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HIGH-TECH COMPANIES IN SOUTHWEST FLORIDA
September, 2002 Just what will it take for Southwest Florida to
attract a critical mass of technology companies?
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David Bankston says he knew it was a risk. After all, as the manager of Web development at research database Lexis.com in Dayton, Ohio, he enjoyed considerable responsibility and was well compensated, too. But the 39-year-old was also ready to “do something new … something highly creative … [that] would allow me to fulfill my entrepreneurial side,” and the job he was considering offered all that. Besides, it was in a little Florida town that sounded appealing. So he went to Naples and took a look. “This is a nice place,” he decided. “The people are friendly, the streets are clean, it’s safe.” Bankston and his wife moved to Naples, where he teamed with attorney Kim Patrick Kobza to create what would become Neighborhood America, a company that develops Web-based communications tools. Neighborhood America now emp-loys 37 people and provides technology for such projects as Imagine New York, which invited people online to share ideas for the future of the World Trade Center site, as well as for such private companies as the Lutgert Cos., a Naples real estate developer. Some of the largest projects in the country are “running on our technology,” says Kobza. “You could just as easily take our company and put it in San Francisco or New York City.” That’s just the kind of high-tech local success story that Southwest Florida business leaders want to hear. Convinced that the old strategy of wooing Northern companies to relocate to paradise is no longer enough, economic developers are seeking to expand the region’s tourism-based economy and raise the skills—and salaries—of workers with “new economy” companies, from software developers to conventional busi- nesses that rely on technology to enhance their operations. Making the region a high-tech haven is a primary focus for econ-omic development organizations in Charlotte, Collier and Lee counties. After months of discussions with hundreds of technology executives, telecommunications companies, community leaders and others, the counties have created a regional task force, led by Florida Gulf Coast University’s business dean, Dr. Richard Pegnetter, to help the region achieve its high-tech goals. Collier economic development officials already use the slogan, “Naples: High-tech’s best-kept secret.” But most admit that high tech won’t become a visible part of the local economy without more regional cooperation, a larger technically skilled labor pool and more high-speed Internet access and other telecommunications infrastructure. Another need: more direct flights from Southwest Florida International Airport to New York and the West Coast. Local tech executives complain that the difficulty of getting to clients is Southwest Florida’s primary disadvantage. Economist Henry Fishkind of Orl-ando’s Fishkind & Associates credits Southwest Florida officials for recognizing those hurdles. “They’re playing the right tunes, being realistic in that they’re not going to be Silicon Valley Southwest. A lot of places are under that illusion,” he says. In fact, Fishkind adds, economic development efforts in Lee and Collier are “better focused than others in the state.” He suggests that FGCU could play a critical role in the same way that major research universities help stimulate industry growth in Silicon Valley and the Research Triangle in North Carolina. But FGCU, currently a small teaching university rather than a research center, will have to increase its technology offerings and expertise to do that. That Charlotte, Collier and Lee are trying to identify strategies to attract and retain tech firms puts them far ahead of many counties, says Mike Freeman of HDR Management in Kansas City, Mo., a consulting firm hired by the local economic development groups. “It all starts with vision,” he says. “I sense that there’s a strong commitment.” Meeting the Needs One of the biggest challenges the region faces is mustering the telecommunications infrastructure that technology companies require. Infrastructure development is under way in other parts of the state, but not in Southwest Florida, Freeman says. Lee does boast a variety of services, including DSL, cable modem, broadband wireless and competing firms serving high-speed data needs. Several sonet rings, which provide a fiber-optic system that prevents data transmission interruptions, are located throughout the county, including in the Gateway area, home to major employers such as Sony, Sprint, Gartner and FindWhat.com. Collier has fewer sophisticated networks, Freeman says, although demand for such services is already there. The region does enjoy proximity to a vital network access point (which offers speedier Internet access and greater reliability) in Miami. Jim Desjarlais, a technology business development specialist with Lee’s economic development office, says the area could land a second tier network access point in a year if it can convince provider Terramark NAP of the Americas that there’s sufficient demand. That could be an important turning point, says Tammie Nemecek of the Economic Development Council of Collier County. “So many people have said, ‘Get that and you’re on the map.’” More regional cooperation, say Freeman and other observers, would speed the development of such infrastructure; regional marketing efforts to high-tech companies would also increase local economic developers’ effectiveness. Such marketing, they say, should stress the region’s big selling points: quality of life and national recognition as an attractive location for business. Those assets can outweigh the lack of infrastructure and high-tech workers here, as recent growth in