That the Rochester Region is not Silicon Valley and may not be as celebrated a tech startup hub as Boston or North Carolina’s Research Triangle Park can be a drawback when it comes to wooing businesses to the region or convincing young firms to set up shop here.
But panelists who spoke at the “How Rochester Can Become a Hub for Entrepreneurs” online event Thursday say the region’s relatively low profile—despite a being home to a well-developed high-tech “ecosystem”—is a hidden strength. The Rochester Beacon and NextCorps co-presented the event.
Speaking at the one-hour online forum were Luminate NY managing director Sujatha Ramanujan; Nish Sonwalkar, CEO of SunDensity Inc.; and Excell Partners Inc. chief operating officer Rami Katz.
Luminate NY is an accelerator that provides funding and support to optics, photonics and imaging startups like SunDensity, a Massachusetts Institute of Technology spinoff that relocated to Rochester from Boston after winning a $1 million investment. Excell runs a fund that has helped finance local startups and drawn companies to the region.
Like more widely celebrated high-tech hubs, the three panelists agree, the Rochester area offers plenty of tech-savvy talent to draw on for new hires whether it be Kodak or Xerox veterans or recent Rochester Institute of Technology or University of Rochester graduates.
“We’ve got the right infrastructure,” says Ramanujan, noting that the region is home to some 150 optics firms and as well as top-flight research institutions.
Excell is now in talks with an Israeli medical technology venture it hopes to lure here, Katz says. The Israeli firm is developing a multiple sclerosis treatment, and the fact a UR Medical Center researcher is one of the top MS experts in the world, if not the world’s top expert, is almost certain to clinch the deal, Katz says.
For firms looking for manufacturing space, disused but high-quality and well-maintained facilities that not long ago turned out product for Kodak or Xerox are available. Turnkey or close-to-ready facilities are a draw that other areas might be able to match. But not everyone can match the price.
In talks with another foreign venture looking for a U.S. location, Katz says, the official he was dealing with thought first of the New York City area and was dubious of locating a facility in Rochester.
When Katz threw out an estimate of a $15,000 cost to locate here, the official blanched.
“We can’t afford $15,000 a month,” he objected.
After Katz corrected the official, assuring him that his estimate was for a year’s cost and not a single month, the man’s color returned and the talks got more serious.
Becoming a top winner to score the $1 million Luminate NY investment had much to do with convincing SunDensity to locate here, Sonwalkar says. For early-stage companies that are not yet bringing revenue, “access to capital can be a problem.”
But the award was not the only consideration. For early-stage ventures, getting to the point where they are moving product out the door can be “a little bit of an uphill battle.” The Rochester region’s well-developed high-tech infrastructure can make that kind of move easier.
What type of ventures and startups should Rochester be looking to lure here?
Don’t waste a lot of time trying to get companies to move headquarters here, Ramanujan advises. Go for satellite operations like manufacturing that are more likely to provide local jobs. Look to recruit woman- and minority-run startups and development-stage ventures. Women and minorities are often overlooked by universities spinning off firms, she says. With the right kind of nurture, the payback can be bigger.
In addition to the area’s well-developed high-tech infrastructure, the Rochester region’s lack of a national reputation is perhaps one of its best recruiting advantages, Katz suggests. Amenities like affordable housing, cultural institutions, and nearby scenic Finger Lakes getaways offering plenty of recreational opportunities are highly valued.
“I never heard of Rochester, when I came here 20 years ago,” says the Israel-born Katz. “I thought I’d stay two weeks. I’ve been here 20 years now and now it would be hard to drag me out of here.”
Will Astor is Rochester Beacon senior writer.