Gene Cherner and Steve Fialko are long-time Chicagoans who found a big opportunity in a small place.
The two veterans of corporate America are working to launch CE Convergence, an online service company that helps professionals track their continuing education hours. And they are doing it with a helping hand from the Erie Technology Incubator (ETI), a center for tech start-ups located in Gannon University. It wasn’t that there weren’t incubators in their area; rather, none could top the one they checked out while visiting a friend in northwestern Pennsylvania.
“The Erie Technology Incubator had better opportunities, structure and support,” says Cherner, CEO of CE Convergence. He also cites ETI’s relationship with Ben Franklin Technology Partners, PA’s tech-based economic development program, and the “zero money” needed to join as impetuses behind he and Fialko’s decision to pass on four closer-to-home incubators and move to Erie last summer. The two immediately enrolled in the ETI, where CE Convergence and 19 other start-up companies receive guidance during stays that average 36 to 42 months.
The establishment of the ETI began back in 2001, when Erie’s Gannon University purchased property in the city’s downtown. Several ideas were floated on how to use the space, but Dr. Antoine M. Garibaldi, president of Gannon University, pushed to establish a technology-based business incubator as part of a key strategic initiative to benefit the community. A steering committee and feasibility study gave the idea a green light, and work soon got underway to secure state and federal funding and to conduct a national search for an executive director. From the latter process emerged Russell Combs, a candidate with 27 years of experience working with business incubators and a track record of launching three incubators in Virginia. He came on board in 2007, taking a year to attract $4 million in state funding, establish the ETI as a 501(c)(3) nonprofit and hire two full-time and one part-time employee before opening the ETI’s doors on October 3, 2008.
Any advanced technology startup company in the scientific, information or engineering fields can apply to be a client company within the ETI. Once accepted, the startup enters an incubation period that has three steps: an intake process that assesses the entrepreneur’s aptitude, attitude and product; a mentoring process; and finally, graduation. Clients are either ETI residents who work within the state-of-the-art 33,000-foot building or affiliates working offsite. All ETI clients receive mentoring that involves evaluating the start-up company’s weaknesses before pairing them with a mentor, often a retired executive volunteering his or her time, with expertise in that area.
“We have a tremendous group of over 65 individuals in our database who stepped up to the plate,” says Combs. “Their services are vital because these startups don’t have the cash flow to hire consultants.” The ETI typically pairs clients with two or three mentors over the course of their stay, tailoring the match over time to help these early-stage companies overcome new challenges as they arise during the incubation process.
Other assistance comes from the ETI’s partnership with Gannon University’s Small Business Development Center, which offers workshops, market research and planning, and help attracting investor capital and government funding. Sometimes, though, the best advice comes from fellow ETI clients.
“I started holding casual networking lunches once a month in which all the clients get together,” says Combs. “The price to attend is simply to share a success and a challenge with the group. Sometimes, clients develop a partnership through meeting at these lunches.”
Now two years old, the ETI operates with financial support from Gannon University, state and federal grants, Ben Franklin Technology Partners and rent and service fees. These funds support a diverse array of companies, some of which allow cell phones to redeem coupons, develop wind energy projects, improve health care through patient-centered physician coaching and more.
Combs predicts that the ETI will graduate between 35 and 50 companies that will each hire between 25 and 50 employees over the next 15 years. It is companies of this size, he explains, that are the heart of true economic development.
“Everyone wants big companies,” he says. “But when those big companies leave, it is hard for a community to recover.” This is not the case with technology companies. “Unless you are a Google, tech companies typically employ a maximum of 50 employees.”
Though federal law bars business incubators from contractually obligating their clients to remain in the city or town from which they launch, research shows that 84 percent of companies coming out of incubators nonetheless remain in those communities.
For their part, Cherner and Fialko believe they’ll stay put after CE Convergence graduates from the ETI in 2013. “We love it here,” says Cherner.
Amanda Prischak is an Erie-based freelance writer and part-time cheesemonger. She encourages everyone to visit the Gem City, so long as lake-effect snow’s not doing its thing. Send feedback here.
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Photos:
The CE Convergence team is Gene H. Cherner, CEO, left, and Steve R. Fialko, president and COO.
Cherner and Fialko at the main entrance to Erie Technology Incubator at Gannon University.
Cherner and Fialko with Karen A. Geier, Erie Technology Incubator Client Coordinator, far left, in the CE Convergence office..
All Photographs by Rob Engelhardt