New Magnet support group targeting entrepreneurs

By DAN SHINGLER 4:30 am, March 12, 2012

Some newly minted college graduates and perhaps students reaching the end of their academic careers soon will have a place to hang out, network with one another, get on the Internet and, with some luck, form some of Northeast Ohio’s next successful businesses. And it all can happen at a special incubator built and maintained just for them. The manufacturing support group Magnet is starting the project this spring. Dubbed “The Beta Space,” its purpose is to help would-be entrepreneurs by allowing them to network more easily with each other, as well as with seasoned business professionals, said David Crain, director of entrepreneurial services for Magnet. The Beta Space will be aimed at young entrepreneurs who have an idea for a business that involves manufacturing or engineering, Mr. Crain said. Because they’ll be at Magnet’s main site near downtown Cleveland, they’ll have access to engineers, designers and other product development specialists that Magnet already uses as consultants to area manufacturers, Mr. Crain said. “They’ll be in a facility where all we do is help people make stuff, and they’ll have access to all of that,” he said. In addition, Magnet is signing up service providers — lawyers, accountants and experts in marketing and finance — who will staff a group of three offices at The Beta Space on a rotating schedule. They’ll provide free services and general counseling not only to the young entrepreneurs, but also to other manufacturing- related businesses in the area, Mr. Crain said. “I’m signing up service providers that will be in one to four days a month,” Mr. Crain said. The entire project is financed with about $20,000 in local contributions, including a $10,000 grant from the Burton D. Morgan Foundation, Mr. Crain said. That money will outfit the approximately 2,000-square-foot room with office furniture, desks, Internet, phone connections and most of what the entrepreneurs will need to work, aside from their own computers. Mr. Crain said he already has signed up his first couple entrepreneurs and is building out the space with plans to open it in late April or early May. The Hudson-based Morgan Foundation, named after the late local entrepreneurial advocate Burt Morgan, “believes networking and building connections are important elements of successful entrepreneurial activity and that the beta space is designed to achieve that goal,” foundation president Deborah Hoover said. “We’re particularly interested in ensuring that young entrepreneurs have the opportunity to connect and we’re working to promote the availability of the space among the collegiate programs that we support,” she said.


Stanford Study Proves Effectiveness of Telecommuting

February 9, 2012

QuantcastStanford University has completed a large study to determine whether telecommuting increases efficiency and satisfaction among employees, among other things. The study looked at a travel agency call center in China with 12,000 employees over a nine-month period. Using employees from the airfare and hotel divisions, 255 employees worked at home four days a week for nine months.

In that time, the researchers found four main results:

1. The performance of the home workers went up dramatically, increasing by 12% over the nine-month experiment. This improvement came mainly from an 8.5% increase in the number of minutes they worked during their shifts (they were logged in to the computer system). This was due to a reduction in breaks and sick days taken by the home workers. The remaining 3.5% improvement was because home workers were more productive per minute worked, due to the quieter working conditions at home.

2. There were no spillovers on to the rest of the group – interestingly, those remaining in the office had no change in performance.

3. Attrition fell sharply among the home workers, dropping by almost 50% versus the control group. Home workers also reported substantially higher work satisfaction and attitudinal survey outcomes.

4. At the end of the experiment the firm was so impressed by the impact of telecommuting that they decided to roll the option out to the entire firm, allowing the treatment and control groups to re-choose their working arrangements.

What it costs to run a coworking space

Sunday, February 5, 2012

Tom Brandt is a web developer living and working in Ann Arbor, Michigan. He is the owner and president of Northtech Systems, Inc., a web apps development company primarily working in Ruby on Rails. He is also one of the maintainers of Workantile, a coworking community in downtown Ann Arbor.

There has been some chatter on the global coworking Google group about the costs to start and run a coworking space. Alex Hillman of IndyHall discussed it on his blog, and I thought I would talk about Workantile here.

Workantile leases about 3,200 square feet on Main Street in downtown Ann Arbor. It is on the ground floor in a former retail space, and our rent reflects that at almost $25/square foot. This by far our biggest expense.

