The pipeline of marketable, medical technologies flowing from the Northeast Ohio outstrips its entrepreneurial talent and experience. That stunts new company growth, experts say.
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View full sizeStephen Jacobs, new vice president of sales for Checkpoint Surgical in Highland Hills, will be moving his family back to Cleveland. Stephen Jacobs is focused, high energy and well connected.
He's a top-shelf marketing talent -- the kind this region's biomedical industry sorely needs but can't find close to home.
The newly hired Jacobs lives in Colorado. The father of seven commutes for now, as he marshals a national network of distributors to sell a promising nerve-stimulation device for surgeons.
"The growth opportunities here are huge," Jacobs said of his new employer, Checkpoint Surgical LLC in Highland Hills. "It's a beautiful marriage of great scientists and entrepreneurs. It's a rare combination."
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View full sizeLen Cosentino is chief executive and president of Checkpoint Surgical, a nerve-stimulation device company in Highland Hills.Clearly, Jacobs is thrilled to be back. He and his family lived in Cleveland Heights in the 1990s, before heading west.
His bosses are thrilled to have Jacobs, described as a "force of nature" who was the best of five candidates for the job.
He's among a number of executive-suite sharpies that promising companies like Checkpoint Surgical must recruit to Northeast Ohio.
Why? The pipeline of marketable, medical technologies flowing from the region outstrips its entrepreneurial talent and experience. That stunts new company growth, experts say.
That means the region is waiting longer for the virtuous circle of new companies, new jobs, new wealth and reinvestment that's expected to make the bioscience industry a pillar of our transforming economy.
The talent pinch frustrates those like Baiju Shah, president of BioEnterprise Inc., a University Circle incubator of bioscience and health care companies supported by medical and educational institutions in Cleveland and Akron.
"We probably have at least 10 projects a year in the health-care space that we think have a very interesting technology package, but we can't find the right management team," Shah said.
The head of a regional nonprofit that pumps money into early-stage companies says the need is unrelenting.
"The demand for talent, especially game-changing, senior management talent in Greater Cleveland, has never been higher," said Ray Leach, head of JumpStart Inc.
Northeast Ohio probably has less than 20 entrepreneurs who have raised $5 million or more for a biomedical startup company in the last decade, Leach said.
In response, JumpStart, BioEnterprise and universities have launched strategies to develop and attract more entrepreneurial talent, through education and specialized recruiting.
In a sense, the talent squeeze is a good sign.
It means marketable innovations in medical devices and health-care services are flowing steadily, after a decade of efforts to nurture new business from the region's robust health care institutions and medical research.
The innovations are drawing top-flight talent from beyond the region. Shah estimated that among the 90 startup companies that BioEnterprise works with, 20 key positions were filled with talent outside the region in recent years. That includes a dozen chief executives, he said.
CEOs and marketing pros from cities like Boston, Philadelphia, Chicago and Montreal either commute or have made the move here, to exploit products and markets that excite them.
The region's emerging strengths in the biomedical industry include heart-and-artery treatments, nerve stimulation, stem cell therapies, biopharmaceuticals and specialized surgical procedures.
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View full sizeChris Hock, executive recruiter and business consultant from Akron, said the regionn's biomedical startups need sales and marketing talent.Northeast Ohio is relatively young in its biomedical evolution. So we have yet to produce the critical mass of talent that churns in cities like Minneapolis and Boston. Clusters of health-care related companies, some of them global in scope, spin out executives yearning to start their own companies.
Northeast Ohio has growing skills in engineering and developing medical products, said Chris Hock, managing director of Griffon Partners, an executive search firm in Akron that helped recruit Jacobs to the Checkpoint Surgical.
But engineers, doctors and researchers who want to take their medical innovations to market have no idea how to get there, Hock said.
That's why seasoned entrepreneurs and the teams they bring with them are so valued. The ability to understand medical products and their markets, lead a young company and raise capital is treasured -- not only here, but in every metropolitan region that's trying to increase businesses.
As medical technologies move from prototype to market, the need for talent that knows how to launch and sell new products is growing, Hock said.
"Most of the startup sales experience hasn't happened [here] yet," Hock said. "That's because a lot of these startups have hatched in the last few years and they aren't out in the market."
A top official with Sales & Marketing Executives of Cleveland, a local trade group, could not think of one member in the biomedical field.
Checkpoint Surgical is moving to market, led by veteran entrepreneurs. NDI Medical is incubating Checkpoint Surgical and another company, after selling the technology and patents from NDI's first product -- a bladder-control device -- for $42 million in 2008.
The problem:
Northeast Ohio doesn't have enough experienced people to develop and market the products of a growing bioscience industry.
The reason:
The region is relatively young in its biomedical evolution. We have becomestrong in the areas of heart-and-artery treatments, nerve stimulation, stem cell therapies, biopharmaceuticals and specialized surgical procedures. But we have not yet produced the mass of leadership and marketing talent seen in cities like Minneapolis and Boston.
The solution:
JumpStart, BioEnterprise and universities are trying to develop and attract more entrepreneurs, through education and specialized recruiting.
Jacobs said his new salary is less than half of what he made before, but he's got equity in Checkpoint Surgical. That could pay off down the road if the company's new medical device -- a hand-held probe that surgeons use to check the health of nerves -- proves a success.
"Steve is a great fit," said Len Cosentino, chief executive of Checkpoint Surgical. "He's someone who can be with this organization for a long time and be a CEO candidate for one of [NDI's] future companies."
"Absolutely," Jacobs said of being the top guy some day. "But I want to earn my way there first."
To attract and develop talent that will more quickly exploit the region's health care opportunities, a variety of efforts are under way.
BioEnterprise recently contracted with a search firm in Atlanta that will assemble a database of executives across the country who might be interested in Northeast Ohio ventures, Shah said.
He wants to compile a list of up to 200 people, some who could be drafted as advisers or board members for startups, Shah said.
"We could host them at trade shows or investment conferences," Shah said. "We can start to build a buzz with them."
JumpStart recently hired a full-time talent matchmaker. In the last six months, Robert Hatta helped biomedical startups lure four high-level executives from out of town, Leach said.
Hatta said he's helping the startups craft job descriptions and determine compensation packages. JumpStart also helps the companies pay for executive recruiters.
"We need to create positions at companies faster and better than they might otherwise be created so we get this jobs effect from the startup economy," Hatta said.
To bolster the region's startup culture, Case Western Reserve University, Baldwin-Wallace College and Kent State University are among schools that have beefed up entrepreneurial studies.
"Our generation learned how to get a job, not create a job," said Peter Rea, director of the Center for Innovation and Growth at Baldwin-Wallace.
The region also must do more to welcome skilled immigrants, he said.
"Silicon Valley is full of immigrants," he said. "They are much more likely to start and grow companies."
Rea called on the Greater Cleveland Partnership -- the region's largest chamber of commerce -- and economic development organizations to put more effort into developing and attracting entrepreneurial talent.
BioEnterprise's Shah said he's not familiar with any successful models of talent growth and attraction nationally.
"I don't think we've solved the problem at all," he said. "If you ask what keeps me up at night, in terms of the challenge, one of them is accelerating the talent. ... We have not cracked the code on that."