Upstate Venture Connect, a nonprofit organization dedicated to accelerating upstate New York’s entrepreneurial ecosystem, was selected as one of the recipients of the second annual Innovation Ecosystem Awards to be presented at the 2015 Global Innovation Summit in San Jose, California Feb. 17-19.

Organizers of the summit’s “Rainforest Recognitions” program said they selected Upstate Venture Connect as an award winner, because it “catalyzes the ideals of connectivity, diversity, openness, and trust that are essential to the innovation process” …  and embodies “the ideals of an innovation ecosystem.”

CANTON — Anyone who has tinkered under the hood of a car knows that the technology in automobiles has advanced greatly, so it only makes sense that the technology involved in selling those cars has progressed as well.

Those advancements have helped create a successful business at Frazer Computing, Inc. Michael Frazer, company president, started the firm from his Atlanta, Georgia home about 30 years ago with a software program he wrote for one used-car dealer. Initially, Frazer provided software services for other types of clients, but the used-automobile software side of the business continued to grow. In 2001, Frazer Computing began to focus full time on serving the auto industry, and, during that same year, relocated to Canton, New York.

Located at 6196 State Route 11, the business has continued to grow as its software has become an invaluable tool for dealers.

“It’s really software they need to run their whole business,” Frazer says. The software provides all the necessary accounting services, manages all the paperwork associated with a used-vehicle purchase, manages vehicle inventory, and even manages finances. That’s particularly important for dealerships that provide financing to buyers, Frazer says, as the software helps those dealers keep track of payments.

Making sure that those dealer clients can stay on top of their business means that Frazer Computing (www.frazer.biz) has to stay on top of changes in technology, Frazer says. For that reason, the company has 10 programmers on staff who work daily to update the software that Frazer Computing designed and developed. 

“We send out new releases almost daily,” he says. That’s just one element he believes sets Frazer apart from its competition.

The other element is the price. Frazer says it was important to him to make the product affordable. A dealer can use Frazer software for as little as $500 a year. The aggressive pricing policy has resulted in brisk business, he adds.

“We expect over 4,000 dealers will purchase our software this year,” he says. Last year, Frazer Computing added about 3,800 new customers and 3,000 the year before. It currently serves more than 13,400 customers total.

Those increased sales have led to increased employment at the business, which added 20 new people last year. With 60 employees on staff now, the company is almost at full capacity in its current facility, so a building project is also in the works.

Building plans

Frazer Computing moved into its current facility in 2010, when it was just 5,000 square feet. In 2012, the company added another 5,000 square feet. The facility can hold about 10 more employees before more space is needed, Frazer says, and he already has plans to add that many employees this year.

So, Frazer also has plans to begin work this year on a three-story, 14,000-square-foot building right next door to the current facility, connecting the buildings with a covered walkway. Frazer expects to break ground this year and finish the first floor by the end of the year, with plans to build out the second and third floors as needed. Along with office space, the building will contain a 200-seat auditorium to replace the 60-seat auditorium the company currently uses for its daily morning meeting.

At this time, Frazer has had preliminary talks with architects and Canton municipal officials, but has not finalized any plans.    

SYRACUSE — CenterState CEO and Syracuse University (SU) have had a long-time partnership in developing and supporting collaborations to help drive economic development, growth, and support SU’s academic mission.

That’s according to Liz Liddy, interim vice chancellor and provost at Syracuse University.

A “key” part of the effort is “supporting innovation and enhancing opportunities” for students and startups to develop their ideas into marketable businesses, said Liddy. “The expansion of the … Syracuse Tech Garden represents another step in that effort.”

She noted as an example, the Syracuse Student Sandbox, an incubator that the Tech Garden houses to help young entrepreneurs advance their ventures from an idea to a company. 

Liddy made her remarks on Feb. 2 as CenterState CEO formally opened the Tech Garden II on the ground floor of AXA Tower Two at 120 Madison St. in downtown Syracuse.

The more than 18,000-square-foot space is an expansion of the Tech Garden, which operates in a 33,000-square-foot space at 235 Harrison St., adjacent to the AXA Towers.

CenterState CEO said it pursued the expansion in response to the “demand for space and innovation programming.’

“That ability to start and nurture and grow business is fundamental to the success of any economy and that is the singular mission for the Syracuse Technology 

Garden,” Robert Simpson, president and CEO of CenterState CEO, said in his remarks to begin the formal opening event. 

The Tech Garden II, which “soft launched” last October, is home to six tenants. They include M.A. Polce Consulting, Inc., a Rome–based computer consultant; VentureTechnica, a company offering custom-technology products; tuzag, Inc., a digital-advertising technology company; Lake Effect Applications, a gaming-application developer; TangoSquared LLC, a firm specializing in branding and marketing-communication design; and the New York State Energy Research and Development Authority’s Clean Tech Center.

“Both [Tech Garden] buildings function identically. Tenants can flow through both,” Seth Mulligan, vice president of innovation service at CenterState CEO, said 

during his talk at the event.

CenterState CEO, the region’s primary economic-development organization, represents 2,000 members in a 12-county area of Central New York.

