system for retailers that came from Los Angeles; ZoopShop, which helps retailers sell directly to Facebook fans on their Facebook Newsfeed and came from Singapore; and Jifiti, a mobile gifting app from Israel.
The nChannel CEO moved to Columbus after active recruitment by TechColumbus and affiliated investors, including Ohio TechAngel Funds. CEO Steve Weber was attracted by the incubator’s collaborative environment and success in providing seed funding for companies focused on e-commerce and supply-chain technology in the regionZoopShop was a successful outgrowth of the 10x Xelerator program.
After the company applied for and entered the 10-week accelerator program, things went so well that investors soon came on board, the company launched its product and the founders decided to get visas and move the company to the United States permanently.
“You wouldn’t expect that Columbus is an obvious place to go,” Thorne said. ” Singapore, Israel, Philadelphia, Boston, California — they’re coming from markets where a lot of businesses have launched and grown. They chose to move because there’s more opportunity for them.”
Such was the case for Jifiti. “We work with large retailers and have developed relationships with them,” said company co-founder Shaul Weisband. “So we spend a lot of time in Columbus with our local partners. We realized we wanted to be in the ‘Silicon Valley of Retailers.”
Jifiti had developed an app “that allows shoppers to ‘teleport’ items without physically moving that item,” Weisband said. “So, say, you go into a Gap, you see a fashion and you want to send it as a gift to someone in LA. You capture the gift by the bar code and in real time you personalize a gift card and then email it to your friend — who can use that gift card in any Gap or go online and get the gift.”
Working out of offices at TechColumbus’ facility on Kinnear Road, Weisband and partner Yaacov Martin not only are physically close to major retail clients, they also have access to a deep pool of local Web developers and business funders.
“Back in Israel, we have a team of 10 full-time developers,” Martin said. “We came here originally for management and sales. But we have hired three full-time (tech) employees who are graduates of OSU, and we see that growing quite rapidly.”
Although Jifiti is “well-funded and does have wonderful partners,” the company will need more money within months to fuel further expansion. “Columbus-based groups are definitely on our radar,” Weisband said. “We haven’t yet finalized with anyone, because we’re interested in local participation, but we would prefer a local partner rather than another Silicon Valley partner.
“In general, the tech community has been tremendously accepting and enthusiastic. We are based at TechColumbus, and they practically embraced us. It’s close to a love affair because of the warmth in this community.
“We tell people that if you can focus 10 percent of the enthusiasm you have for OSU football into technology, we’d take over Silicon Valley — and that enthusiasm is there.”
Columbus 2020’s Thorne said, “It’s been a really remarkable evolution in the community, and we’r e just getting started; we’re not at the finish line. We’re just now starting the validation of the process, showing that it does work. It’s really great.”
tferan@dispatch.com