Good afternoon. Thank you for having me, Councilwoman Reynolds Brown, Councilman Goode, and thank you, Kelly Lee from Innovation Philadelphia, as well for inviting me here today. My name is Blake Jennelle. I'm the CEO of Anthillz, an Internet start-up based right here in Center City, and I'm also the Founder of Philly Startup 142 5/7/08 - PARKS & COMMERCE - RES. 080337 Leaders, which is a grassroots network of entrepreneurs that's bringing new confidence and optimism to the start-up community here in Philadelphia. I'm here today representing our 200 members and our 100 member companies who make up Philly Startup Leaders. We have a number of our members and supporters here today and I'd like you to meet them.
If you would, if you're a member of Philly Startup Leaders or if you're on our e-mail list, if you would please just stand. (Members of Philly Startup Leaders standing.)
Thank you. I also just want to read you some of the companies that these folks represent. Again, we have about 100 companies that are members, so this is just the tip of the iceberg. Hopefully 143 5/7/08 - PARKS & COMMERCE - RES. 080337 over time you'll start to recognize these names. Some of them may become household names. We have Vuzit, Find Me, Smart Genetics, Indy Hall, Ticket Leap, Eco TV, Xercel, Finpago and my own Anthillz, of course.
So most of the entrepreneurs who you see here from our group are young and their companies are growing fast. They left their companies this afternoon to come here because they have tremendous hope about this city and they believe that we can do something about it. When we started this group less than a year ago, we didn't have any grand ambitions about it. It simply started as a handful of guys who traded war stories over drinks, and we came together for 144 5/7/08 - PARKS & COMMERCE - RES. 080337 just one simple reason, which is that starting a company is hard, and it's even harder when you try to do it alone. So what those first few of us who got together didn't realize was that there were hundreds of entrepreneurs in this city just like us struggling in isolation and looking for the help and support of their peers. In fact, we thought that the handful of us were the only ones crazy enough to launch a technology start-up here in Philadelphia. As it turned out, we were not the only entrepreneurs who thought they were alone. When we polled our members recently, we found that before they joined our group, most couldn't have named five other people like them starting start-ups here in Philadelphia. Now, of course, each of our members know dozens of their peers, if not more, almost entirely as a result of Philly Startup Leaders. By networking these start-up 145 5/7/08 - PARKS & COMMERCE - RES. 080337 entrepreneurs together, our group has transformed Philadelphia from a city where entrepreneurs struggle alone to a city where entrepreneurs can thrive together, where we can help each other write our pitches, find office space, choose a web designer, navigate the investor community, and introduce each other to the people that we all need to help us succeed. What's amazing today to me is how closely knit this community has become in less than a year. Many of our members have become close friends. One of our members just had a baby and the first thing he did was to send an e-mail to our e-mail list, which has over 150 people on it, to tell us about it, including pictures. Some of our members have gone into business together, some have found employees and consultants through our group, and a few have even found funding through introductions that they got from 146 5/7/08 - PARKS & COMMERCE - RES. 080337 their peers. So I'm proud to say today that we are thriving as a community and that Philadelphia is quickly becoming a great city for start-ups, beginning at the grassroots. But there are also some challenges we all face as start-up entrepreneurs where I think the City can help. My first suggestion may not be something that you want to hear, which is that sometimes we just need the City to get out of the way. By simplifying the bureaucracy of City government, making taxes more competitive with the suburbs and with other cities, the City could go a long way toward getting entrepreneurs to start and keep their start-ups here in Philadelphia. But you already know all this. I also have a few other suggestions, which come directly from our members. We held a leadership summit in January where together our members 147 5/7/08 - PARKS & COMMERCE - RES. 080337 developed a list of the top problems facing us as entrepreneurs. The first was lack of access to seed funding. With government funds, Ben Franklin Technology Partners, for example, does a great job for companies who have revenue already or who have a seasoned management team, but they leave behind a lot of other earlier-stage companies and first-time entrepreneurs. Many of these companies wither on the vine here because they can't raise the seed funds they need to get their companies off the ground. The City also has an opportunity to incentivize seed-stage, higher-risk investments.
