From Rust Belt to Tech Belt with Jack McGowan
Building Buffalo's Startup Ecosystem - (TechXY Turbo, Episode 7)
Jack McGowan is the Director of the Buffalo Angels and Executive Director of the Western New York Venture Association (WNYVA). Over the past two decades he has helped channel millions of angel investment into early-stage companies in the Buffalo/Upstate New York region and led the region’s original startup-investor forum. Earlier this year, he received the Community Catalyst Award at Upstate Venture Connect’s Unleashed Founders Retreat for his longstanding impact on the startup ecosystem in Western New York.
Listen to “From Rust Belt to Tech Belt” below, or on Apple Podcasts, Spotify, YouTube, Amazon, Pandora, or wherever you get your podcasts. The episode transcript is shared below.
TechXY Turbo - Podcast Transcript - (T2 E2)
Frank Gullo: Welcome to another episode of TechXy Turbo. My name is Frank Gullo and I am your host.
Today we’re joined by a guest whose name has become synonymous with the Western New York startup scene: Jack McGowan. For decades, Jack has been the steady hand and open door for entrepreneurs seeking capital, guidance, and connection. He leads both the Buffalo Angels and the Western New York Venture Association, two cornerstones of our region’s startup ecosystem.
In this episode, Jack and I talk about how Buffalo’s tech economy grew from grassroots efforts into a cohesive community of innovators. We’ll unpack what has changed most over his 30-plus year career, some of the startups he has mentored, and what it really takes to build a sustainable innovation network in a region once known primarily for manufacturing and steel.
So Jack, it is so great to have you. We’ve talked about this for several months and I’m glad we’re able to make it happen. So thank you for joining. How are you today?
Jack: I’m great, Frank. So glad to be here. Thanks so much for having me.
Frank: Awesome. So Jack, this is a tech podcast and for everyone who comes on, let’s start with your tech story. You began your career as a commercial banker in the 1980s, a very different era technologically. How has your relationship with tech evolved as you’ve worked with hundreds of tech startups over the past three decades?
Jack: So, thinking through this, I mean, I obviously started in the Stone Age. I mean, everything was paper-based. I mean, really it was just—can’t believe it. I would hand-write memos and they would go to a secretary who would type them on a word processing machine, and then you’d proof them. I mean, it was unbelievable.
Written memos, interoffice mail envelopes that would go from building to building or floor to floor. It was great—we got fax machines, so we were like really, really modern with that. You’d go to the library to do research on companies.
Got the first cellular phone: was this thing that was installed in the car. This big, big heavy thing. And, you know, eventually we got big clunky computers. It was so different, was just unbelievable, thinking about it.
Frank: You bring up a good point. I work in the staffing industry and I tell people sometimes, you know resumes once were on paper, right? And people had to type them or scan them in. I think there’s such a sense of everything working immediately that people forget a lot that built the system that’s still there.
Let’s advance past the Stone Age and go back to 2009 when Bright Buffalo Niagara launched. I actually think that’s when we met, because I was involved in the planning board for those events. So for you, the question: what were the tech companies like back then circa 2009? What kinds of technologies were entrepreneurs building and how has that changed over the years as you’ve watched the ecosystem grow?
Jack: Yeah, so when we started, Western New York, Upstate New York, has always had a diverse base of technologies. We’ve never really focused on one or two particular things, so that was the case then.
But there were areas of emphasis that have shifted a little bit. When Bright Buffalo Niagara started out, it was largely sponsored by UB. And so there was more of an emphasis on biomedical companies. There were companies that were at the Center of Excellence in Bioinformatics and Life Sciences and the Buffalo Niagara Medical Campus and Roswell Park and Hauptman-Woodward.
Technologies that were coming out of there: drug development and diagnostics, medical devices. But there also—there was a lot of healthcare IT, other software companies, you know, B2B software, online marketplaces, advertising tech, social networks, apps, materials, ed tech, electronics, a variety.