Our monthly expenses are:

Rent: $6,600 Internet: $190 Insurance: $111 Supplies: $50 Professional fees (CPA): $33 Total: $6,984

We have two internet connections, one from Comcast and one from AT&T. Both are 18mbps. The Comcast connection costs $95/month, the AT&T $85/month. They are connected to a bespoke dual-WAN router with load-balancing and failover. Now that the kinks have been worked out of this arrangement, we never have a problem with internet connectivity.

The insurance is paid quarterly and CPA yearly, but for budgeting purposes this is what it costs per month.

Credit card processing fees ran around $200 in January. This is a variable cost, of course, as our membership grows this will go up. All members are billed monthly through our credit card processor, Stripe. Stripe is extremely easy to work with. Their recurring or subscription processing is set up really well, it is easy to integrate it with your own billing system, their reporting is excellent, and their charges reasonable and completely transparent. We used in the past and will never go back.

For card-present charges, such as day passes or trial memberships, we use Square. Square is easy to set up and use.

We run a lean operation. We have no receptionist, instead the members take turns answering the door and giving tours. The members also clean the place, taking out the trash, cleaning the sink and toilet, and tidying up when necessary. Every second Sunday we have a general clean-up day where members come in, vacuum and mop the floors, wash windows, tables and chairs, scrub the bathroom, and clean out the fridge.

Trek Glowacki, Dave Nelson, Bill Tozier and I split management and administrative duties, which saves on office manager expenses. The fact that members are billed monthly automatically eliminates that administrative hassle.

I can’t speak to the cost of starting a coworking space, since we acquired Workantile from its previous owner.

The 15 Coolest Offices In Tech: Google Pittsburgh Office Tour

google pittsburgh


While the Googleplex in Mountain View, CA  gets a ton of press, there’s an equally-cool Google shop set up in Pittsburgh,  PA.

Complete with massive hammocks and terraces, local architecture firm Strada  designed one of our favorite tech  offices.

Read more:

LaunchHouse duo aims to cultivate a new generation of job creators

Published: Saturday, January 07, 2012,  6:00 PM     Updated: Monday, January 09, 2012,  8:13 AM

LAUNCH_HOUSE_FOUNDERS_11909209.JPGLisa DeJong, The Plain DealerDar Caldwell, left, and Todd Goldstein, founders of Shaker LaunchHouse, say they hope to nurture a start-up culture to help Cleveland keep its innovative young professionals.

CLEVELAND, Ohio — The lecture title no doubt helped draw the throng to Shaker LaunchHouse on a cold and rainy November night. “Launching a Billion Dollar Company: The Story of OfficeMax.”

More striking than the size of the crowd was its youthfulness. Young professionals, college students and even some high schoolers filled more than 300 folding chairs arrayed across what was once the service garage of a car dealership.

They came to hear local businessman Bob Hurwitz describe how he built from scratch a chain of office superstores. First, Todd Goldstein, the 29-year-old co-founder of LaunchHouse, reminded everyone why that mattered.

Standing before the audience dressed in the uniform of the tribe — blue blazer over a white collared shirt and blue jeans — Goldstein stated the obvious.

“Billion-dollar companies are not coming to Cleveland,” he said.

Then he stated the not-so-obvious.

“And the next great idea may be in this room tonight.”

The appreciative murmur that swept the crowd was further evidence that Goldstein and his friend and business partner, Darragh “Dar” Caldwell, also 29, know well the passions of their peers. They have spent much of their young adulthood steering youthful zeal into business acumen, a quest they see as critical to the city they love.

The new economy is built on innovation and if Cleveland wants to join it, the founders of LaunchHouse argue, it needs the techies and tinkerers who hear a different drummer. It needs the next generation of job creators.

Their hip and youthful business incubator has not yet spawned a company like OfficeMax. But it has become the home to dreamers who might have gone elsewhere. Many see a powerful new economic development stream coursing just outside the mainstream.

Opened in May with the support of Shaker Heights, the region’s most casual business accelerator has quickly gained followers. LaunchHouse is home to about 90 young companies, ranging from animators to energy-bar makers to designers of cloud computer systems. Some of those startups are partly owned by LaunchHouse, which invests in ideas it deems promising.

