Area innovators called on to be more inclusive of minorities and women
Cincinnati better than some, but has room to grow
Ed Rigaud Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Ed Rigaud, founding CEO of the National Underground Railroad Freedom Center, accepting Great Living Cincinnatian Award in February 2013. Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Bob Coy Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Rod Robinson Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Rodney Swope Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Cintrifuse CEO Jeff Weedman Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
“We have not taken full advantage of the power of diversity in driving the innovative potential of our city. We have not yet learned how to be fully inclusive,” Rigaud told a gathering of Cincinnati’s most powerful business leaders at the Chamber’s annual dinner last month.
“We seem to be afraid to really remove the artificial barriers that would allow women and minorities to take part fully,” he said. “We still spend too much personal energy on negative issues of race and gender, and not enough on the creative power our differences can bring us. So I say to you tonight; Cincinnati, tear down that wall.”
Rigaud hopes the spark illuminates an issue that others have discussed privately: A lack of diversity in the region’s burgeoning “innovation ecosystem.”
Addressing the “regional gap”
The problem isn’t Cincinnati’s alone.
A 2012 report by Cleveland-based PolicyBridge found that blacks and Latinos combined own just 2 percent of all businesses in “technology-based growth industries” throughout Ohio. They own about 4 percent of such businesses nationwide.
The bigger issue, though, is that the region lacks a strong pipeline to funnel more minority entrepreneurs into those programs once the current crop of companies gets big enough to graduate, said Swope, who has been working to build that pipeline since becoming the MBA’s director last September.
The region’s innovation efforts have pumped tens of millions of dollars into startups in recent years.
“We have a wonderful and vibrant ecosystem for innovation and we need to help those, especially in the minority community, be more aware of it so they know they can take advantage of it,” he said.
“It’s unrealistic to think that a $200,000 business today could operate at a $2 million level overnight without active engagement,” Rugless said. “We have a regional innovation ecosystem where a lot of our time, money and attention is going to go to. And we have a large segment of our community that isn’t going to participate.”
Rugless said the African-American Chamber is seeking grants to fund a program for companies with $250,000 to $500,000 in annual revenue. It’s an attempt to build the pipeline of minority-owned firms that could benefit from the offerings of CincyTech, the Brandery, Cintrifuse and the MBA.
“Ed was right on target,” Rugless said of Rigaud’s Feb. 21 speech. “We have a regional gap that needs to be addressed.”
Impact of speech “hard to tell”
Rigaud said in a recent interview that he doesn’t believe any of the region’s incubator and accelerator programs are trying to exclude women and minorities. He just doesn’t think there’s enough focus on being inclusive.
Rigaud was honored by the chamber for his 36-year career at Procter & Gamble Co., the startup of the National Underground Railroad Freedom Center and an entrepreneurial career that includes ownership of Louisville-based automotive supplier, EnovaPremier LLC. He was one of four recipients of the prestigious award that night but the only one who carried a call to action.
He said Cincinnati is “on the cusp of reaching a great, new, high level of innovation and growth,” but was “missing an extremely important component” to success.
Read the full text of Riguard's speech:
Two weeks after the speech, Rigaud said it’s “hard to tell” what Cincinnati’s reaction was. Some praised his candor. Others congratulated him for the award, but haven’t talked to him “about the charge or the challenge or the content” of the speech.
“Then, there were some folks who normally would send me congratulations who didn’t. So, you just never know,” he said. “I haven’t gotten paranoid about it. Yet.”
Rigaud said he wasn’t just thinking about Cincinnati’s startup community when he wrote the speech, but he specifically called out CincyTech USA, the Brandery, Cintrifuse and Queen City Angels in his remarks because all are working to develop an innovation ecosystem for the region, a place where startups can gain advice, capital and access to customers. Rigaud believes
that diversity improves innovation, especially on the front end of product development, where startups – and their advisors – focus their time and energy.
