Startup contest lures entrepreneurs to Buffalo
Opportunity could launch companies into U.S. and global markets, writes Rick Spence.
Canadians can be forgiven for underestimating Buffalo, N.Y. Most of what we know about the hardscrabble border city — snow, fires, local accents — comes from watching TV.
Most people don’t know Buffalo was the Gateway to the West nearly 200 years ago, or that in 1900 hydroelectricity from Niagara Falls made the city an industrial and cultural powerhouse, proudly called the City of Light.
By the 1980s, the Rust Belt blight of obsolescence, deindustrialization and changing trade patterns had switched off the klieg lights. Despite its grand boulevards, Frank Lloyd Wright architecture and top-notch hospitals and universities, Buffalo today struggles with population decline, urban decay and rising poverty.
The city’s plight stands in stark contrast to that of the Golden Horseshoe, the prosperity belt that starts in St. Catharines, Ont., just 50 kilometres north of Buffalo, and runs 170 kilometres through Toronto to Oshawa. But before you take up a collection for Sabres supporters, consider this: In the past five years, Buffalo-Niagara Falls’ unemployment rate has fallen from 9.4 per cent to 5.2 per cent — well below the GTA’s seven per cent. And you can still buy a starter home there for under C$100,000.
In other words, reality is more complicated than you’d think. Which is why Canadian startups might consider Buffalo as a launch pad into U.S. and global markets — especially in industries such as life sciences, clean energy, advanced manufacturing or food tech. This week, 43North, a state-sponsored incubator in downtown Buffalo, is launching its fourth annual startup competition, with prize money totalling US$5 million. Designed to jump-start Buffalo’s economy as part of New York governor Andrew Cuomo’s “Buffalo Billion” initiative, this may be the richest startup competition in the world.
The prize: eight companies will receive between US$500,000 and US$1 million in prize money. And they will compete for US$300,000 in follow-on capital. The catch: the winning companies have to work out of 43North’s incubator space in downtown Buffalo for a year.
As catches go, this is one sweet ride. The offer to bunk in Buffalo comes with free workspace, business advisers, mentors and introductions to investors across the U.S. It also includes help from savvy young staff at 43 North, who are bursting to introduce the winners to local business leaders who may become partners, suppliers or customers.
Last year’s competition attracted 542 entries from around the world. One Canadian company became a $500,000 winner: Toronto-based Formarum, which is developing an automated, allin-one sanitization system for owners of residential swimming pools.
In 2015, Ontario companies won four of 43North’s 10 prizes. As one of those winners, Taylor Mann, CEO of Toronto-based CleanSlateUV, has just finished his year in Buffalo. He says CleanSlate, which makes systems to disinfect mobile phones and tablets for hospitals and other germ-wary environments, will maintain offices on both sides of the border.
Mann calls CleanSlate’s involvement with 43North “an incredibly fulfilling experience.” The cash helped the company hire new people and accelerate development of its second-generation sanitizers. More important, 43North advisers pointed the firm to a new target market: food processors, whose demand for germ-free facilities eclipses that of some hospitals. Mann credits 43North with helping the company land its first nine paying clients. And CleanSlate just closed a $1.25-million funding round.
43North’s gamble seems to be paying off. According to marketing director Peter Burakowski, all 29 winners from the first three years remain going concerns, and half maintain a presence in Buffalo. So far, these companies have created 87 full-time jobs in Buffalo — with the real payoff to come as these firms grow over the next few years.
The entry deadline for 43North is May 24 — but you can enter sooner, and modify your submission up until the deadline. Judges will pick 20-odd finalists to travel to Buffalo for a pitch competition in October. Winners will be notified soon after, and are expected to move to Buffalo in January 2018.
Be warned: Submissions won’t be evaluated just on big ideas and ambitions. Winning companies must demonstrate how they will leverage their Buffalo advantage.
Before you apply, study the Western New York business ecosystem and figure out creative ways to profit from its industries, expertise and brainpower.