And then you’d have some real just kind of traditional stuff, food products, or recycling of rubber tires or, you know, a real variety of stuff. But there was more of an emphasis at the time on, you know, the medical side, which has sort of slipped away a little bit, I think, compared to what we’re seeing now.
Frank: . Let me dig into that a little bit because I remember that too. The heavy bioinformatics focus in the branding. You’ve seen at least I think a hundred companies at Bright alone, plus hundreds more through Western New York Venture Association and 43 North. So to your point, what tech sectors have you seen come and go? And of the emerging techs, which ones really delivered on the promise?
Jack: Yeah, so, it’s interesting because there have been different technologies, but my focus and the focus of investors is really on the businesses rather than the technologies themselves.
One of the big differences is from an investor standpoint as a community, there’s not a lot of money and risk tolerance is relatively modest here compared to some other areas. Something that was real, I think really was spot on: there’s a firm out of—based on the West Coast called StartupIQ that was in upstate New York last week for the New York Innovation—Annual New York State Innovation Conference. They wrote a piece about it when they came back.
On the plane back, the differences between upstate New York and the Bay Area. Number one was the amount of funding. But also the community in upstate New York worked very much together. They drew that distinction between the West Coast, it’s scale or die companies. They consume a ton of money. They raise a lot of money. It’s go big or go home.
Whereas in upstate New York, we’re looking for companies that have an actual path. They’ve identified customers. There’s a path to profitability in a couple years because that next round of capital is less likely to be there. So, even though they’re based on a technology, the focus is more on kind of basic business blocking and tackling rather than we’re making plays in technology areas. And we can throw a lot of money at a number of players in that space and one or two of them are going to win, and we’ll come out ahead of the game. So it was very, very different. And the tech focus versus business focus and the founder’s qualifications and what traction had they got so far. So that’s a distinction that we have compared to, and I think a lot of the country has compared to New York City or the Bay Area.
Frank: That’s a very helpful distinction. Thank you for drawing that out. And certainly if you’ve gone to 43 North over the years, you’ve really seen how polished and advanced some of the firms are. And speaking the business side and the funding—one of your specialties is helping startups access funding, including federal grants, specifically for tech research and development. Can you explain what kinds of tech innovations these grants typically support? And for you, what’s the coolest tech you’ve ever helped a company get funded to develop?
Jack: Sure. So the big program is a federal program called SBIR—Small Business Innovation Research. As the name implies, the federal government is looking to fund innovative research and development, with strong commercial potential. So not tech for tech’s sake, because it’s taxpayer dollars. They’re hoping that if the development is successful, there will be successful businesses behind that as well. They have a wide range of topics.
Eleven federal agencies participate and they’ve got the Department of Defense, National Institutes of Health, Department of Agriculture, National Science Foundation. So they’ve got different areas of interest. They’ll fund a very broad—whatever you’re working on, if it’s a legitimate technology, there’s probably an opportunity to apply for something there.
The bulk of the money through this program is through the Department of Defense, so a lot of it is defense-related stuff, but, for instance, healthcare funded by Defense is huge because they’ve got needs for taking care of their warfighters and what have you.
Healthcare is big through other agencies as well through SBIR. Advanced materials is another big one. Energy, Education is another big one. So it’s a great program for early-stage development that, without it, a lot of the technologies wouldn’t get the chance to be developed.
As far as the most interesting one that I worked with, I guess I’d pick a company called Helios NRG. They grow algae. You know, they’ve got a refined system to increase the productivity of growing algae. And one of the benefits of that, well, number one, it captures carbon. So it has an environmental component of taking that carbon and converting it to algae which can then be used as feedstock. It can be made into biofuel, it can be made into nutraceuticals. So it’s got many potential uses. And they’ve gotten several grants to refine their processes of production, scale it up, those types of things. So it was a pretty cool company.
Frank: That is great, thank you for that. Those are rich nuggets, so everyone listening will have everything Jack mentioned in the transcript for future reference. Speaking again of the business side, so you’ve mentioned seeing a lot of change over the 30 years working with companies and you’ve seen multiple tech innovations as all of us living through it. Hardware, manufacturing, the internet, now AI. So especially on the business side, how have these innovations changed the way startups operate and show up, and how has it affected what investors are looking for? Or hasn’t it, is it the same?