You can do this through tax credits to investors who take a risk on an early stage start-up; by helping to de-risk loans from financial institutions; by matching seed capital put up by friends and family of the founders. There are also many other creative strategies available here that would increase the rate of start-up 148 5/7/08 - PARKS & COMMERCE - RES. 080337 success and would help brand the City to the outside world as a place that's open for business. The second major problem we identified is lack of access to mentors. I'm not sure what, if anything, the City can do here, but I want to mention it because you may have some ideas of your own. What we found, especially in web and software, is that Philadelphia does not have enough successful start-up alumni who can mentor our young entrepreneurs, which, in part, is a symptom of our growth, because we have so many more people starting companies now than we have alumni from a generation ago. The third major problem, in addition to lack of funding and lack of mentors, is a lack of access to talent we can afford. Early-stage start-ups have little to no cash to pay salaries, and as a result, our salaries are well below market. We try to make up with it with 149 5/7/08 - PARKS & COMMERCE - RES. 080337 equity compensation, but even this can make recruiting very difficult. I do believe that there's ample talent in this city. The problem is that much of the time people who would love to join our start-ups have to say no because they can't support themselves and their family on a start-up salary. This is a tough nut to crack, and, again, I'm not sure exactly what we can do here, but I have a few ideas for some creative ways the City might help. As entrepreneurs, first of all, we'd like to see some tax incentives targeted not only at us and our companies but at the workers who join start-ups. One approach would be to fund fellowships for people who join start-ups, in much the same way the fellowships are used to subsidize the non-profit and artistic workforces. I've also seen cities give large companies direct tax credits or even outright cash grants per job that 150 5/7/08 - PARKS & COMMERCE - RES. 080337 they create or bring to the City. In Philadelphia, for example, a grant of $3,000 to $5,000 per start-up employee could help fund the crucial first months of salary while a company brings in their initial revenues. I could go on, but beyond these recommendations, there's just so much more we could talk about, and I'd rather be brief. So really I hope this is just the beginning of the conversation. What I hope comes out today is not solutions to any of these problems, because they're very tough problems, but what I hope we leave here today with is a closer relationship between the City and those of us on the front lines at the grassroots level. There is an incredible amount of momentum in the grassroots communities, and I'm confident that by working together, we can develop some innovative policies that will turn heads here in Philadelphia as well as across 151 5/7/08 - PARKS & COMMERCE - RES. 080337 the country. The first thing we need to do to develop these ideas is to cut out the buffers that stand between the City and the grassroots leaders. I suggest as a first step that we exchange some contact information and begin working together directly. Our members are anxious to work together with you, and I hope that this is the beginning of a great collaboration to come. Thank you again to you both on Council and to Kelly Lee for having us here today.
You are very welcome. We are going to have Q and A, but I'm going to seize the moment to reassure you this is the beginning of an important conversation and we welcome an opportunity to have subsequent discussions offline.
That would be 152 5/7/08 - PARKS & COMMERCE - RES. 080337 wonderful.
Hi. How are you doing? My name is Paul Wright, and just to clarify, I'm here in the capacity of Co-Chairman of the Next Generation Branding Committee. My Co-Chair is Nick Stuccio, who runs the Fringe and Live Arts Festival here in Philadelphia. The Next Generation Branding Committee is an initiative sort of by Mayor Nutter to establish private and public partnerships around bringing more attention basically to the creative arts, with a special focus on attracting 20- to 30-somethings here to the City and connecting them both within the creative arts and outside of it. Just a quick background on myself. I run a media and technology company based in Berwyn. We started the company in 2002, and that was actually the result of a merger of my previous 153 5/7/08 - PARKS & COMMERCE - RES. 080337 company, which I started in 2000. We have 33 employees, most of which are under 35, and we dabble in a combination of radio as well as digital and mobile outlets. The Next Generation Branding Committee was basically formed with three ideas in mind. It was the impetus that there is already established, strong, creative communities here in Philadelphia and we wanted to attract those and 30 13 somethings to those existing strong 14 communities. 15 Two, new technologies have had 16 a tremendous impact on reaching and 17 engaging and interacting with the 20- to 18 30-something demographic, especially 19 those in the creative communities and 20 especially as media resources have become more fragmented and media outlets have become more fragmented. Three, Philadelphia, as stated earlier by several of the speakers, has an existing strong creative sector, but 154 5/7/08 - PARKS & COMMERCE - RES. 080337 it is not broadly known for it, nor is there a clear connection either between those who participate in the creative sector or the creative communities or those who like to appreciate those who participate in the creative communities. The general objective of the Next Generation Branding Committee was to, as I said, combine private citizens who actually work inside the creative economy and with public and semi-public workers to bring more attention to the strong creative communities here in Philadelphia, both locally, nationally, as well as internationally. We're here to extend the brand of Philadelphia to include the vibrant history, the mythology, the present and future of creative industries, especially for that 20- to 30-something-year-old demographic. The committee members span the head of P'unk Avenue, actually a professor from the University of the 155 5/7/08 - PARKS & COMMERCE - RES. 080337 Arts, people from Young Involved Philadelphia, the guys who run Ortlieb's --
The woman who runs Belita and Open House and Bindy in terms of the restaurant industry; person who runs Stick and Move, a digital advertising agency here in town; Termite TV Collective; as I said, the Fringe Festival; Tettemer behind -- originally behind Red Tettemer Ad Agency, now doing kind of free-lance PR work --
You're talking much too fast. You are talking much too fast. Your enthusiasm exudes, but we got to be able to transcribe it.