The Tech Garden II, a $200,000 expansion, will support the collaborative efforts between CenterState CEO, the Tech Garden, and Syracuse University.

National Grid provided an additional $50,000 to help with the build-out.

The Tech Garden for the last two years has operated at “maximum physical capacity,” currently supporting 70 companies with more than 175 employees, according to a CenterState CEO news release.

The Tech Garden operates with about a $1.8 million total annual budget, with about 80 percent of that being grant funding and other outside funds that “pass through” to the startups and entrepreneurs it helps, according to Mulligan. Four full-time employees staff it. 

New York recently selected the Tech Garden as one of the first five New York State Innovation Hot Spots, a program that provides startup companies sales and income-tax relief “with the ability to grow into START-UP NY space,” according to CenterState CEO.

Grants for Growth

CenterState CEO also used the Feb. 2 event to announce $425,000 in Grants for Growth to seven companies.

The awards included $150,000 “concept to marketplace” investments for tuzag, Inc. and Skinny Eats, LLC, which will expand into a new specialty food manufacturing facility in Binghamton.

Tuzag has developed an “evolutionary” technology and methodology for making digital advertising better for both consumers and brands through an “anonymous, tailored advertising ecosystem,” Dave Bulger, company CEO, said at the event.

“Think eHarmony for ads,” he quipped.

Santa Monica, California–based eHarmony is a relationship website that uses a “compatibility matching system” to send members potential matches. 

With the S.I. Newhouse School of Public Communications and School of Information Studies at Syracuse University; a “concentration of nationally regarded” advertising agencies; and “abundant” access to talent, Central New York seems “ideal” for an advertising-technology startup like tuzag, Bulger contended.

“However, if it wasn’t for Seth [Mulligan], the Grants for Growth program, the Tech Garden, and its designation as a Central New York Innovation Hotspot, I would not have been able to launch tuzag in Syracuse,” he added.

Starting any company is “fraught with peril,” Bulger noted, but trying to start a company in an area without pre-revenue resources is “merely an expedient way to burn through your life savings.”

Besides the “concept to marketplace” awards, the funding also includes $25,000 “proof of concept” grants to Solstice Power, which will construct a field-test prototype of its Solstice hybrid system. 

Its hybrid system is a “new solar technology that produces three times the electrical-energy efficiency of traditional flat solar panels and generates both electricity and heat from a single system,” according to CenterState CEO.

In addition, Ichor Therapeutics, Gyro Heat Technologies, Azeer Intimates, and Gridstream also secured “proof of concept” grants.

AUBURN — Cayuga County entrepreneurs and startups looking for space to manufacture their products and receive technical and financial assistance may get a new place to call home by mid-2016.

The Cayuga Economic Development Agency (CEDA) is working to develop a new business accelerator for small companies in need of flexible manufacturing space to develop their products.

Andrew Fish, executive director of CEDA and the Cayuga County Chamber of Commerce, envisions a 30,000-square-foot facility for what is being called the Innovation Business Accelerator (IBA), “with a good two-thirds of that being flexible, adjustable manufacturing and assembly space.” The planned launch date of the facility is June 2016.

Such space is in demand, according to Seth Mulligan, VP for innovation services at CenterState CEO, and a management and finance mentor at the Tech Garden business incubator in Syracuse. He notes that there is not enough space in the region for product innovators. For example, the 33,000-square-foot Tech Garden, and its recently launched 18,300-square-foot Tech Garden II, is all office space, focused primarily on software development. It’s also mostly full.

CenterState is acting as a consultant to CEDA (an effort spearheaded by Mulligan) during the planning and establishment phases of the IBA project. “Our job really is to help them identify feasible sources of funding and package those” and then step aside so Andrew Fish and his team can decide what funding to chase, says Mulligan. He envisions bringing the same motivators and rapid innovation techniques used in software incubation to product development at the IBA in Cayuga County.

Manufacturing space in the planned facility could be used to produce goods made of plastic, metal, glass, or other materials, and for the production of value-added agriculture and food products, says Fish. CEDA has yet to choose what specific business sectors the IBA will target. The most growth the agency has seen in the region is in plastics manufacturing, according to Fish, but other sectors could also take part.

“Interestingly enough, we have this whole segment about tourism and the environment, and how that ends up being part of the play; we don’t really know because [the IBA is] obviously not an incubator for tourism-related activities, but perhaps there is something there,” Fish says. “We’re trying to sort through all of that.”

Finding funding

Attaining funding is a priority. Fish says CEDA has the money it needs to implement its plan over the next 16 months until the intended launch-date. Part of that plan is acquiring the $1.5 million needed to actually launch the IBA.

Three major sources of funding have been identified by CEDA: about one-half to two-thirds of the total funding would come through federal and state grants, and the remaining portion would come from a combination of local philanthropic community foundations and the local business community, according to Fish. Businesses willing to help could benefit in a variety of ways that Fish says are still being explored, such as naming rights or a lifetime association with the IBA.

