Why our Tech Startup is Based in Akron, Ohio

Why our Tech Startup is Based in Akron, Ohio

Here's the original link to this post on LinkedIn: here.

I write this sitting in my office, located in the corner of a 100 year old former rubber factory. The pipes behind me are clanking, it's early October and the steam heat just got turned on - there will be lots of clanking this season, as there was last year, and the year before that when we first moved in. Outside the window are the twin smokestacks emblazoned with Goodrich down the sides, one with a hint of smoke coming out now that the furnace is lit.

In their heyday, these smokestacks and the furnace below supplied steam and electricity to a complex larger than an entire city - a group of 90 buildings that had 75 acres of floor space with over 15,000 workers. This was the headquarters of BF Goodrich - and the site of the largest rubber factory in the world. And sites this massive were the norm for Akron - across town to the east is the headquarters and factories of Goodyear Tire, less than a mile south was Firestone, and General Tire slightly to the north. Akron was the fastest growing city in the US during the teens and 20's - it was the rubber capital of the world.

The exodus of rubber started before I was born, and by the time I was in grade school in the early 80's, there were no tires being made here anymore. The old factories were being torn down - downtown was boarded up, unemployment was high, and the future looked bleak.

This is the Akron in which I was raised.

"Hardware is Hard" - Marc Andreessen

About five years after I graduated from college, I ended up at a job that had me travel.

A lot.

Not only all over the US, but around the world - 17 countries in all, many multiple times. And during this time I got bitten by the entrepreneur bug, and started visiting the startup scene in all these difference places. Singapore, Japan, China, the UK, most of western Europe. And quite a bit of time in the US startup centers - Boston, Chicago, New York, and of course, the Valley. I talked and met with a number of great people, who were starting and working on cool stuff, talking about their latest pitch, how their latest new idea was the next big thing, and how they were going to exit with boatloads of money in a few years.

As great as all of these places were for launching a startup, there seemed to be a common theme with the people I met and the ideas that I heard. Some of the ideas were frivolous, others were get rich quick type ideas (we'll do this quick app and get bought up by Google in months...), or was a rip-off of a great idea that's already implemented ("It's like Uber and AirBnB rolled into one, but better!"). These weren't the places for us.

If you go to any startup networking event and say you are going to launch a hardware company, most people will look at you oddly. "It takes a lot of money to do hardware", "it doesn't scale well", "you'll need to hire lots of people". Then they will inevitably say, "Hardware is hard". I've heard this phrase more times than I can remember, namely in San Francisco and New York.

I've never heard it in Akron.

The Hard Way on Purpose

David Giffels, life long Akron resident and author, just this year released a book called "The Hard Way on Purpose - Essays and Dispatches from the Rust Belt". In the book, Giffels recounts stories from his youth in Akron, and says that he's spent his whole life watching people leave. It's a common theme across the industrial Midwest, where jobs are few and people pack up for greener pastures. Those that remain are forced to work harder, faced with constant struggle, and always have to overcome challenges.

They are the perfect people for a startup.

"If there is no struggle, there is no progress." - Frederick Douglas

A funny thing happens when everyone is forced to struggle and overcome challenges. They come out the other side stronger and better for it. The Akron of my youth gave rise to the multiple Grammy winning Black Keys, one of the hardest working bands in the business, and to Lebron James, arguably the best basketball player playing the game today, if not ever. Lebron says what everyone from Akron already knows, "In Northeast Ohio, nothing is given. Everything is earned. You work for what you have."

When people visit Northeast Ohio now, most are expecting a run down post industrial wasteland, yet are very surprised to find the opposite. We're years into a major renaissance in Northeast Ohio that's transforming both Cleveland and Akron. Downtown Akron is no longer boarded up, but a vibrant city center that is teeming with people, restaurants, and music. The young people that used to move away when they graduated college are staying, and most remarkably, people that moved away years ago are coming back.

The startup scene in Northeast Ohio is bustling as well. But it's a bit different than the startup scenes along the coasts, and the ideas are a bit more grounded in reality. Hardware isn't a dirty word here - Shaker Launchhouse - a Cleveland based startup incubator, just launched a Hardware accelerator for 10 early stage hardware companies with investment, mentorship, office space and access to key resources from our region.

We like to build things, it's what our grandparents did, and what we do best.

"Frugality drives innovation…" - Jeff Bezos

When I talked to people who live on the coasts about the rent for our office space, they gasp. I'm not joking, in two instances there was a literal jaw drop and audible gasp. Northeast Ohio has one of the lowest costs of living in the US, and that definitely translates to office space as well. We occupy a 5000 sq ft office in downtown Akron, a mix of industrial space and finished office space - which is walking distance to all the downtown restaurants, bars and events. A hiking / biking trail next to our office leads into a National Park 5 miles away. And our monthly rent is less than one third that of a 700 sq ft studio apartment in the Bay Area. We could literally afford 15 thousand square feet of office space for what one person in San Francisco pays to live in a tiny apartment.

Labor rates are lower here as well, but even so our assembly techs are able to make a salary that affords them better housing here than degreed engineers can afford in the Valley.

This lets us do something that most other startups would never dream of. We manufacture our own products.

Electronic products.

In the United States, not in China.

It isn't easy, and has taken an incredible amount of hard work to get running smoothly, but it's been worth it.

And most surprisingly, our costs are lower than if we went overseas. This is thanks to the use of automation for the majority of the high speed electronics production, and low labor rates that we can hire qualified, hardworking people to run the machines and do the manual assembly work.

This isn't possible to do in Silicon Valley.

“Fawkes is a phoenix, Harry. Phoenixes burst into flame when it is time for them to die and are reborn from the ashes.” - J.K. Rowling, Harry Potter and the Chamber of Secrets

When Goodrich moved out in the 1980's downtown Akron was desolate, this complex was deserted and was planned to be demolished. But some dreamed of a brighter future and saved it from the wrecking ball.

Its dark out now, I'm the only left at the office and the steam is gently warming up the room. Tomorrow is another day, another challenge, another hurdle to get over. We're still a small startup, success is far from guaranteed. But I get comfort looking through the window, out at the rest of this old rubber factory that now houses over 100 companies - many startups like us.

The former fastest growing city in the US has been reborn, stronger, better and more resilient than ever.

Why is our tech startup based in Akron, Ohio? Because there is no place better.

Ken Burns - Founder, TinyCircuits