Jack: Well, it has a lot. The advances in technology have really raised the ability and the expectations for being able to get to market, develop more quickly, do things at lower costs, be more efficient, and be able to get the word out in ways that you couldn’t do with all the communication technologies and social media. So, in order to be competitive, startups need to be using these technologies. Again, they’re not necessarily, in some cases, developing a new technology, but they’re users of the technology to effectively establish and grow their businesses.
Frank: Makes a lot of sense. So I want to talk a little bit about our ecosystem. We’re both in Buffalo and, Jack, you and I have crossed paths many times over many years through the Buffalo tech community, and I’ve always valued your insights and friendship when we’ve had time to connect.
One thing I’ve noticed is you’ve always been incredibly consistent in helping entrepreneurs understand that with their tech, no matter how high-tech it is, it’s both the tech and clearly articulating it, explaining it. So from what you’ve seen, what tech communication challenges have you seen founders struggle with the most?
Jack: Sure, yeah. Many times founders’ background and experience is tech, it’s what they’re developing, and you’ve got the classic, you know, there’s engineers, there’s marketing people, and they don’t think alike. Sometimes, that’s the case.
So I think a big part of it is focus when communicating: you need to focus on the audience. What will the audience understand? What’s important to the audience? How do I explain it to an educated layperson or to my grandmother at Thanksgiving dinner? She needs to understand what this thing is and what it’s supposed to do. So that’s an important part of it.
Kind of an approach I always take—I’ve learned—is that when explaining, it’s talking about the benefits. What is the—I can explain the details and I some features—but what is the benefit that it’s going to provide to the user? And then what’s the real reason—what’s the reason—that a user should believe that this can actually provide those benefits? So, support it somehow, we’ve—it’s been tested or, it’s in use in a lot of cases or something that—so why do I believe that, you can provide this benefit with this product or service.
And then also what—what’s different about it? If it’s just a “me too,” you’re probably not going to do much and make much noise in the marketplace, because there’s others out there already doing it. So, what’s special about what you have? So you can communicate that overt benefit, the real reason to believe, and the dramatic difference, it’s an effective way for targeted audiences to understand what it is you’re talking about.
Frank: Makes sense. Do you feel the charisma of the founder—as a follow-up—makes a lot of difference? Have you seen these larger-than-life founders able to convey by how charismatic they are?
Jack: Yes, but sometimes that’s a problem. There is a risk of falling in love with the founder and their presentation skills. I mean, obviously they need to be good communicators if they’re going to sell and if they’re going to motivate people on their staff, whatever. But you need to really make that distinction about what they’re telling me—the straight story, or are they just spinning a good tale? You need to be careful.
Frank: Right, right. Great. So I work in tech and sometimes I feel overwhelmed with all of the tools that we have today. From your side of things, I’m wondering what digital tools and platforms most make the whole ecosystem work? Like how do the founders apply? I know here we have 43 North, but beyond that, how do mentors connect with them and how do the investors get information? What’s your role and how do you keep track of it all? It seems like a lot of information to harness.
Jack: It’s a mix and it’s evolving. Most groups will have some sort of an online platform that companies can apply to. What we use—there’s one called Gust that a lot of groups use and founders can submit an application and upload their documents and videos and their pitch deck and what have you, and then our members have access to that information.
Some groups (like a VC firm) might have a proprietary application through their website. There’s a number of them. There’s also a lot of Excel and email. I mean, that’s still most of the contacts I get from founders who are looking to raise money, it’s email. That’s still the number one thing.
And I use Excel to track a lot of the information about our group. So it’s a mix. For every company, I recommend that they set up a deal data room that’s with their pitch deck, their financials, their projections, business plan, targeted customer lists and the kind of stuff that investors will want to see in due diligence. And there are some commercial ones. There’s a local company called Finta that is a platform where companies can put up their information, investors can have access to it. And there are some others as well. There’s a local company called Verivend that processes payments and also stores documents on deals. Some use Airtable and Google Docs and there are different ways of having that information stored and accessed to people who need it.