So repeat 156 5/7/08 - PARKS & COMMERCE - RES. 080337 the last three members.
My mother tells me that all the time, too, so I will do my best. The Termite TV Collective, Fringe Festival --
Right. Nick Stuccio, who is my Co-Chair actually for the Next Generation Branding Committee. Representatives of the City, actually from the City Representative's Office, Erica Atwood sits on our committee, members from GPTMC. So it's truly a kind of collaboration, primarily private sector individuals, but working hand in hand with those in the public sector or kind of semi-public sector organizations. Our mission, stated simply, is to develop channels to promote the excitement, diversity and passion of Philadelphia's creative communities, again, especially focusing on attracting 157 5/7/08 - PARKS & COMMERCE - RES. 080337 those 20- and 30-somethings to the area and retaining them in the area. Our timeline -- and just to be in full disclosure, I basically got it yesterday. So I'm kind of going through what our process has been to date, and I'll have my remarks for you tomorrow when I get those written up.
But our timeline, we are slated to speak to Mayor Nutter to make our recommendations and our presentation to Mayor Nutter in early July, basically with three deliverables: a report that kind of spans what we've been discussing, people we've been talking to, the recommendations that we're making; two, a presentation; and, three, a prototype interactive video presentation that basically outlines a lot of the ways that we believe that can bring some of the creative communities together. Currently, our status, we've 158 5/7/08 - PARKS & COMMERCE - RES. 080337 been together since January, since Mayor Nutter took office. We have done -- we've conducted surveys, a little over a hundred, members of the creative economy, spanning design, entrepreneurs in technology, advertising, literature. Basically about a hundred surveys that were qualitative in nature, not trying to do anything quantitative. It was really qualitative. Not to get to any metrics necessarily, but to give us a starting point as to where we should be going in order to make these recommendations. As we represented maybe 15 or people, we 16 knew there was 50 or 60 for every one of us, that we wanted to make sure we gained input before we started working. One of the things that came out of the survey, which actually formed the core of our recommendations, which, again, we have about eight categories ready -- we're not fully ready with our recommendations, but we will be over the next month. The four categories that 159 5/7/08 - PARKS & COMMERCE - RES. 080337 came out of our surveys in terms of regardless of the sector, regardless of the creative community, the four common themes that came out were, one, that Philadelphia needed to improve its credibility, identity and perception, both within the creative community and those who are outside of Philadelphia looking inside of it. That's one category. Two, that we needed to establish programs to increase the tolerance, openmindedness and global perspective of Philadelphia, which is especially essential in the creative communities. Three, that we need to enhance the cross-collaboration and the community connections of the creative community, and, again, that represents both creative people working together as well as interacting with those who appreciate the creative communities. And then, four, and probably 160 5/7/08 - PARKS & COMMERCE - RES. 080337 arguably the most important, which kinds of pervades all of them, is that there was an amazing solidarity in the excitement and potential that everyone that we spoke to who was here in Philadelphia, whether they were transplants or homegrown, excitement and belief in the potential of Philadelphia that just pervaded everything that they did. And so our goal was to establish what recommendations around those four categories can we then make to the Mayor in July. And kind of the fifth semi-category, and it's kind of been touched on quite a bit here in a few different ways, is getting a catalogue of existing projects. There are so many rich projects going on from so many people, so many creative people here in Philadelphia, and there's very little connection between them. One of our kind of parallel initiatives to the recommendations is to try to do our best 161 5/7/08 - PARKS & COMMERCE - RES. 080337 to catalogue them and to figure out how best to make recommendations to connect them. And if anything pervaded our discussions in our meetings, it's been that. So, again, I thank you for the opportunity to speak to the Council and for this hearing and welcome any questions.
We appreciate very much the opportunity to hear what the Administration is currently doing in this area. So thank you for taking the time. A couple of questions. Much of what Mr. Blake Jennelle spoke of we also heard in Hassan Charles' comments. Your comments mirror each other in terms of the City getting out of the way to make the lives of start-ups more comfortable, if you will, knowing that you're going to have bumps and hurdles initially anyway, but government can do better by streamlining the access to what's 162 5/7/08 - PARKS & COMMERCE - RES. 080337 required to start the business. So that affirmation was important to hear. The Corzo Center -- and let me thank you for inviting representatives of Philly Startup Leaders. Appreciate that. The Corzo Center for the Creative Economy is scheduled to open, you say, next year. Where?
