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Issue Date: December 2006 Issue


Tale of Tech

You could say it began a decade ago, with the arrival of people such as Tim Mueller and his company, VantageOne Communications. Some might say it started much earlier, with the first wave of industry that rumbled into this city and made it one of the biggest and brightest in the nation. And there are signs that it’s happening now, really. That, finally, the great minds of the past, present and future are converging here, in our very own city, to begin something even bigger and more far-reaching — a move to the upper echelons of techno-cities: the cities of the future.

By Joe Frey Photos By Eric Mull
Pull quotes:

Baunach likens what’s happening in Northeast Ohio today to a very complicated puzzle. “You put the edges in, and they fit together, and you start filling in and get a sense of what the puzzle looks like. You can feel it. The momentum is just building.”

The Intelligent Community Forum in January 2006 named Cleveland as one of seven cities in the world — and the only one in the United States — as a “Top 7 Intelligent Community,” meaning the city is a paragon for “vibrant local economies and healthy societies” in the high-speed Internet era.

History didn’t begin in 1995, and neither did Cleveland’s use of technology. But the exponential pace at which technology has advanced since then makes 1995 a good starting point to demonstrate where Cleveland’s modern technology community has been. And where it’s going.

That year, e-mail started creeping into everyday life, Netscape Navigator 1.0 was the Web browser and Tim Mueller, one of the “grandfathers” of Cleveland’s modern technology resurgence, was in the middle of a big upswing at Van-tageOne Communications that would land the firm he co-founded with Dan Rose in 1990 at No. 41 on 1999’s Weatherhead 100 list. It was one of the fastest growing companies in the region.

VantageOne was Cleveland’s first superstar Web-development firm, gaining national notoriety for its work with clients such as KeyCorp and Kelly Services. And although Mueller would sell VantageOne to FutureNext in 1999 — a deal rumored to be worth about $15 million — and move into public office as the chief development officer for the City of Cleveland, VantageOne gave those who were paying attention a glimpse of the economic power of technology: It creates jobs, wealth and growth.

Most in the business community — as well as the city at large — were more focused on the resurrection of the Indians than they were tech jobs in 1995. The Gateway complex (opened in 1994) was the new-new thing, and the Tribe was headed to its first World Series since 1954 — a time Cleveland actually dominated the national economic landscape.

“You could always see the smokestacks in the Flats or the port or the airport,” says Lev Gonick, Chief Information Officer at Case Western Reserve University and the brain behind OneCommunity (more on that later.) “Those are all the transportation systems of the industrial age. But if you can’t see [the technology], how do you get your head around it?”

Despite the lack of attention and the perceived arcana of it all, Cleveland’s granddaddies of tech were at work laying the foundation for today’s landscape. Ron Copfer of Fathom IT Solutions (née Copfer & Associates) was nine years into providing interactive marketing solutions such as electronic catalogs. King Hill founded DigiKnow LLC, now a power-house Web-development and interactive solutions firm. Ed Schnell formed InfoAccess.net in 1979. Gil Van Bokkelen co-founded Athersys, one of the most talked-about bioscience firms in Cleveland. Copernicus Therapeutics startedup after licensing technology from Case. And one of today’s crown jewels, Hyland Software, was chugging through an eight-year span that would see its sales increase by a dizzying 2,477 percent. There was a burgeoning but unconnected technology community in Cleveland.

Fast-forward a couple of years, and the scale and connectivity of Cleveland’s technology community was magnified. The Web exploded in popularity, and get-rich-quick-or-die-trying entrepreneurs and investors dumped truckloads of money at the doorsteps of any business that put “dot-com” after its name. Most of the fever-pitch activity happened on the coasts, which proved to be a double-edged sword for Northeast Ohio: The region didn’t experience the Millennium Force-like high, but also didn’t suffer the debilitating low after the dot-com bust.

The granddaddies continued to provide services to their clients with good success but little fanfare. It wasn’t until 1998, when the Northeast Ohio Software Association (NEOSA, pronounced nee-oh-suh) was founded, that Cleveland as a community began to take note of its technology companies and assets. NEOSA’s president, Jim Cookinham, was successful in sparking conversation within the business community and among the technology players in the region to the extent that by 2001, it was obvious to many that even with a small group of successful technology companies in the area, Northeast Ohio was in trouble.

Leaders in town had neglectedthe steady decline of the steel and other related manufacturing industries, and had effectively missed the boat on researching and developing new technologies here, which meant the region was losing jobs.

“The [leaders in the] region had been pretty focused, with blinders on most of the time,” says Dorothy Baunach, president and chief executive officer at NorTech, an economic-development group started in 1999 that is focused on making Northeast Ohio globally competitive. “We’re trying to teach these leaders to look forward.”

It’s working. A confluence of events — multiple conversations, fueled in no small part by The Plain Dealer’s Quiet Crisis series (begun in 2001), a renewed entrepreneurial spirit, technology-focused leaders in city and state government, and NorTech’s dogged approach to economic development in the region — is creating a rising tide.

