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MAGNET Innovation Center
Update - February 2010
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Greetings!
The holidays end, you come back to work, and before you know it a month has passed. It's hard to believe it's already February, but there's no denying another page has turned on the calendar.
Throughout January I've been collecting Q4 stats from our incubator tenants. While the economy has affected some of our tenants, others have thrived. Overall, some fairly impressive numbers were reported, which I'll share in detail below.
I've also got some details on new incubation "starter packages" you might find interesting.
I'm looking forward to sharing even more updates and changes with you over the coming months. I hope your 2010 got off to a great start.
Dave Crain
dave.crain@magnetwork.org
216.432.5310
As always, if you know someone that would be interested in what we're doing here, use the "Forward to a Friend" button at the bottom of this E-Mail.
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2009 Results
We track our tenant's progress and performance in a variety of ways. As part of the State of Ohio's overall technology-based economic development agenda, revenue, investment, and jobs created are three very important metrics, and they are measured every quarter. Here is a snapshot of the aggregate Q4 and 2009 metrics for our tenant companies:
The end of the year brings an opportunity not only to review the quarter, but compare annual results to the prior year. While 2009 revenue and investment was down a bit, it held fairly steady versus 2008. The big difference was in jobs. Our tenant companies created 40 jobs in 2008 versus the 19 reported in 2009, a 50% drop. While much of this drop was tied to a rapidly-growing startup graduating out of the incubator, overall job growth was still weak throughout 2009. Q4 saw zero aggregate growth. I am still awaiting results from a handful of companies, but I don't expect their results to dramatically change the overall picture.
From talking with our tenants, it sounds like for the most part, the economy simply exaggerated whatever situation they were in. Businesses that had sluggish or slow sales, slowed down even more; but companies that had been experiencing a growth phase continued to accelerate. So while those accelerating companies continued to add some staff, additions were balanced by other companies paring down.
All that being said - I'm extremely proud of these results and the $10M+ economic impact the startups in the MAGNET Incubator had on the region throughout 2009. Based on activity just this month, I fully expect 2010 to be a good year.
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Incubation "Starter" Packages
One of the questions I ask just about every entrepreneur that is considering our incubator is whether the time is right for them, and how their company's development will benefit from participating in our program. Frankly, if all the entrepreneur gets out of tenancy in an incubator is "cheap rent", then they are probably better off somewhere else, or continuing to work out of their basement. It's the difference between being a landlord and a development partner.
That said - there are times when even very early stage companies can benefit from having a base of operations other than their living room. Access to meeting rooms, a professional environment, a central location right next to downtown Cleveland, and greater participation in the entrepreneurial community are all reasons I hear when entrepreneurs are looking for their first space.
Those first steps however, must be balanced against the need to preserve capital.
The MAGNET Incubator offers two ways for these early stage companies to establish a professional marketplace presence in a cost-effective manner:
- Space in our modular shared-office room.
- "Virtual" tenancy - the entrepreneur does not have a physical office in the incubator, but can use our mailing address and is given a mailbox.
Both options include full access to meeting rooms, the presentation and Board rooms, and a phone number with voicemail. The second option was added after being specifically requested by a couple area entrepreneurs.
If one of these options is of interest to you or an entrepreneur you know, give me a call.
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New Tenant
I was hoping to announce our newest tenant in this update; even holding off a few days to be able to make the announcement. Unfortunately, while the t's are crossed, there are a couple i's left to dot, so you'll just have to wait until next month!
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Like what you read here? Please consider forwarding our update to a friend who might also be interested, or joining our mailing list if the E-mail was forwarded to you. Our monthly E-Mails are a great way to stay up to date with us.
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