Physically in our facilities at the University of the Arts. Currently, we have space set aside in the Terra Building for it at Walnut and Broad, but the specific site may change.
All of you have addressed my question, which is a running theme, what role can those of us on this side of the table do to 163 5/7/08 - PARKS & COMMERCE - RES. 080337 invigorate, if you will, an already very, very excited base of those who live in the creative economy. So that question has been answered well. Any final recommendations, suggestions, tips you want to offer us as we continue this conversation once this formal hearing is recessed?
Sure. I just have one thing that you reminded me of as you talked about making the City more user friendly to interact with and streamlining processes. It would be really helpful for start-up companies to have some sort of ambassador or account manager who can buffer between us and the bureaucracy. Personally, I've spent countless hours on hold with the Department of Revenue. I've gotten delinquent tax notices for taxes that were paid or filed. You know, the issue there is not that -- there are always going to be bumps like that, but if you there was a way that someone could help 164 5/7/08 - PARKS & COMMERCE - RES. 080337 us.
Exactly. Yeah, just a go-to person. I have this problem, I just call this person, they take care of it or tell me what I need to do rather than having my people struggling to work our way through it.
Yes. One thing I would state, which has been a theme of our own discussions as well as my own company, is that interacting especially with the 20-somethings and 30-somethings requires a much -- and Hassan kind of touched on this -- almost a much different approach to engaging them, attracting them and then retaining them here in the Philadelphia region, specifically around linking and interacting with their digital 165 5/7/08 - PARKS & COMMERCE - RES. 080337 life-styles. And right now in terms of information gathering or connecting with others or connecting whether it be to other people in your same sector or with the City, the series of websites and things like that, it's very cumbersome and for 20-somethings and 30-somethings who live on their mobile phones, who want information pushed to them, who live digital lives, aren't really reading newspapers, aren't really listening to the radio as much, I think it's very important for the City to take a look at its digital strategy and not make it a sideline. And this is kind of a theme in the media industry in general and one which I deal quite a bit with, is that you can't view kind of digital life-styles or mobile life-styles as a sideline. It really is an integral part --
-- a centerpiece, 166 5/7/08 - PARKS & COMMERCE - RES. 080337 especially for the 20-somethings and 30-somethings. So I would just recommend that that be a centerpiece of any discussions that go on.
I would just say very quickly, I want to reinforce that I see myself here as a representative of the higher education community. I think this city is remarkable for the concentration of art, design and performance facilities, not only in terms of producing students but also in terms of creating a kind of sense of community and creative critical mass around the City. So I think it is certainly important, and I would urge Council to continue to engage, not just the University of the Arts but all of the university leaders in the City in trying to develop strategies to support the development of the creative economy.
Members of our group kind of tend to have a very self-help, just-do-it attitude, and I wanted to highlight a way in which one of our members is innovating to make the City government work better that I wanted to bring your attention, an example and a model for what can become --
Yeah. The project is called iSEPTA, and if Randy will stand up and Alex, who are involved with it over here. They basically took it upon themselves -- they're mobile phone and iPhone users. They made an interface for the SEPTA schedules that you could use on your mobile phone and take it with you, without the cooperation of SEPTA, but not doing anything wrong, just pulling data and repackaging it. 168 5/7/08 - PARKS & COMMERCE - RES. 080337 And there's a lot of people who care about the City enough and are frustrated enough to just build things like this. So to the extent that maybe with these guys you can help them make an introduction into SEPTA and find a way to take advantage of what they're doing and encourage other young entrepreneurs and innovators if they see a problem, to just fix it and not ask for permission, that would be a big help as well.
Okay. Well, make sure you see Joe Meade on my staff, gentlemen. In closing, let me say thank you to Kelly Lee and Rachel Zimmerman, in her absence, who my second year in Council approached me about what we now know as the creative economy, and in her own mind had this vision of little clusters, hubs around the City where you had those in this world just really, really feeding off of each other in a good way. And X number of years later, 169 5/7/08 - PARKS & COMMERCE - RES. 080337 we now have had hearings, which will further guide and instruct us on how the City can do better when it comes to making sure that the creative economy reaches its full potential, what's been established here this afternoon. Thank you for your time and all of what you're doing on behalf of the City. Thank you very much. (Thank you.)
This hearing, I just say for the record, is recessed to the call of the Chair. Thank you very much. (Committee on Parks, Recreation and Cultural Affairs and Commerce and Economic Development adjourned at 3:30 p.m.) - - - 170 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on May 7, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)