the local technology industry shows. Since 1995, the number of technology firms and workers in Southwest Florida has more than doubled. Local economic development groups estimate that Lee and Collier now have nearly 600 technology companies, from large software developers to one-man Web developers, employing more than 10,000 workers in all. Two of the largest are Sony, with 695 employees, and information technology firm Gartner Group with 330 workers, both in Fort Myers; in Naples, ASG, a software and services provider, employs more than 200. A Place to Prosper? Although technology companies all around the globe have been hammered in the past few years, several local companies are not only prospering but planning expansions. FindWhat.com, a much-lauded local success story, will move this fall into larger headquarters in Colonial Bank Plaza on Boy Scout Road. Founded in Fort Myers, the company expects 2002 revenue to reach $37.5 million and hopes its 95 employees will grow to 150 by the end of the year. “In terms of the infrastructure, Southwest Florida is a challenging place to build a dot-com,” admits Craig Pisaris-Henderson, founder, president and chief executive officer. “But at the same time, it was nothing that we couldn’t overcome.” In addition, Neighborhood America is doubling its space next year with a new building on Vanderbilt Beach and Airport-Pulling roads in Naples. Biotechnology company Arthrex, which designs and manufactures instruments for arthroscopic and orthopedic surgery, plans to add 136 jobs when its new world head- quarters and manufacturing facility is completed in Naples; and F.N.B. Corp., a Naples-based, $6.7 billion diversified financial services company, is building a new information technology center. Local firms find that being based in Southwest Florida is no hindrance in building a global clientele. RGB Internet Systems, which provides Web hosting (housing and maintaining files for one or more Web sites), Web site design and programming, has clients in countries such as England, India, Mexico and Costa Rica as well as throughout the United States. RGB doesn’t need to bring clients to their Naples office or travel to them because initial contact is made through RGB’s Web site and a majority of the customer service is done online. “The Internet is its own little world,” says co-founder Gabrielle Marvin. The company, formed by Ralph Bayer, Marvin and husband Bill Marvin, is in the black after a year in business. With a staff of subcontractors, about 25 percent of its clients are local. Being in Fort Myers is a personal choice for Bill Laakkonen, who founded Internet Marketing 1 in 1996 and has built a client base beyond Lee and Collier. “We would be better off, bandwidth-wise, to be based in a bigger city, but here we are,” he says. “We’ve been here and we like it.” Internet Marketing also has global clients. The company serves the online market, offering anti-virus network security consulting, Web hosting, domain name registration and virtual dedicated servers, which are needed for sites that develop a considerable amount of traffic, such as 35 million hits a day. “You name the country and unless it’s very obscure we probably have customers here,” Laakkonen says. Collier’s Nemecek says employees leaving local tech firms to start their own ventures are also bolstering growth; about a dozen new companies have been formed that way. Alluna Group, a technology consulting firm, was founded by four former executives from local technology companies, including Fort Myers-based NeoMedia Technologies and Naples-based Fischer International Systems Corp., the parent of software developer SmartDisk Corp. Founded last year, the company already has several national and global clients and plans to expand quickly. High-tech executives and entrepreneurs want other successful firms to join them in paradise. “The more the better,” says Neighborhood America’s Kobza. “Having a strong technology industry starts to create the critical mass necessary to support the communications discussion. Technology companies tend to foster innovation through collaboration.” Carol Conway, a Silicon Valley veteran who owns CRS Technology, a Cape Coral-based firm that provides computer networking products and services to businesses, agrees. “In tech hotspots such as Silicon Valley, Boston, Austin, North Carolina—places where they’re cooking up products, software and services—there is an intensity that is unique. It creates competition, energy.” Conway, who serves on the Horizon Council, Lee’s economic development board and FGCU’s College of Business Advisory Board, says that without such a concentration of high-tech expertise and energy, she envisions second-generation product development in Southwest Florida. “The leading-edge things happening in tech hotbeds are not likely to do well here,” she predicts. “We don’t have this think-tank of computer scientists.” Making Room for Technology To attract more high-tech companies, however, the region needs new research and technology parks; already, a few developers have unveiled plans for such parks. In Lee, Alanda Ltd.’s O. J. Buigas, economic development officials and FGCU are partnering to develop the 100-acre Florida Gulf Coast Technology and Research Park between the university and Southwest Florida International Airport. The goal is to draw large technology and biomedical companies and other businesses, all with a research component. On 20 acres at the center of the park, FGCU will house research efforts as well as its Small Business Development Center and Center for Leadership and Innovation. NeoGenomics, a genetic research lab, is the only non-university tenant to be announced so far. In Collier, the anticipated January approval of a zoning classification for research and development parks should help fuel projects. Gates McVey Builders has