How Remote Work Could Blow Up The Cincinnati Startup Scene

by Dec 18, 2018

How Remote Work Could Blow Up The Cincinnati Startup Scene

A few weeks ago I decided to attend an event at Cintrifuse where the new director of the incubator, Pete Blackshaw, was hosting a Q and A to answer questions about his vision for the start-up community and the city. While listening to his vision I couldn’t help but think about how remote work will disrupt so much about the way we do business today, and how it could reshape the city of Cincinnati.

If you are not from Cincinnati or have never heard of Cintrifuse before, no worries. Let me give you a brief explanation.

What is Cintrifuse

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Despite what you may think, my hometown of Cincinnati has a booming tech and entrepreneurship scene, and a lot of it has to do with the work Cintrifuse has been doing for the past decade. It’s located at Union Hall which is the epicenter of all things “startup” in Cincinnati and is the home of several other institutions including The Brandery – Cincinnati’s premier startup accelerator.

Cintrifuse is an incubator of sorts that does 3 very important things:

  1. It has put together a huge “fund of funds” (over $90 million at this point) that invests in cutting-edge venture capital funds with the goal of attracting those VCs attention (and their money) to the Cincinnati region.
  2. Provides entrepreneurs and new startups with the resources and mentoring they need in order to succeed.
  3. Connects the large companies (Big Cos) already located in Cincinnati with the innovation of the local startups which help them stay relevant in a constantly changing business world.

This is all done with one goal in mind, “to make Greater Cincinnati the #1 tech startup hub in the midwest and among the most attractive innovation hubs in the nation.”

Why Cincinnati Should be Attractive to Startups

There’s a lot that needs to go right in order for a startup (or any business for that matter) to succeed, but perhaps the two most important things that a location has to provide are:

  1. Lively community of other entrepreneurs and mentors
  2. A low cost of living

Thankfully Cincinnati has both.

For its size the city is home to some very large companies including Procter and Gamble, Kroger Co, and General Electric, just to name a few. This sort of Big Cos create plenty of opportunity for growing services startups in the area and also make it easy for entrepreneurs to find mentors.

The cost of living in Cincinnati is also a lot lower than other cities in the US. According to Numbeo the total cost of living for a single person is around $1,800 per month, which includes rent for a one bedroom apartment in the city center. This is compared to $4,370 in New York and $4,507 in San Francisco for similar living conditions.

This trend continues even when you leave the coasts and compare Cincinnati to other Midwest cities. Chicago is reported to be around $2,700, Detroit at $2,100, and nearby Indianapolis comes closest at about $2,010 for one person living in a one bedroom apartment in the city center.

As all entrepreneurs know every penny saved counts, so a low cost of living is of huge importance when you are just starting a business. So with these great benefits why isn’t Cincinnati a huge magnet for startups already?

The Problem With Cincinnati

Perhaps the most famous quote about Cincinnati comes from one of America’s favorite authors – Mark Twain, and it goes something like this:

“When the end of the world comes, I want to be in Cincinnati because it’s always 20 years behind the times.”

While there is good evidence to show that Mark Twain never actually said that about Cincinnati, it nonetheless holds some truth.

When I first moved to Cincinnati in 2004 I was 10 years old and a “fresh off the boat” immigrant from Bulgaria. All I knew about the United States was what I saw from TV and movies. Cincinnati then was not an exciting place to live. I remember there being nothing to do, an uninspiring city skyline, and just overall…”grayness”.

Unfortunately, that is still what people think of when Cincinnati comes to mind, despite the city having one of the most impressive resurgences I have seen from a city.

And I travel around the midwest a lot.

Cincinnati is home to so many great bars and restaurants that I can rarely recall them all, a ridiculous beer scene that would make even Denver blush, plenty of nearby outdoor activities, and now one of the best startup and tech hubs in the midwest.

However, Cincinnati has a branding problem that is left over from what it used to be 20 years ago. This has never been more evident than when Cincinnati lost a recent bid for the new Amazon HQ2.

Hundreds of cities across the country submitted bids to Amazon in hopes of being picked as the site of the new Amazon headquarters in many ways resembling a beauty pageant with the reward being a 50,000 job boost to the local economy. In the end Cincinnati was not chosen and the reported reason?

