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Vision 2016 | Leaders hope to reinvent the region through an 'entrepreneurial ecosystem'

Leaders hope to reinvent region through 'entrepreneurial ecosystem'

  • 5 min to read
Entrepreneurial ecosystem

Over the past year, local leaders have endeavored to create connections to yield an entrepreneur-sustaining environment – an “entrepreneurial ecosystem” – and to make that part of the region’s selling points and its next iteration.

When assistant marketing professor Skip Glenn prepared a visual representation of a local “entrepreneurial ecosystem,” he drew on experience making 3-D and virtual maps – as well as a background in biology.

The result showed spheres – companies, organizations, higher education – webbed together.

“Ecosystems build strength and stability through the number and amount of interactions between species,” said Glenn, who teaches at the University of Pittsburgh at Johnstown.

“Each player has a role and niche that creates an efficient hub of exchange with partners in the system.”

Over the past year, local leaders have endeavored to create connections to yield an entrepreneur-sustaining environment – an “entrepreneurial ecosystem” – and to make that part of the region’s selling points and its next iteration. Much of that has happened through the Entrepreneurial Alchemy program, Glenn said.

“Building a network of partners for cultivating ideas into enterprises is what EA and its members are actively pursuing,” he said.

“This means my students at Pitt-Johnstown can find technical expertise, incubators for nurturing their enterprise and funding to fuel ideas in that network.” 

A new trajectory

So far, the groups have created action through shared projects – such as competitions to allow prototype-ready students and local innovators to win funding – mentorship relationships with local entrepreneurs and regular brainstorming sessions with people from 15 or 20 businesses or organizations working to make the path of entrepreneurs smoother.

That represents a viable ground level, Community Foundation for the Alleghenies President Mike Kane said.

“The work of the entrepreneurial ecosystem feeds on itself,” he said. “The idea is we get people talking about doing things, we supply with them some of the resources, some of the connectivity they need to do things. And when they do start stuff, other people build on it. 

“We want to build a climate or a culture where that’s happening in our community.”

The hope, Entrepreneurial Alchemy Director Don Bonk said, is to help the region reinvent itself as a startup-friendly area, sourcing talent from existing industry clusters – such as education and health care – and from manufacturing and defense. The method, he said, is to create an intersection for people, funding and ideas.

“The whole purpose of the ecosystem is that new companies start, make money, create jobs – and then they’re part of the local tax base,” he said. “It’s the whole cycle. It’s really about the health of the community.”

Results are sprouting. Local entrepreneurs have launched some new startups with talent and ideas sourced from those networks, with more in the pipeline.

Local tech and software firm Problem Solutions and Boston-based Aptima Ventures started two spinoffs in 2015, and the Johnstown company has worked with or launched seven other companies – with another 10 planned for this year, President Mike Hruska said. The endeavors from the past year, including Aptima Ventures’ focus on commercializing tech developed for the defense industry, represent about $12 million in investments to Johnstown-area ideas, Hruska said.

That includes working with BrakeSafe, technology developed by Pitt-Johnstown engineering students and a startup that won funding through competitions there and with the university’s participation in Inc. U, which took them to Penn State for a final competition against teams from Penn State and Bucknell universities.

“The fact that they took second place at Penn State says something about our engineering and entrepreneurship programs combined – cross-disciplinary success,” Hruska said. “When you get business people and engineers together, you can make awesome stuff. That’s something UPJ has figured out, an ecosystem success.

“Groups of local people are mentoring them and helping them out. There’s a community that’s rallied around these guys. 

“Without that, people leave the area.” 

Pushing for more

David Luciew, a senior 3-D designer and developer at Concurrent Technologies Corp. by day, has made gains with his invention, the Wristocat, which won $3,000 in seed funding at PITTchFEST in 2015. Luciew received a patent for his wrist-support product in January, and in February was preparing to launch a crowdsource fundraising campaign through Indiegogo to cover manufacturing costs. He already has landed an agreement with QVC to feature the product.

Luciew said he sees potential in the region and its crystalizing ecosystem.