“Based upon the programs we know exist, that have funded things like this throughout the country and throughout the state; we’re pretty comfortable with that mix,” he says.

The biggest single source of potential money that CEDA will chase is from the federal government’s Economic Development Administration (EDA). Fish says the EDA “has dollars in the budget every year for accelerators and incubators.” “They give out very large sums of money nationally every year for that.” 

CEDA also plans to submit the IBA project to the Regional Economic Development Council program to seek funds through the upstate revitalization competition announced by Gov. Cuomo last month.

“We’ll certainly be engaging Congressman [John] Katko when it comes to the federal dollars that we’ll be going after,” says Fish. “Certainly any connections that he has will be very helpful, as well as Senator [Chuck] Schumer and Senator [Kirsten] Gillibrand.” Fish adds that CEDA will also engage with the state legislature for tapping state funding.

Just as important as funding to the success of the IBA, says Fish, is community support. “If people don’t understand what we’re trying to do, if people aren’t behind this, if we don’t have our stakeholders behind the fact that it’s going to take us time and energy to put effort into this, that can derail us just as fast” as not getting the necessary funds. “We’ve really got to do a good job of engaging the community, not only in Auburn and Cayuga County, but in Central New York as a whole,” Fish says.

A possible major extension of the IBA being explored is a $3 million seed fund, developed by project partners and possibly supplemented by grant money, to make seed investments in the Innovation Business Accelerator’s startups. Fish’s primary interest in the seed fund is as a means to keep businesses that graduate from the IBA — a process he says would average two to three years — in the region, a caveat intended to prevent newly created jobs from leaving. Fish says he also would like to see portions of the seed money designated for certain business sectors.

“We would not try and create a whole venture-fund management team and everything just for the $3 million. I mean, that’s a small pot to try and have an entire team around for making those decisions. So what we would try and find is a partner within the state to basically take those funds, manage those funds, and we would just have some caveats that just go with it,” Fish explains.

Involving existing businesses

CEDA also plans to incorporate a sort of equipment-time-sharing program that would benefit not just startup businesses, but also established businesses.

The IBA would ideally have associate members consisting of existing businesses in the area with manufacturing capabilities. Those businesses would identify times when they aren’t using their manufacturing equipment, and allow IBA startups to come in and use the equipment to make their own products. On the flipside, the established businesses would be allowed to use equipment owned by the IBA when it isn’t in use by the startups. 

“It wasn’t just startups that were coming to me way back when we first started this process,” says Fish. “It was [existing] businesses themselves that were coming to me,” saying they have these ideas for new products, unrelated to their current business, that they want to explore. But, says Fish, these businesses said they needed time, resources, help with marketing, or other support that would allow them to move forward with their ideas and expand.

“It’s companies that are able to make those kinds of investments and make those kinds of leaps forward [that] we’re also looking at targeting,” says Fish. IBA organizers hope to engage Cayuga County product manufacturers such as Currier Plastics, UPSCO, Cayuga Milk Ingredients, and others in the effort.

Finding a site

Identifying a location for the IBA in the Auburn area in the first half of this year is another priority. Specific locations have not been identified yet, but since announcing the IBA project at the Cayuga County Chamber of Commerce Economic Forecast Luncheon on Jan. 29, Fish says he has received several phone calls from people suggesting properties for CEDA to look at.

“I even had one individual, or corporation, come forward and say ‘Hey, if we donated this, would that work?’ So there are a lot of opportunities out there,” Fish says, “but we have to pick the one that makes the most sense.”

Fish says trips to Pittsburgh and Boston with Seth Mulligan and the advisory board are planned to visit other facilities that play a similar role as the IBA will, to learn some of their best practices. They also want to learn about the other facilities’ manufacturing equipment.

Equipment purchases, says Fish, will mostly be made after CEDA has talked with prospective tenants to see what suits their needs. But in the visits to Pittsburgh and Boston, Fish will be looking for what he calls “common denominators,” or pieces of equipment that are needed frequently and that also aren’t readily available to small businesses. Such equipment CEDA will explore purchasing without first consulting prospective tenants, says Fish, “because we know that [equipment is] going to touch on 80 percent of the opportunities that come through our door.”

While the focus of the IBA will be on production capability, with approximately two-thirds of the IBA floor space expected to be devoted to manufacturing, Fish says much of the remaining space will be allocated to office space that will help those small companies that aren’t ready for production yet.

Fish projects a competitive process for companies to qualify for admittance to the IBA.

“The entire purpose of why we’re doing this is so that we are — we are increasing drastically the success rate of the companies that are starting up,” said Fish.

“This isn’t about subsidized space. If incubators or accelerators become about subsidized space, you’re done,” he argues. “It has to be sustainable, so all these things that we’re talking about are not going to be freebies.”

He also emphasized that the IBA is about filling gaps in upstate New York’s incubator landscape. “We’re not here to compete with High Tech Rochester, or the Tech Garden in Syracuse, or the incubation facilities that they’re bringing online in Cornell. We’re here to fill a different niche,” says Fish.

He says he plans to ask for input from local business owners and to give updates about the IBA project over the coming months.