Sarasota might never be the next Silicon Valley. Yet two tech-centric firms, with more than 100 combined employees, recently relocated to the area. What was the attraction?
Editor's note: FloorForce, which handles digital marketing for flooring companies, and Itelagen, an IT support services firm, recently relocated to Sarasota. The moves represent two major economic development victories for Sarasota, partly because the companies, say executives with both firms, relocated to the region to dip into the area's tech-savvy talent pool. This story looks at the strategy behind both company's moves.
Take that Charlotte, N.C. Goodbye metro New York City. Adios, Austin.
John O'Keefe, in seeking to relocate his $13 million IT services company, ditched the Big Apple. He skipped over national business relocation hotspots Charlotte and Austin, and even Tampa and St. Petersburg.
He instead moved his company, Itelagen, from Jersey City to a 6,500-square-foot office in north Sarasota County. The office, in a corporate park a football field away from a Whole Foods plaza under construction, is where O'Keefe expects to strike a dagger in what has been his biggest business challenge: hiring, and retaining, top talent. Itelagen's niche is in doing IT support, network administration and security for medical practices' electronic health records.
“This was a move and a strategy to solve all our problems,” O'Keefe says. “We had a vision to build a special place where people want to come to work.”
Itelagen's new space is in IntegraClick Park, 5901 N. Honore Ave. The complex is also home to web marketing firms ClickBooth and Revcontent. ClickBooth executives, going back a decade, sought a space that delivered a work-hard, play-hard vibe for employees, with a game room, kitchen and other perks. Now those perks are included in Itelagen's lease: access to the 6,000-square-foot game room/arcade; a chef's kitchen and cafe; a gym with showers; and onsite child day care.
It's the type of corporate home O'Keefe always wanted, but couldn't afford to buy or build on his own in New York or Jersey City, where the company was most recently based. “I couldn't have pictured something better than this,” says O'Keefe.
The company has already hired about a dozen people, for IT support and other related positions, and expects to hire about 15 more over the next year, O'Keefe says. Sarasota County officials approved $40,000 in jobs-based performance incentives for Itelagen's move, at $2,000 per job from February 2017 through February 2020. Employees will also be coming from the company's other offices, in New Jersey and Charlotte.
The company initially targeted Austin for a move. Besides being a hotbed for tech companies, the New York private equity firm that has a stake in Itelagen, GPB Capital Holdings, has an office in the Texas capital. Itelagen also could have expanded its Charlotte office. Says O'Keefe: “Florida wasn't in our mind in the beginning.”
Then a relocation consultant told O'Keefe the cost of living would be 20% less in the Tampa-St. Petersburg region than New York, and at least 10% less than Charlotte or Austin. That moved Florida to the front of the line.
O'Keefe knew little about the Sarasota-Bradenton-Lakewood Ranch market. But he and his wife discovered the area while researching Pinellas County schools for a possible move to St. Petersburg. The Greater Sarasota area, he says, looked like a better education option, both for employees with kids and his own family. (The O'Keefes have two young children.)
O'Keefe, with three patents pending in support automation technologies, founded Itelagen in 2005 — his second IT company. He previously founded and ran Fine Point Technologies, which handled automation software for IBM, among other clients. That company grew to $30 million in annual revenue before he sold it. Itelagen, says O'Keefe, had about $13 million in sales in 2016, and he projects it will grow about 10% in 2017.
At both companies, says O'Keefe, hiring enough talented people, in nearly every position, and then keeping them, was his constant up-at-night worry. That was exacerbated, he says, by knowing he couldn't take on additional clients without having the right people in place, so customer service didn't suffer. “Our product is our people,” he says.
In Sarasota, O'Keefe is confident he will slay that obstacle. He recently hired a recruiting/HR manager to find job candidates, mostly through LinkedIn, rather than use expensive recruiters.