Frank: Thanks for that and that level of detail. So we’re sitting here mid-November, and it was about a month ago when we gathered for the 43North Finals at Shea’s, and, for those that don’t know, it’s quite an awesome spectacle, that founders’ final night. When you’ve watched tech founders pitch at Shea’s over the years in front of 3,000-plus people, what tech trends in your opinion have dominated the competition over the years and what surprised you over the years?
Jack: Similar to what we experienced with the Bright Buffalo Niagara Forum, there was more biotech in the earlier years of 43North than there is now. And I think the reason for that was biotech just takes so long and so much money to develop. I mean the bigger the problem, the bigger the potential benefit, but also the longer it takes and the more money it takes and what have you.
I think that through experience, they found that it wasn’t as much of a fit with the community as they had hoped. A big emphasis now at 43North is companies that are a fit with the Buffalo community. If a company comes here, are there potential customers here?
Particularly if it’s business-to-business, are there companies that could be potential customers or collaborators, or if it’s a company that’s going to need to manufacture a product, are there manufacturers in Western New York that they can be connected to? So the Buffalo fit has become a higher criteria. And it disqualifies certain types of companies where we just don’t have much of a presence here. It’s also been a shift with Top Seedz winning a couple years ago, which is a food company.
Frank: I have those in my house!
Jack: Everybody does. They make a wonderful cracker. It’s kind of a unique thing. You know, so people were at the end of that show, everybody was like, “I can’t believe they won!” Because the focus had always been on tech companies. But given the success of Top Seedz, they’ve expanded their operations here, and they seem to be doing quite well. More consumer product and food companies are making it to the finals. Another company, Food Nerd, was a winner last year. And there are others. So they’ve demonstrated a fit and that it works for the model of 43North.
Frank: Yeah, and it also goes back to your earlier point about business maturity and the ecosystem and scale, right? Where the maturity is evident over 10-plus years. And this is getting into the exciting part of the talk, so let’s talk about some wins. Jack, ACV Auctions—a great story, you know, became Buffalo’s first tech unicorn, went public—and other portfolio companies have grown significantly. So for you, from your insight, what technologies were these successful companies building and what patterns have you seen among the tech startups that thrive here versus those that have struggled or had to leave?
Jack: I think, again, it tends to be business reasons rather than the technology. I think companies that are users of technology, they’re not necessarily developing a platform technology, they’re not ChatGPT, but maybe they’re applying AI to solve a problem for potential customers.
So there are some examples companies that have been successful: we’ve got Campus Labs. They were a company that had software to offer a product for colleges and universities, and they were successful and got acquired, they’ve grown nicely. You already mentioned ACV, they started out as an app to auction cars between new and used car dealers. It wasn’t extremely novel technology, but they understood their marketplace and once they started to get a base of the business, they have continued to evolve their product offerings. So now they have hardware that can detect the status of the condition of the vehicle by listening to it. It can assess the health of the vehicle. They provide services to facilitate the transactions around exchanging titles and that kind of stuff.
So they’ve taken that initial core, which they used to get into the marketplace, and they’ve expanded out using various technologies, some which they did invent themselves, but not how they started off as they were a software app to start with.
There are others. Liaison is a company that started here and was successful. They were a marketplace for employee benefits where an employer could offer a variety of benefits that their employees could choose. So, not necessarily technologically earth-shattering, but applying technology to solve a problem that people were willing to pay for.
There have been a few that are biomed, medical—and a lot of that is does it work? Does it cure the condition or whatever. That’s the big part of it. And there’s some others. Spark Charge was a 43North winner. For a mobile vehicle—like EV charging service, which hadn’t been done before. They’ve got some technology in their hardware, but there’s also the service component. So the business skills of the management team and the ability to execute and the ability to pivot and expand are, I think, really key factors, rather than the initial core product or service or technology that you’re starting with.
