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Local tech firms try to branch out

Broader services combat downturn

Amid the recession, some local tech companies are still finding ways to grow.

360 Professional Services Group, a Web development and design company based in Amherst, recently hired its 14th employee. The company was started in 2005 by three young men whose own employer was shutting down.

While many businesses might be anxious about their prospects this year, 360 PSG is looking forward to steady growth. The company is sticking to its strategy of catering to small-to medium-size companies and nonprofits that want to create effective Web sites, and then help those customers update and expand their sites’ services over time, said Joel Colombo, president and chief executive officer.

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“As their needs grow, we get a lot of satisfaction out of that, helping people grow,” said Colombo, 30, who started the company with Matthew Whelan and Ben Shepard.

About 80 percent of 360’s business is generated locally. The company is trying to attract more customers outside the region by applying the same business model it uses locally. For instance, 360 might develop a Web site for a family-owned business — say, a plumbing company located in another state — that targets customers who live nearby through search-engine optimization.

While 360 PSG is a relatively new addition to the local tech scene, Algonquin Studios in Buffalo is an industry veteran, having been around for a decade. The Web and software solutions company has 40 employees and expects to continue hiring this year, said Stephen Kiernan Sr., chairman and chief executive officer.

Kiernan said that during economic slowdowns, customers often turn to companies such as his to outsource some of their work, in order to manage their costs.

Algonquin has diversified the products and services it offers over time, Kiernan said. “If you’re just a Web development company, you’re probably suffering.”

The company has built a roster of clients outside Western New York as well. It attends trade shows to drum up business, and after being around for so many years, referrals open doors to new clients, too.

Being based in Buffalo has some advantages, Kiernan said. When Algonquin is trying to win business in a place like New York City, it can position itself as a lower-cost provider than its competitors who are located there, he said.

JRVisuals, whose clients have included The Buffalo News, has carved out a niche in digital media, known for its “flash games” for Web sites, as well as working to help companies like Time Inc. complement their print-product offerings with digital offerings. “I think that’s something we’re going to see more of,” said Jose Rodriguez, the founder of the Allentown- based company.

Flash games link a product or advertising concept with a game played on a Web site. The benefit for the advertiser: Users tend to stick around for a little while and receive some kind of offer afterward.

People might spend three to seven minutes on such a game, perhaps during a coffee break, compared to watching a conventional TV spot for 30 seconds. “It’s another way in advertising to get more bang out of their buck,” said Rodriguez, who founded JRVisuals in 1998 and moved it to Buffalo in 2001. It has six full-time employees plus himself.

While Algonquin continues to expand, one Internet- related pioneer in the Buffalo area, Buff- NET, announced early this year it was abruptly shutting down. The Internet service provider had launched its service in the mid 1990s, part of the first wave of companies offering Internet access to residences and businesses.

But Jeff Ross, executive director of InfoTech Niagara, said members of his trade association to whom he has spoken — BuffNET was not a member — have not reported a big dropoff in business amid the economic slowdown. “We don’t get the highs and we don’t get the lows here in Buffalo,” he said.

That could be partly because companies view technology as something essential, enabling them to operate more efficiently, rather than as strictly an expense to be trimmed in lean times, Ross said.

One recurring issue among InfoTech Niagara’s members: finding qualified candidates to fill certain jobs.

“We just don’t have people going into the tech majors,” Ross said.

In some cases, he said, companies end up hiring people who they believe will be a good fit for the organization and then train them in the skills they need.

Ross said schools such as Trocaire College and Erie Community College are offering “hands-on” courses that prepare students to meet employers’ hiring needs. “We need more of that,” he said.

Rodriguez said he has done consulting with area colleges to let them know the types of specific skills employers in the industry are seeking from new graduates.

“It’s tough for these institutions because it is such a fast-moving industry,” he said.

Kiernan, of Algonquin Studios, said his company has found success hiring young people who are natives of the area, as well as graduates of area colleges who are from other places but have become familiar with Buffalo.

Finding talent is one issue. What about cultivating more tech start-ups?

Those types of companies face some of the same issues as any freshly minted business, such as access to credit and crafting a well-thought-out business plan, said Thomas Ulbrich, executive director of the Center for Entrepreneurial Leadership at the University at Buffalo’s School of Management. Several tech company leaders are enrolled in CEL’s program.

Ulbrich said budding entrepreneurs shouldn’t feel discouraged by the current state of the economy. “True entrepreneurs will find opportunity if they’re out there looking for it,” he said.

UB holds an annual contest that promotes commercializing UB-generated technologies, to stimulate the creation of more locally based businesses.