Lack of tech talent.

Even though the city was commended by the Amazon representatives of all the great work the city has done revitalizing the local communities and the high quality of life, it still lost because Cincinnati does not have a deep enough pool of tech talent.

Which begs the question, if Cincinnati is such a lovely and fun place to live that also won’t break the bank, what’s keeping the tech talent elsewhere?

Where is all the tech talent in Cincinnati?

cincinnati-tech-talent

The answer came to me at last week’s meeting with Pete Blackshaw which I mentioned at the beginning of this now lengthy post. Sitting behind me was a youthful looking Asian woman who oozed intelligence just with her presence.

After some conversation, she revealed that she had made her career in the video game industry working for tons of industry leaders like Lucasarts before launching a startup with her partner focused on innovating advertising in video games and the eSports industry…I told you, she was smart.

One thing she said though really caught my attention. She explained how difficult it was for her (an amazing tech talent) to leave the comfort of the West Coast where there are tons of tech companies, with tons of job openings.

If her startup failed there, she could just walk down the street to any one of a hundred companies and she could easily find a job. In Cincinnati she said, it was different. The type of companies where her talent would be valued were few if any, and that was scary.

I fully understand where she was coming from, sometimes it’s just as bad to be overqualified and not find a job to match your skills, as it is to be underqualified.

On the West Coast, she would have plenty of opportunities to continue using her skills working on awesome projects. If she was pressed to find a job to match her skills in Cincinnati I’ll guess that she could find 1 maybe 2 small companies that could offer her that, but that’s it.

However, with my background and experience, one of my first thoughts was “why can’t you still work for those tech companies on the West Coast while living in Cincinnati?”

As our understanding of remote work and experience with managing remote teams continues to improve this should be a non-issue. People like this woman should have no problem scoring a great job in Los Angeles while living in Cincinnati, or anywhere else for that matter.

I think this is where Cincinnati has a huge potential that it has not yet recognized.

Amazon told the city of Cincinnati that its problem is a lack of tech talent, and the tech talent is telling Cincinnati that its problem is a lack of job opportunities. It’s a sort of Catch-22 that unfortunately, the local economy is banking on.

Cincinnati’s solution, spearheaded by Cintrifuse and other similar local organizations, has been to attract and help foster the creation of startups which in turn bring opportunities. I think this is a great idea and one that will work in the long term, but if we seriously invest in perfecting and mastering remote work we could further pour gasoline on the fire.

Tech talent could comfortably move to a city like Cincinnati and enjoy a great quality of life at a much lower cost while still working at companies located on one of the coasts. This would then increase the tech talent in the city.

Similarly, if someone decides to launch a startup they could confidently do so from a city like Cincinnati knowing that if it doesn’t work out, they don’t have to rely on the local job market but could lean on a remote working engagement with a company located elsewhere.

From my viewpoint, there is no way that this doesn’t become a reality eventually. More and more companies are utilizing remote work agreements in order to fill key talent positions, especially in the tech industry. As telecommunication technology and AR and VR continue to improve this will only take hold in more industries.

What I think needs to happen is for the city of Cincinnati to take a stand as a sanctuary city for remote workers. Come live and play here and work elsewhere if needed.

The great thing is that doesn’t have to remain the case, and those that come to live in Cincinnati could easily go on to start companies here later on thanks to new connections they’ve made with other local talent.

The same way that Cleveland recently branded itself as Blockland and has begun attracting innovators in the blockchain field, Cincinnati could do the same and attract tech talent that is sick of paying ridiculous amounts of money for a mediocre quality of life.

Just look to the thousands of people that have done exactly that over the last 10 years and joined the digital nomad movement for evidence of this frustration.

In the end I think the future of Cincinnati and other cities like it is bright. More and more people looking to start businesses are beginning to realize that the benefits of launching a startup in a hub like New York or San Francisco do not outweigh the cons, and they are looking for new options.

Creating the infrastructure to support those new entrepreneurs and their businesses is huge, but we could move forward a lot quicker if we also answer their fears.

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