Sitting in the Itelagen conference room once recent morning, in shorts, flip-flops and a polo shirt, O'Keefe, who went to college in Buffalo, N.Y., says the Florida heat doesn't even bother him. So far. “I wake up in the morning and I can't wait to get to work now,” he says. “I haven't felt like that in five or six years.”
BY: GRIER FERGUSON | STAFF WRITER
It wasn't just a single factor that brought FloorForce to Sarasota from Boca Raton. It was several — a community of like-minded businesses, a lower cost of living and economic development dollars.
The latter, a $144,000 jobs performance-based economic incentive grant, was given initial approval from Sarasota County commissioners and is now pending a contract agreement. The incentives, paid out over eight years as FloorForce creates and maintains jobs, was a major factor in getting the company over the hurdle of relocating, says FloorForce co-founder John Weller.
FloorForce provides digital marketing services such as websites, reputation management and phone tracking to retailers and manufacturers in the flooring industry. The company plans to add 72 full-time employees over the next five years, adding to its current payroll of 27 people.
The additions speak to the growth phase the company is in now, Weller says. Some of that is attributed to a large contract the company has with flooring manufacturer Mohawk. Weller declines to disclose FloorForce's revenue figures, but says the Mohawk contract will have a big impact.
The idea to move FloorForce to Sarasota, he says, originally came from a newspaper article. Weller was staying in Sarasota and read about area entrepreneur Jesse Biter and Dealers United, a Sarasota-based company Biter co-founded that provides an online marketplace of automobile dealers to helps dealerships save time and money.
Weller met with Dealers United CEO Pete Petersen. “It was the first time in the history of the company I'd met someone doing the same thing in different a vertical,” Weller says.
The well-connected Petersen introduced Weller to other businesspeople in the area's technology sector. “It's amazing to me the network of people here,” Weller says.
Weller then got additional information from the Economic Development Corp. of Sarasota County, including a tour of the area. He liked what he saw, and so did a large swath of employees. Most of the staff, for starters, was commuting an hour to get to work when they were based in Boca Raton. For FloorForce's 27 full-time employees — web designers, developers, salespeople — there were also expenses to consider.
“Employees are pleased with the cost of living here,” Weller says of Sarasota. “Employees were very in favor of moving here.”
There was also a big change in where Weller and his employees work. In Boca Raton, FloorForce was based in an industrial area. Now employees work out of an office at the Bold building in downtown Sarasota, also home to Dealers United. Biter, who owns the building, has spent millions to turn the space into a cool, tech-centric scene. “This building oozes the culture we were trying to develop,” Weller says.
Developing that culture and a staff to go with it has been a process. For a time, FloorForce used a top tech recruiting firm. But Weller says FloorForce got mediocre people because he and others at the company were limited by what they knew about the kind of people they should look for. “I did a lot of self-educating,” he says, reading books and going to events to learn more.
At one point, Weller says the company took a drastic step: it cleaned house and started over with a new staff. It also hired a new recruiter, who Weller ended up marrying. “She changed the company, and she changed me,” he says. “We have been booming ever since.”
Contrast that with FloorForce's start in 2011. “The first two-and-a-half years were hell,” Weller says. “We were educating retailers and manufacturers one by one.”
But FloorForce kept up the education process, explaining to business owners what the company could do for them. “We battled through until we got to the tipping point of retailers and manufacturers,” says Weller.
Now, 1,000 retailers use FloorForce's services through monthly subscriptions. Clients include a range of retailers, from one-person flooring stores to stores with more than 100 employees.
Weller, who says he started the company because he wanted to do something to help preserve mom-and-pop-type independent flooring stores, might have carpet fibers in his blood. His father was the vice president of a carpet mill in Greenville, S.C. The younger Weller has spent 13 years in the flooring industry himself.
“We are supplying solutions that are helping our clients be there at the beginning of the process,” Weller says. “We have to do it better than Home Depot and Lowe's. If you can gain a customer's trust, you've won.”