Frank: Great points, and it keeps coming back to business and the importance of that for growth as well as scale.
So, Jack, you recently received the Community Catalyst Award from Upstate Venture Connect for your decades of service to founders and investors. What does that recognition mean to you personally, and what advice would you give to the next generation of community builders who want to create the same kind of impact?
Jack: It was a wonderful honor. I was very, very humbled by it. I’m glad for the recognition of being and doing what I love to do. That’s the whole reason why I’ve been doing this for as long as I have. And that I’m hopefully helping founders to be successful or increase their chances of success, for both the benefit of them and their company, their employees, and for the community as well. That’s the higher level. Why I do what I do.
I’ve also been very lucky to work for an organization, Insyte Consulting. We’re a not-for-profit economic development-purpose company. Other people tell me, “Well, you’re always here.” And I’m like, it’s my job. A lot of it is I’m doing stuff nights and Startup Weekend and I’m volunteering a lot of my time as well.
But at the core, I’m allowed to do this because it’s my job, which is wonderful. And I’ve also had the support of my family too, which is very important because without that it wouldn’t work. And one of the great things—each founder or investor or ecosystem partner that I engage with, I’m learning. I’m always learning about a new technology, a new market, or a new practice.
And then I can kind of take the best of those and without disclosing anything confidential to anybody, I help others by learning from what’s working for some and what’s not working for others. So hopefully raise the tide and have more be successful.
It’s interesting, there’s Brad Feld, and he’s got his “give first” mantra and , through Techstars, the Mentor Manifesto. I would encourage everyone to take a look at that, it’s really good stuff, treating people with respect and not acting like you know it all. There are quite a few bullets there. But the interesting thing is that I hadn’t read those until fairly recently. I was looking at them like, “Well, this is just the way, there’s nothing revolutionary here. This is just the way people should treat each other, and how you should work effectively.” It was very reinforcing to see the stuff I’ve been doing and the approach that I take has been kind of codified and expanded and publicized through some pretty big-name people in Brad Feld and Techstars.
Frank: We’re going to link to that. Thank you for mentioning that. And Jack, thank you, thanks to Insyte, and thanks to your family for making you available for all these 30 years. We’ve all benefited and we hope that you’ll continue to thrive.
Last question I want to get into. First, it’s been a real pleasure having you and hearing these insights. A lot of people have asked me about starting a company. And I’ve been like, “Well, let’s just record Jack so you can hear it from Jack.”
You’ve been a mentor and connector for so many in our region’s tech ecosystem, myself included, and I want to thank you for your decades of leadership for continuing to champion entrepreneurs and innovation in Western New York.
Where can listeners connect with you and learn more about Western New York Venture Association, Buffalo Angels? I know you know the ecosystem so well, and we assume everybody kind of hears of it, or they go to 43North, but there are people who—it’s brand new, right? They move here. So for those who are new who may not know the backstory like we do, or transplants, what would you say? How can they reach out to you? How do you prefer to be connected with?
Jack: Sure. You know, they can find me on LinkedIn (https://www.linkedin.com/in/jackamcgowan/). If you search Jack McGowan or Jack McGowan Buffalo, I will pop up, you know, pretty quickly. Feel free to connect and reach out.
You can also connect with through email, through that site or my work email is listed on my LinkedIn profile. I encourage people to contact me. I will talk to everybody. And if I can’t help them, which again, many times I can’t, I will do my best to make introductions or point them in the direction of the other resources in the community.
I like to say that when I started doing this, you could count the supporters of entrepreneurship in Western New York on one hand. Now, the ecosystem has grown amazingly. So, you know, I can point people in the right direction. As far as other potential funders or programs that provide assistance and guidance, a lot of times that’s the most value I’m adding — pointing founders in the direction of the right people who can help them out.
Frank: Great. And with that, Jack, thank you for all of your wisdom and insights and looking forward to doing this again sometime. Thanks.
Jack: Right. Thank you, thank you so much. It’s been such a pleasure.