“If we were able to develop even 10 amazing products out of Johnstown, we could really make a difference in the whole economy,” he said. “The corporate line of thinking is gone. 

“We have to be creative. We have to invent our own things and get new products to market. We have to have a system that supports that.”

Kane said companies such as Problem Solutions and Sardonyx Capital – whose chief marketing officer is a regular at Entrepreneurial Alchemy – are showcasing what needs to continue in the ecosystem.

“We want more activity to happen that results in more startups, and that results in more people feeling like they want to do something special here,” he said.

Mike Artim is CEO of Cambria-Rowe Business College, which has launched programs in app and Web development and plans to create an incubator for those at the Conrad Building in downtown Johnstown.

Artim said he’s seen more progress to promote new business in the past year than in the previous decade. 

He, Kane and others have linked the ecosystem’s future closely to Vision 2025’s strategic plans.

“We are definitely making progress,” Artim said. “Are we where we want to be? No. We have made great strides in the last year and a half through groups like Entrepreneurial Alchemy. We are more open to listening to entrepreneurs. It’s pulling the community around those types of endeavors. You have to get the momentum.” 

Thinking regionally

To build on that, leaders are aiming to widen the scope. Bonk said a regional focus is critical.

“We have to build bridges to other communities,” he said. “Pittsburgh is only 65 miles from downtown Johnstown. State College is another center for talent and ability. Washington, D.C., is drivable. These are areas we need as a region. 

“Those three have one thing in common: a highly successful, knowledge economy and prosperity. We need to make those part of our geography.”

Creating a funding funnel has been key to plans for the ecosystem, Kane said, and that’s an area where he expects to see more focus.

Entrepreneurial Alchemy is working with State College-based private equity firm Allied Growth Strategies Management to put together the final pieces of an Allegheny Innovation Capital Fund. The fund is to debut this year and be available to a seven-county region, including Cambria County.

If that comes together as planned – and Kane said he is hoping for $5 million in commitments for the fund – deal flows could begin in 2017.

“This is a critical year,” Kane said.

The Creator Square project, a multilevel endeavor that aims to support business growth from entrepreneurial artisans – and focus on downtown Johnstown development – remains in the works, though organizers secured a building in 2015. The next steps are to fund upgrades to the building and set up a competition to bring “maker” entrepreneurs from outside the area to work with local manufacturers and startups to grow local business.

Another element still taking shape is “Start Right Factory” – where the ecosystem’s players could develop high-potential ideas culled from research universities. One technology is underway, with patents secured, but funding has been a work in progress, Bonk said.

“We need money from the region to invest in technologies that will benefit the region,” Bonk said. 

Landing private equity investment from outside the area can be a hurdle, which is why the regional fund is such an important piece, he said.

Although Bonk said he’s worked to tie progress to existing organizations, such as making PITTchFEST a Pitt-Johnstown and Johnstown Area Regional Industries collaboration, the $200,000 Department of Community and Economic Development grant that funded Entrepreneurial Alchemy expires at the end of April.

Bonk said he is hopeful he can find a new funding source. 

Well-positioned

While there are elements left to be placed, Kane said the ideas have been set in motion.

“This is what we want to do as a community, and Entrepreneurial Alchemy is set up to be the community’s effort to grow entrepreneurship – and to grow business and to grow jobs,” he said.

The area is on track for an evolution to becoming a hot spot for entrepreneurs, Hruska believes, but the local network needs to take advantage of the region’s situation – geographically and historically.

“I see us having a really good base, a great position between Pittsburgh and Penn State,” he said. “We have great universities. We have talented, smart people. We have a desire to create.”

That forging capability melds with area’s existing identity, he said.

“We have a reputation for being people who make stuff,” he said. “We made the steel. 

“We’re known as manufacturers. We’re trying to build a reputation: ‘We’re the people that make companies; we make ventures.’

“Rather than manufacturing widgets, we’re going to make ventures in the future.”y.

Kecia Bal is a reporter for The Tribune-Democrat. Follow her on Twitter at @KeciaBKay