Baunach likens what’s happening in Northeast Ohio today to a very complicated puzzle. “You put the edges in, and they fit together, and you start filling in and get a sense of what the puzzle looks like. You can feel it. The momentum is just building.”

While real-time statistics are scarce, Baunach points to the money that’s flowing out of economic development organizations as a key indicator of early success. JumpStart, founded in 2004, has made 22 investments in local companies, totaling about $5.5 million. Though the amount of capital invested is small, it’s local money that hadn’t been getting to local entrepreneurs before.

BioEnterprise Inc., founded in 2002, is creating an even greater impact. The organization aids local bioscience firms by providing everything from business-development planning to access to investors. The organization has helped more than 30 companies in Northeast Ohio since its inception, and those companies have garnered more than $300 million in financing. In 2005 alone, Cleveland-area bioscience firms received $171 million in investment capital — a level that puts Northeast Ohio on par with the Research Triangle in North Carolina and Minneapolis, two regions that have become nationally known as bioscience centers.

The message that Northeast Ohio is as good, or better, than other regions across the nation for technology-related ideas has gained real traction over the last year or so. The Intelligent Community Forum in January 2006 listed Cleveland as one of seven cities in the world — and the only one in the United States — that make up the “Top 7 Intelligent Communities,” meaning the city is a paragon for what the ICF calls “vibrant local economies and healthy societies” in the high-speed Internet era.

The international recognition is due in large part to Gonick’s tireless efforts. His idea of using the community-owned, fastest Internet connections in the world (located in Cleveland and the surrounding suburbs) to serve non-profits, businesses, schools and libraries has earned him respect both from within and abroad.

“The response in various international capitals has been, ‘How can we set up an operation in Cleveland?’” says Gonick. “We had 15 companies in the wireless space come to Cleveland just this fall, and at this point, six of those 15 have serious interest in getting a point of presence here.”
The locals are jumping on the virtual bandwagon, too.

“When we started, we had seven [member organizations],” Gonick says. “Today we have 300. We’ve gone from 56 megabits per second to 1.6 gigabits per second.” And Gonick estimates that half of Northeast Ohio’s public sector workforce — about 300,000 people — is connected to the Internet via OneCommunity’s high-speed lanes.

While Gonick is accelerating Cleveland’s adoption of uber-Internet connections, the businesses that started back in 1995 have continued to thrive. At press time, DigiKnow was slated to move from its offices on the Beachwood-Cleveland border into new digs in Midtown at East 36th Street and Superior Avenue by Nov. 6. The firm has continued to grow over the last 10 years, employing about 50 people in its Cleveland offices and about 10 in Argentina. Hill explains that one of DigiKnow’s former interns expressed a desire to open an office in his home country, presented a business case, and DigiKnow approved.

At least two dozen more technology-focused companies have moved downtown over the last 18 months, thanks to efforts by Cleveland’s tech czar, Michael DeAloia.

One such company, Easy2 Technologies, which provides online Flash-based tutorials for businesses such as Closetmaid, Moen and Lowe’s Home Improvement, has expanded its work force to 15 from four in little more than six years. John Bukovnik, a former Adcom Communications executive and president of Easy2, says business has been great, which facilitated the move from incubator space at BioEnterprise on Cedar Road to Playhouse Square in early 2005.

DeAloia’s even brought the future of technology to Playhouse Square in the form of software wunderkind Erhan Justice’s Bounty Technologies Inc. Smartly dressed in black suit and George Clooney haircut, this 18-year-old represents the next wave of talent to power Cleveland’s technology community into the middle of the 21st century. “This is a great city,” he says. “Look at all the great art and architecture. Why wouldn’t you want to be here?” Justice’s programming prowess landed him his first big project in Australia when he was just 16. Shortly before that, he and his father formed the company as a Delaware corporation, and now the transition to an Ohio corporation is under way.

Justice’s potential appears unlimited, and the future of other technology and life science companies in Northeast Ohio appears bright. To keep the ball rolling though, NorTech is looking for the next big wave of jobs that can further catapult Northeast Ohio into international economic prominence.

“The next oil is water,” asserts Chris Varley, vice president of innovation and communications at NorTech, citing potential water shortages the world over as evidence to his claim.

“We are sitting on the largest bodies of fresh water in the world. We have the technology and expertise in this region ... wouldn’t it make sense to have a Woods Hole of fresh water?” he muses, referring to the Massachusetts-based research institute focused on oceanic research.

Varley envisions a spate of new technology jobs focused on clean-water science, research and products that would enrich the area’s growing base. “We have the technology and expertise in this region,” he says.

There’s lots of gathering momentum around this idea, with local environmental and sustainability groups such as Entrepreneurs for Sustainability and EcoCity Cleveland joining the conversation.

In a world where history is cyclical, it seems fitting that the turbine sitting on the city’s front lawn may signal a return to an era in which technology, and specifically Lake Erie-inspired technology, drives the region.


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