LaunchHouse draws growing crowds to its networking events and product showcases. It has also displayed an ability to attract cash, bringing in enough revenue to cover its costs. Meanwhile, the incubator has invested $130,582 in 30 companies. That investment, in turn, has attracted $1.8 million in follow-up funding, the partners say.

This month, they expect to celebrate a seminal moment, the first LaunchHouse-launched company bought by outside investors.

The business outlook is encouraging, Caldwell and Goldstein say, but they take more pride in setting the stage. Their dream, they said, was to build something wholly new to Cleveland: an ecosystem that nurtures young entrepreneurs.

Coffee is free, along with advice

To step into LaunchHouse is to enter a dynamic new business environment. It’s a bright, 24-hour world of laptops, smartphones, iPods and whiteboards; sort of a cross between a college dorm and the Union Club. Twentysomethings with backpacks flow in and out of the door, as do their mentors, briefcase-bearing retirees.

Rent is a low $100 a month for a work space, $500 for an office, $15 for a day pass. Coffee is free. So is the advice, which comes from all directions.

“We’re really building a community and a culture where people connect with each other,” says Goldstein, whose earnestness is amplified by a baritone voice. His grandfather, Buddy Spitz, ran the networking hotspot of a previous era, the legendary Theatrical Restaurant downtown. Now the grandson is carrying on the family tradition of social catalyst, offering coffee and energy bars instead of scotch and sirloin.

“The whole idea is to put these entrepreneurs in front of a range of people who can drive their business forward,” Goldstein said.

Then give them a push.

“We like people to fail quickly,” he added. “So they can get started on the next idea.”

Caldwell, an Ivy League graduate with a trace of his mother’s Irish brogue, said he wanted to replicate some of the vibe he witnessed in Silicon Valley. He suggests stopping by LaunchHouse at 2 a.m., when the lights still burn bright.

“And some people are jamming away on code. And the place is packed. It’s just a beautiful feeling,” he said. “That wasn’t happening enough in Cleveland.”

To his credit, it’s happening now. But to what end? Can LaunchHouse, and incubators like it, create wealth and jobs?

Scott Shane, a professor of entrepreneurial studies at Case Western Reserve University, is skeptical. Entrepreneurship is a tough way to generate jobs because most startups fail or never employ many workers, he said.

“People have this myth in their mind that one of them will be the next Google,” Shane said. “Lightning can strike anywhere. But the chances of that happening at LaunchHouse are not good.”

Still, you can’t win if you don’t play the game, he acknowledges. And jobs are not the only payoff.

Shaker Heights mayor pleased with results

The former Zalud Oldsmobile dealership was 23,000 square feet of emptiness on busy Lee Road, near Chagrin Boulevard, when Goldstein pitched his idea to Shaker Heights Mayor Earl Leiken in 2010. He and Caldwell had a track record and a problem.

Their business address, the old Brunswick Florist building on Carnegie Avenue in Cleveland, was being razed for a parking lot. They needed to relaunch.

Leiken envisioned young professionals with lunch budgets, foot traffic in a major retail district, an infusion of cool. His city spent $500,000 renovating the dealership and handed the keys to Goldstein and Caldwell rent-free for four years. In exchange, Shaker gains a small equity stake in LaunchHouse companies. And something more.

“It’s been a terrific addition to the surrounding neighborhood,” the mayor said, noting that some of Shaker’s home-based business owners are now LaunchHouse regulars. “And it really strengthens our image as an entrepreneurial community.”

On a recent weekday morning, the former showroom stirred with about 20 people, some working in pairs, some talking at tables, many — like Mickie Rinehart — sitting alone behind a laptop.

Rinehart, 44, started her line of beer flavors, Hops Drops, last summer after being laid off from her job as an administrator for a non-profit education agency.

“I just pitched this morning [to potential investors],” the Lakewood woman said breezily, still pumped. “I had to decompress. So I had to come and be among entrepreneurs.”

James Gifford, a 15-year-old home-schooled tech wiz, was talking computer code with Dan Robinson, a weathered 49-year-old who has an idea for building wind turbines from junk.

