Youngstown is not the kind of place you’d ordinarily look for an economic success story. The city has been down so long, it’s become shorthand for the rustbelt. It was hit hard by the decline of steel mills, and never recovered. The massive GM plant up the road is now a source of uncertainty. So when I heard that one of the brightest spots in the region’s economy was in Youngstown, I had to check it out.
ON SCENE: So I just got off the highway here in Youngstown and as I’m driving along, you really see the signs of economic decay. There’s really nothing around. But then you make a right, right over a bridge, onto West Federal Street, and there you see the impact of the business incubator.
What you see is a burgeoning complex of buildings on a street that, not too long ago, was dangerous and virtually deserted. Much of the transformation here is due to the hard work of Jim Cossler, who met me outside.
COSSLER: Across the street was a former Higby’s department store, it had been abandoned for at least a decade….
Cossler is CEO of the Youngstown Business Incubator, but he prefers the title: chief evangelist.
He takes me inside and it looks like a dorm for infant tech companies. Funded mostly by the state, startups get free rent and utilities to focus on growing their businesses.
COSSLER: So three companies on this floor. At the end of the hall you have Zethus software…
Many of these companies are little more than a couple of guys huddling around a laptop, trying to get a service ready for market. But they all have similar goals and problems—and that’s the point. When Cossler took over a then-floundering Youngstown Business Incubator in the late 1990s, he moved it away from the traditional model of funding lots of unrelated businesses and instead laser-focused on business-to-business software firms—companies that make high tech products for other companies to use. That’s something he knew could thrive in this region, if given the tools.
COSSLER: Yes, you can start a successful, technology-based company in Northeast Ohio. You don’t have to be on the coasts. You don’t have to be in Silicon Valley. You don’t have to be in the research triangle.
And, beyond even Cossler’s expectations, one company in the incubator has proven that.
In a sparkling new building next to the incubator, Turning Technologies shows the other incubator startups what’s possible. In 2007, Inc Magazine ranked it the fastest growing software company in the nation. Turning makes what-are-called audience response systems. You’ve probably seen them in game shows… little wireless keypads that let people enter their response to questions. They’ve been taking off in schools and colleges, and in the past few years, the company has seen staggering growth.
Mike Broderick is Turning’s CEO.
BRODERICK: Technology companies don’t come out of Youngstown, OH. Well, we think Turning and other companies, and Youngstown Business Incubator have changed that mindset because we’ve proven that good technology companies can come out of…
Broderick says he doesn’t need to go to the coasts to attract world-class talent. Most of the young staff comes from Ohio. And, the company’s success has attracted some from farther away. Brad Gant moved from Florida to run Turning’s education division. He knew the popular image of Youngstown…
GANT: Certainly, the area has a reputation that I don’t think is fair. And, so, once I had the opportunity to come up here, meet people, and learn more about Youngstown, any reservations I had passed.
And that’s the power of the incubator says Youngstown State Management professor William Vendemia. He says its success has a big effect on the region’s image.
VENDEMIA: It’s not like it’s turning around the economy. But it really, I think it’s important, when we go into classes, and we try to point out successes, that you have someone right down the street that says, this is a success, these are local guys and they made it. So that it shows that it can happen. It’s not something that doesn’t happen here.
But back at the incubator, you’d be forgiven if you thought you were at a Silicon Valley startup—watching staffers play foosball and air hockey.
Fast-growing Turning hasn’t been immune to the economic downturn. Last month, it laid off 30 staffers, after the company didn’t grow as fast as expected. Still, the company is forecasting 10-20% growth this year. And in this economy, and in this region, that’s nothing to scoff at.