Prominent entrepreneur and venture capitalist Jordan Levy is confident that a new $5 million business plan competition will help lure innovative businesses to Buffalo.
Levy chairs the steering committee of an initiative that some have christened Buffalo’s very own Shark Tank, referring to a popular reality TV show. Named for Buffalo’s latitude, 43North will award $5 million in cash prizes to startups and entrepreneurs who hatch their business ideas in Buffalo. It’s part of the state’s Buffalo Billion economic development initiative.
Levy sat down with The Buffalo News’ Brian Meyer to discuss Western New York’s entrepreneurial climate. Here is a summary of some issues discussed in a video interview that is part of the In Focus series. Watch the full eight-minute interview above.
Brian Meyer: How much interest have you seen since [43North] was launched?
Jordan Levy: It’s really been sort of overwhelming so far. We launched 43North in early February, and since then, our team has been doing outreach throughout the globe, to be honest with you. [As of early March], we’ve had about 400 people who have applied for the program. And we have had about 6,000 inquires so far. So there is a good amount of activity. We are looking for more. We are beginning the outreach using a lot of social media ... The applications have to be in by the end of May, so we’re in very good shape in terms of getting the kind of reach that we were looking for.
Meyer: Some are hoping that maybe you’ll have a thousand or more.
Levy: The bigger, the better in this case, I’m sure. But ultimately we want to just create in this first year a perception in people’s minds that Buffalo is again a great place to start companies. This is one of the those tools that we use to do that. I think the first year will be the seed year. The second year should be our breakout year. We’re excited that so far the interest level has been as high as it is.
Meyer: How would you describe the climate in Western New York for entrepreneurs.
Levy: It’s cold right now (chuckles). It’s not an easy place for entrepreneurs in the startup world. We lose sight of the fact that there are thousands and thousands of entrepreneurs here in Western New York. The guy who started a convenience store on the corner, to the woman who started her own beauty parlor, they’re entrepreneurs. A plethora of restaurants that go up and down all of our neighborhoods throughout Western New York, those are all entrepreneurs. ... We’re focused on a little different sector. We’re focused on those that you think about that are the Mark Zuckerbergs or the Sergey Brinses or the Bill Gateses of the world, if you will. We’re trying to find people that want to create [businesses] that save people’s lives, change the environment, create new ways of manufacturing products and become the next Facebooks. ... We’re trying to change the attitude, and that’s a tough market in Buffalo right now. It’s not thought of as one of those places that entrepreneurs want to start up businesses in those sectors would come and build great companies. ...
Meyer: But doesn’t it get beyond perception? Doesn’t it get to the issue of the infrastructure – venture capital, the support services, etc.?
Levy: There’s no question. But a lot of it is chicken and egg. Venture capitalists are going to go where the action is. And, of course, the entrepreneurs are going to go where the money is. So it’s sort of like a self-fulfilling prophecy. That’s one of the problems. We try to change the perception by putting a stake in the ground, which we’re doing here. Gov. Andrew Cuomo has really been brilliant in thinking: “I’m going to spend a billion dollars.” Others have tried and they’ve done nice things ... but it’s not been big enough to change the model.
A billion dollars is big enough to change the model. A $5 million business plan [contest] is big enough to change attitudes. So we have to do things much bigger and better. And I know that upsets some people. “Why are we using taxpayers’ dollars to go and rebuild the economy of Western New York? Why is Andrew Cuomo doing that? Why are we using taxpayers’ money to give away to a business plan competition and entrepreneurs?” Because if we don’t, we won’t be able to get a change in people’s psychology and we won’t get entrepreneurs to come here.
Meyer: We’re in Z80 Labs, a business incubator right here in The Buffalo News in downtown Buffalo. This has been here for almost two years now. Tell us what happens in this space.
Levy: Ron Schreiber and I have been starting companies and investing in them for a very long time. ... The idea was to create an environment where young entrepreneurs who want to start businesses can be together ... They’re all in one place, and we can create support services and have seminars and education to try to help them with the problems that they deal with. And so far, it’s going pretty well. There’s about 30, 35 people right now that come here every day – as many as 60 on some days, because some people work part-time. We have 15 companies that are in some way, shape or form connected with Z80 Labs. We put the business plan competition 43North in here since I’m chairing that. I want them here, because they’re here with the entrepreneurs. Let’s keep them all here together as long as we can, because I think it all feeds off each other.