Katen Pabley, the 39-year-old chief executive officer of Good Greens Nutrition Bars, walked by in a suit. He paused and opened his laptop to show a clever, animated video promoting his product. It was created by another LaunchHouse tenant, Tiny Giant Studio, led by Dave Fleischer, a former teacher of animation at the Cleveland Institute of Art.

“We had no idea you could do this,” Pabley said.

Friends, partners, change agents

Goldstein and Caldwell began sparking that kind of collaboration four years ago, soon after coming home from college. Caldwell, who grew up in Bainbridge and graduated from Cornell University, was working as a landscape architect. Goldstein, a Lyndhurst native who studied finance at Rhode Island’s Johnson & Wales University, was running a real estate investment firm.

They met on a rehabilitation job and, over beers, lamented the state of their hometown. All of their friends seemed to be leaving for startup-friendly cities. They saw a need to help young innovators find some love in C-town.

“We’re kind of obsessed with Cleveland,” said Caldwell, who lives the single guy’s life in Shaker Heights, sharing an apartment with other young entrepreneurs. “We love it here. We wanted to raise kids in a world-class city. But it’s not quite that, yet.”

In 2008, they started Goldstein Caldwell & Associates above a pizza parlor in University Heights and established their business model as early-seed venture capitalists. Typically, they make modest investments in promising ideas, surround the founders with seasoned advisers, and push them to bring a product to market. They’re aim, they say, is to raise a fledgling company to the next level or attract a buyer who can.

They hit a nerve. Networking crowds spilled onto the sidewalk. They moved to the roomy Brunswick Florist building, attracted more investment, and caught the eye of established economic-development specialists.

“They did it all by themselves, that’s what’s amazing,” said Baiju Shah, CEO of BioEnterprise, a nonprofit agency focused on growing the region’s biomedical economy. “There’s only a couple others like them, who are just jumping in and doing it.”

Last year, the duo became a trio when Sam Krichevsky, also 29, quit his job running a nursing home and joined LaunchHouse as its third managing partner.

Krichevsky, a Pittsburgh transplant, said he believes in the model and is eager to see it grow.

The partners, who run the place with seven paid employees, plan to expand the cubicle ranks into the old service bays to squeeze in 10 more companies. Plans are in the works for a LaunchHouse Institute, which would teach business skills to rookie CEOs.

Meanwhile, the larger, original goal still guides the mission.

Just before it opened last spring, Shaker LaunchHouse hosted an international delegation from Serbia. The educators and business leaders from Belgrade were interested in nation building. They said they needed ideas for shaping a society that could keep its best and brightest.

In a former auto showroom in Shaker Heights, they met a young man who understood completely.

“Typically here, kids graduate from college and don’t come back,” Goldstein told the group, as eyebrows arched and heads nodded in recognition. “We want to give them a reason to come back home and stay.”

The Beginning of the End of the 9-to-5 Workday?

Time.comBy DAN SCHAWBEL | – Wed, Dec 21, 2011

The traditional eight-hour workday may soon be the exception rather than the rule. New evidence shows that we’re reaching a tipping point in terms of workplace flexibility, with businesses seeing the wisdom of allowing employees  —  young employees especially  —  to work odd hours, telecommute, and otherwise tweak the usual 9-to-5 grind.

One of the top 12 trends for 2012 as named by the communications firm Euro RSCG Worldwide is that employees in the Gen-Y or “millennial” demographic  —  those born between roughly 1982 and 1993  —  are overturning the traditional workday.

The Business and Professional Women’s Foundation estimates that by 2025, 75% of the global workforce will be Gen-Y. As early as next year, this group of younger Americans will already comprise 60% of the employees at companies such as Ernst & Young. And increasingly, companies creating workplace flexibility programs because it makes good business sense, not in the least because that’s what their employees demand.

Gen-Y is spearheading this change because they don’t want the same work environment their parents had. Between new technology and global workplace dynamics, companies are implementing flexible work arrangements for everyone, inclusive of Gen-Y. A recent Vodafone UK survey illustrates that 90 percent of employers enable work flexibility instead of sticking to traditional hours.