“I’d certainly like to see Cintrifuse embrace the notion that we’re going to have a stronger innovation ecosystem if we bring in minority-owned and women-owned companies,” Rigaud said. “I was on the CBC task force (that led to the creation of Cintrifuse). I made the point that it didn’t look inclusive and we needed to take special steps to make it inclusive.
“Everyone nodded their heads,’’ he added, “But in the final report, as I recall, I don’t think there was specific language on making it inclusive.”
Startup community defends its diversity
Cintrifuse CEO Jeff Weedman said the regional hub for startups has demonstrated a commitment to inclusion by hiring women and minorities to run the organization and signing Lisnr, a startup founded by African-American entrepreneur Rodney Williams, as its first tenant.
“If actions speak louder than words then quit quoting me,” he said. “I have more women working for me than men. I didn’t set out to deliberately to do that. I set out to get the best people. I like my team. My team is pretty diverse.”
Brandery co-founder Dave Knox said 11 of the accelerator’s 26 graduates were women- or minority-owned companies, including five of 11 who attended the Over-the-Rhine program in 2012.
“Our entire startup community is at the beginning stages and that means we need to support anyone and everyone who wants to be an entrepreneur,” Knox said.
CincyTech President Bob Coy said Rigaud is “absolutely correct” that “diversity of perspectives is important to startups.”
CincyTech is a seed-stage investment fund whose 36 active portfolio companies include 11 that are women- or minority-owned. The group includes four African-American entrepreneurs, four of Asian ancestry and three female-owned companies.
Rod Robinson is one of them. His online supplier diversity service, called connXus, got a $40,000 grant from CincyTech in early 2011 that helped build on the company’s beta site. CincyTech has since invested a total of $350,000 in the company.
“We definitely wouldn’t be where we are now without that,” Robinson said. “We’ve been able to hire employees – a development team, an operations team – to first build a product and be able to deliver a product.”
But Robinson recognizes his company isn’t typical. And he thinks that’s partly a cultural difference.
When he left a good paying job as a CPA at Deloitte years ago to get his MBA at the prestigious Wharton School of the University of Pennsylvania – a move he considers his first step in becoming an entrepreneur – his parents didn’t react with pride or excitement.
“My family had never done that,” he said. “It was: ‘You’re leaving a good job? You’re not guaranteed a good job when you get out!’”
Robinson thinks that kind of caution is more common in black families than in white families. And, he said, raising money for a new company has been hard. But Robinson said he doesn’t think it’s been any harder for him than anyone else.
“At the end of the day, I think it’s all about relationships,” he said. “If you build relationships, and you’re in front of the right people, people are all about making money. If you’ve got a great idea and a great team to execute, they will invest in you.”
Work is beginning
Swope’s job now is to make sure more of the region’s aspiring minority entrepreneurs build those relationships and learn that resources and support is available to help them create new companies. He’s working with a number of local organizations through the Cincinnati Minority Business Collaborative . And he’s reaching out to minority technical associations related to medicine and engineering to spread the word to their members, too.
The work is critical, he said, to ensure that the region’s fast-growing industries include minority-owned businesses.
“As we look at the diversity of those companies now, there are very few minority-owned companies in those spaces,” he said. “So if that represents the economy of the future, and it’s not very diverse today, that means in the future there’s going to be even less diversity in the fastest-growing, job-creating industries.”
And that, he said, is why it’s so important to make sure there are minority-owned start-ups that can be nurtured and grown.
Coy said CincyTech chooses companies with the most growth potential, regardless of race or gender. But he also thinks Rigaud’s comments will resonate in the startup community and elsewhere.
“There were a heck of a lot of very influential people in that room,” Coy said. “Ed’s speech was very impactful and I don’t think it will be forgotten. I don’t know how, but it will probably have an impact in many small ways that collectively add to a big impact on the region.”
Copyright 2013 Scripps Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.