announced that pending the purchase of the land, it will build a high-end, high-tech development in North Naples. In addition, 19.28 acres on Old 41 now holding North Naples Driving Range will be converted into a research and development park for information technology, aerospace and biotechnology firms. The goal is to attract companies that will expand the base of high-tech jobs here, says Andy Mager of Galleria Properties in Naples. “It appears to be something that everybody wants.” To lure the companies, Southwest Florida must be able to deliver the workers they need. The community needs to focus on providing more cultural and recreational opportunities for the young, well-paid professionals that technology operations hire, says Kobza, whose Neighborhood America pays salaries averaging $50,000 to $60,000. “It has to be more than the beach, more than Fifth Avenue partying,” agrees Bankston. Creating “Genius Factories” In addition to local officials and economic developers, some entrepreneurs see opportunities in helping Southwest Florida’s high-tech industry grow. After a 20-year career that progressed from starting and turning around businesses to creating a monthly investment newsletter with 15,000 subscribers, Richard Schmidt came out of semi-retirement in Naples to turn his attention to technology. He decided to start a venture capital fund to assist and encourage technology start-ups; and through word of mouth and advertising in his nationally known Stellar Stock Report, Schmidt generated millions of dollars to start Stellar Venture Partners two years ago. “I love starting businesses from scratch and then selling them. It’s almost a sport and a hobby, but it pays well, too,” he says. The firm, based in Bonita Springs, established Southwest Florida’s first business incubator—Stellar Business Builders—which Schmidt dubs a “genius factory.” So far, the incubator’s biggest success is Stellar Internet Monitoring, which offers an Internet-based service that enables corporations to monitor employees’ activities on the Internet. The company, which used to be named ICaughtYou.com, reported its first cash-flow-positive month in June. With 18 employees and a new office in London, the company plans to hire at least 80 workers in two years. Stellar Business Builders also houses EZ KidWeb, which provides software for children to build Web sites, and owns 10 percent of Synergy Networks, a high-speed Internet service provider based in Fort Myers. “Things are becoming successful. We are a significant force in the growth of the technology business and employment in Southwest Florida. Our objective is to do it profitably,” Schmidt says. Executives of local tech companies applaud such venture capital efforts. “It is very difficult to get investors,” says Bert Hamilton, owner of Harvey Software and a board member of the Gulf Coast Venture Forum, a new organization formed to pair companies with investors. In contrast to larger areas, such as Atlanta, Tampa or Miami, Hamilton says, investors in Southwest Florida are in short supply. “If you need to raise capital, you’re on your own,” he says. “Because we’re an 18-year-old company, it’s easier to go to a bank.” Founded in 1984 in Fort Myers, Harvey Software provides shipping software and other products for UPS, Federal Express and the U.S. Postal Service, and sells to retailers such as WalMart and Milwaukee Tools. Hamilton expects to grow from 14 to 50 employees by the end of the year. But despite those obstacles, new companies keep bubbling up. In May 2002, Dr. Robert Minor, a former senior vice president of Sylvan Learning Systems who has a home in Naples, and his son Rob formed Education Planning Technologies. The business uses Internet technology to give educators and managers tools to create training programs. With headquarters on Fifth Avenue in Naples and a second office in Maryland, the Minors are marketing their individualized programs to schools, private education institutions and companies. Robert Minor was drawn to Naples for the lifestyle and setting, but he soon sensed the interest and opportunity in building a strong technology sector here. “There’s a lot of excitement toward technology companies,” he says. “It just made sense for us to be here.” The hope is that others will follow. Technology To-Do List Ten suggestions for attracting technology to Southwest Florida. Secure a Tier 2 Network Access Point in Southwest Florida. Form a telecommunications advocacy committee of elected officials, economic development officials and industry leaders to create goals for telecommunications in the region. Develop benchmarks for plotting the region’s progress in improving telecommunications and technology. Develop a regional telecommunications map depicting what services are available and what areas require additional investment to foster collaboration among the telecommunications industry. Construct a regional economic development Web site focusing on attracting and retaining high-tech business. Develop a technology incubator by partnering local software/tech businesses and higher education. This could help Florida Gulf Coast University secure research and development funds. Get more local businesses to use e-commerce. Evaluate opportunities for telecommunications companies to speed up installation of services. Educate the real estate industry about new technology, and establish economic incentives to encourage those in the industry to learn more about high-tech homes and businesses. Develop a regional marketing initiative. Source: The Lee County Economic Development Office and The Economic Development Council of Collier County. Index of Sources EZ Kid Web FindWhat.com Harvey Software Internet Marketing 1 Neighborhood America RGB Internet Systems Stellar Internet Monitoring Stellar Venture Partners
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