Leading the charge in the shift toward allowing employees to work anywhere around the world, at any time they want, are companies such as Ernst & Young, Aflac, and MITRE, which realize that they need to accommodate employees’ personal lives if they want to retain them. “This notion of an eight-hour day is rapidly disappearing simply because we work so virtually and globally,” says Maryella Gockel, Ernst & Young’s flexibility strategy leader. By understanding Gen-Y’s need for workplace flexibility, companies are better able to recruit and grow young talent for the future.

Aside from early adopters of workplace flexibility programs, many other companies are hesitant because of the traditional “command and control” approach laid out for older generations. The challenge these companies face is letting go and trusting their young employees  —  even when they are telecommuting or using Facebook regularly at work.

Many companies fear that, without structure, employees will be distracted, not as engaged and less productive. In fact, the opposite is often true. A trusting work environment breeds more loyal employees and increases efficiency. Here are three reasons why successful companies will embrace workplace flexibility programs:

1. Gen-Y workers won’t accept jobs where they can’t access Facebook. Cisco’s “Connected World Technology Report” shows that more than half of Gen-Y employees prioritize social media freedom over a higher salary when evaluating a job offer. Furthermore, more than half of them say that the Internet is an integral part of their lives. Gen-Y wants to be connected to their friends and families, not just their co-workers, throughout the day. Although some companies ban social media at work, other companies have embraced it as long as employees are using it professionally. “We do want people to use social networks in order to keep in touch with their colleagues and contacts,” explains Gockel, whose company has no formal social media guidelines or policies.

2. Gen-Y values workplace flexibility over more money. More than one-third (37 percent) of Gen-Y workers would take a pay cut if it meant more flexibility on the job, reports a study by Mom Corps. Flexibility motivates Gen-Y workers to be more productive and loyal to their companies because they feel like they are respected. An employer that allows flexibility in the workplace also demonstrates that it understands the evolving modern-day work environment, which bodes well for the future.

3. Gen-Y workers are always connected to jobs through technology. Technology has made the traditional nine-to-five model blurry  —  for all workers, of all generations, really. No one is ever out of touch, or off the clock. When workers go home, they are still “working” because who they are personally and professionally are becoming one in the same and interconnected. Workers are always representing the company, and more and more, it seems, that work email doesn’t stop for anything or anyone. By no means does time away from the office equate to less work getting done.

>Dan Schawbel is the Managing Partner of Millennial Branding, LLC, a full-service personal branding agency. Dan is the author of Me 2.0: 4 Steps to Building Your Future, the founder of the Personal Branding Blog, and publisher of Personal Branding Magazine.

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From Global Workspace Association blog:

Posted by obcadmin in Blog Posts, General  on  June 1st, 2011

By Andrea Pirrotti Founder & CEO of Pirrotti Marketing Group LLC 30 million white-collar knowledge workers are conducting business from a third place (an environment separate from home and the workplace), and that number is expected to grow 10% annually (USA Today). In a 2010 study conducted by IDC, the IT research firm projected that by 2013 the total number of office-based, non-office-based and home-based mobile workers will grow to nearly 1.2 billion people representing more than a third of the world’s workforce.

Look around at the people who are sitting in your offices.  Are these folks really going to use McDonalds as a place to work?  Can anyone really conduct business while kids are running around and screaming in the McDonalds indoor playground?  Would any professional want to risk smelling like oil, burgers and fries for the rest of the day?

There are other 3rd Place options out there.  Let’s consider Starbucks. Clearly this environment is much closer to enabling the mobile worker to get work done.  I work from Starbucks from time to time.  In fact the other day I was in-between meetings and stopped into Starbucks to work.  I pulled out my laptop (an iPAD is on my list of things to buy) and started to put the finishing touches on a marketing strategy that I needed to deliver to a client by the end of the week.  I confess, I was totally distracted by the two women who were sitting next to me chatting about their kids and weekend plans. Then my client called me on my cell phone, and at the very same time the barista started to foam milk.  I could not hear a word my client was saying.  And, I really couldn’t talk to him because of confidentially concerns.  Is Starbucks an environment that enables work?  Kind of.  Did it enhance my productivity?  No.