Wednesday, May 5, 2010

Tech across Ohio - Youngstown, Ohio, of all places, is attempting to reinvent itself as a technology center. - Inc magazine feature -Semper Youngstown

Semper Youngstown

Youngstown, Ohio, of all places, is attempting to reinvent itself as a technology center.

Greg Miller

Tough Town Paul Dunleavy, an iconic figure in Youngstown, runs and walks through the streets carrying a 55-pound log. As he does it, he prays for his city.

Greg Miller

Repeat After Me Mike Broderick (left) is a son of Youngstown who came home and started the two-time Inc. 500 company Turning Technologies. Jim Cossler gave Turning an assist at the Youngstown Business Incubator. The big question: Will there be more Turnings?

Greg Miller

Greg Miller

Steel City Remade Youngstown's strategy for prosperity in the post-steel era includes a controlled shrinkage. But it still has the architecture and public spaces of the vital, much-larger city it used to be. This is West Federal Street, a couple of blocks from the Youngstown Business Incubator.

There are no hotels in Youngstown, Ohio, population 82,000, and there is no real airport, either. Even before you get there, you have a sense of the place as somehow gutted of commerce. But then you roll into the city, over the highway, and you shudder a bit, for the skyline is sublime. Here is the Central Tower, a graceful 17-story art deco sliver that narrows, à la the Empire State Building, as it reaches its peak. Here, beside it, is the older, more earthbound Huntington Bank building, with its white terra cotta façade.

Both of these structures were built for the ages, before 1930, when Youngstown was among the three largest steel producers in the U.S., with a population of 170,000 and dozens of foundries. Wealthy financiers lived upwind from the smokestacks then, in Doric-columned manses on Millionaire's Row. The mansions are still there.

You don't really apprehend how desolate Youngstown has become until you pull off the highway and begin navigating the potholes of Southern Boulevard. Here's a concrete-block convenience store with bars on the windows. On some streets nearby, up to 40 percent of the houses are vacant, and down the hill, 200 yards or so from the mayor's office, the brick, hangarlike Wean Steel plant stands vacant amid high, tawny grass. With a 13.7 percent unemployment rate and 3,500 vacant buildings, Youngstown is depressed, failed postindustrial America in distilled form.

Keep driving. Turn left onto the city's main drag, West Federal Street,―and then, eventually, you see something weird: a newish green awning, printed with shiny metal lettering. Youngstown Business Incubator, it says. Inside is a guy, Jim Cossler, who calls himself the incubator's "chief evangelist." Cossler is a scrappy fellow, 55 years old and sparely built, balding, with a habit of ducking out onto the street to furtively light cigarettes, his hands fluttering a bit as he cups the match in the wind.

Cossler has a rap about how Youngstown is perfectly suited to become a mecca for producers of business-to-business software. "When you buy software," he says, his voice a bit high and nasal, "do you ever turn over the box and say, 'I wonder where this was made?'You don't! Nobody cares where software is made. And you can make software in Youngstown, Ohio, inexpensively. You can hire a software programmer in Youngstown for $50,000, and that's a good salary.

Cossler has been the CEO of the Business Incubator since 1998. The State of Ohio now gives him $375,000 each year, and he uses the money exclusively to nurture tech-related companies. The YBI houses seven start-ups and gives the newer ones free rent, free utilities, and free Wi-Fi and phone service. It also gives guidance to nine companies that sit off-campus in greater Youngstown as they develop tech products. A framed photo outside Cossler's office, by the elevator, bespeaks the dream. It captures the original Microsoft team in 1978 -- a baby-faced, beak-nosed Bill Gates flanked by several furry-bearded hippies. At first, it registers as a little absurd.

But attached to the YBI building is a symbol of hope -- a brand-new 30,000-square-foot building in chrome and glass. This is the headquarters of Turning Technologies, which last year grossed $33.5 million making an audience response system used in academic settings and on shows like Who Wants to Be a Millionaire? Turning began in 2002, under Cossler's stewardship, in a small room at the incubator. Today, it has 173 employees, who work amid airy, high-ceilinged rooms with exposed brick walls and aluminum ductwork.

Cossler is especially proud that Turning stayed next door. "In most business incubators," he says, "when companies are successful, you graduate them, and then they move away and work in isolation. That's a horrible idea. We're open-source."

It's Cossler's hope that everyone on the Turning/Business Incubator campus can share ideas by, say, advising one another on how to display wares at a trade show, or participating in what he calls "your baby is ugly" meetings -- that is, candid product-review sessions. He wants Turning's triumph to rub off, and he wants to reverse a grim brain drain: For decades now, Youngstown's brightest youths have fled town. He wants to call home what he calls "the Youngstown diaspora," to sprout a cerebral local culture and a computer industry that can support 5,000 jobs on the YBI campus.

Cossler is by no means there yet. The seven companies that sit beside Turning in the incubator collectively boast 62 employees. They are reluctant to share revenue figures, but by Cossler's estimate, they grossed a total of about $3.5 million in 2009. Still, there are intimations of glory. Youngstown's U.S. representative, Tim Ryan, keeps an office inside the incubator. In the past seven years, he has secured more than $23 million in federal grants for tech projects involving YBI's portfolio companies.

Meanwhile, Cossler is scheming to expand the campus, which includes three buildings and 83,000 square feet. He gave me a tour, pointing first at a weathered brick warehouse -- Furnitureland of Youngstown, read the fading sign -- and then at an open pit alongside West Federal Street. "Here," he said, gazing down, "we're going to build a bocce court, or maybe a barbecue area where everyone on campus can mingle."

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