Episode 58: Silicon Valley Born, Midwest Made: Nexient Selects Columbus, Ohio for Delivery CenterMay 9, 2019
This week, we bring you the story of Nexient, a digital product services company that was born in Silicon Valley, but has expanded rapidly across the Midwest. In March 2019, the company announced its newest center will be in Columbus, Ohio, where the company will add more than 200 jobs over the next three years. To get the full story, we spoke with Colin Chapman, Chief Delivery Officer with Nexient and Matt McQuade, Director of Business Development for Columbus 2020.
Patience Fairbrother (DCI): Software delivery companies operating in the U.S. face a significant challenge. They need software engineers. And they need a lot of them.
Andy Levine (DCI): According to a 2019 report from jobs site CareerCast, Application Software Engineer is the most in-demand job in America right now – and with the labor market as tight as it is, it’s not getting any easier. Not to mention, the cost of salaries alone can be prohibitive.
Patience: Many companies turn to offshoring to source labor and cut operating costs. But Nexient, the company at the center of our story today, thinks it found a better solution: take Silicon Valley innovation and make it in the Midwest.
Andy: So welcome to episode 58 of “The Project: Inside Corporate Location Decisions.” I’m Andy Levine of Development Counsellors International.
Patience: And I’m Patience Fairbrother also with DCI and Andy’s co-host of “the Project.”
Andy: This week we bring you the story of Nexient, a digital product services company that was born in Silicon Valley, but has expanded rapidly with delivery centers across the Midwest. In March 2019, the company announced it’s newest center will be in Columbus, Ohio.
Patience: The company started in 2010 with about 10 people, and first expanded to the Midwest with a delivery center in Ann Arbor, Michigan. Here is Colin Chapman, Chief Delivery Officer at Nexient, on that first expansion.
Colin Chapman (Nexient): We’re trying to deliver our services obviously in a more cost-effective manner, then what can be possible on the coasts of the country these days where much of the cost of living can be quite prohibitive.
So the company was founded on this idea of Silicon Valley innovation brought to you through Midwest Delivery. And Ann Arbor Michigan was our first Midwest delivery center. So we’ve got about a 500 seat center here.
Patience: Silicon Valley Innovation brought to you through Midwest Delivery. That’s Nexient in a Nutshell.
While many of Nexient’s competitors are offshoring their delivery centers, Nexient maintains a 100% US-based model – and stays cost competitive by locating in the Midwest where costs are lower than on the coasts.
Colin: So much of IT services have gone offshore and so many of our customers have had such bad experiences trying to develop software, you know, using an offshore model that they really find our model refreshing where they know everybody is going to be in a similar time zone, they’re going to be in the same country.
Andy: Thanks to this strong value proposition, the company has grown from 10 to 500 employees in less than 10 years and now has operations in Indiana as well as Michigan.
Patience: The idea of establishing multiple delivery centers throughout the Midwest is to be able to serve customers more quickly. At any given time, Nexient wants to have multiple labor markets of software engineers to pull from. And that was the goal behind this latest expansion. We asked Colin about the top factors Nexient considered for the location decision.
Colin: The first thing when it comes to where you’re going to locate a product development center, you’re trying to find some place you can get great talent. That’s what this business is all about. So first and foremost is where can we find excellent technology talent. So in doing so, you’re looking for established companies that are currently hiring the kind of technology talent that you hire because you want to know that there’s an ecosystem from which to hire experienced talent. You’re looking for a strong university ecosystem. You know, it’s an educated workforce you need to perform these kinds of services.
You’re looking for, you know, reasonable cost of living. You know, we’re not trying to be the rock bottom cost of living, but we are looking for the more reasonable cost of living that also balances a great quality of life. At the end of the day, you know, we often do relocate people from other parts of the country to our product delivery centers. And so you’ve got to be located somewhere that people are attracted to that people would be willing to move to join you.
Patience: So the top factor for Nexient was obviously quality and availability of talent – but cost of living and quality of life were also significant factors. So where else did they consider location?
Colin: We looked at Indiana, we looked at Michigan, we looked at expanding in Michigan even more than we are expanding. We’re still going to do some expansion in Michigan, but we looked at maybe even doing bigger expansion in Michigan. And then we also looked at Ohio and ultimately settled on a Columbus.
Andy: So how did Columbus first come on the radar as a potential location? Those of our listeners in the business of economic development marketing will be pleased to learn that it was the EDO’s digital content that first put Columbus on the company’s radar screen. Here is Matt McQuade, Director of Business Development for Columbus 2020.
Matt McQuade (Columbus 2020): I’m in charge of our North American business development strategy. That means I work with our research team to identify where growth’s occurring, work with our marketing team to get in front of companies driving that growth, and then work with our project team to locate those companies in Columbus. And Nexient is actually a really great example of a company that went through this entire process. Our research team identified them, we put our marketing content in front of them in a variety of ways, and then our business development and project team took over from there.
Patience: Columbus 2020’s research team identified Nexient, and the marketing team starting targeting them with digital ads on LinkedIn and Google in June of 2018. Fast forward five months to November 2018 and Matt has a phone call with Colin of Nexient. This five-month turnaround is remarkably fast.
Matt: …normally, it can take a couple of years for us to be reaching out to a company before we’re actually able to get our foot in the door. And then, there has to be a project at that point as well, and if there is, that can take several years on top if. So, from beginning to end, this is about as fast as you can get.
Andy: It just so happened that Nexient was exploring a new delivery center at the time of the phone call. But it wasn’t quite that easy. Here’s Matt again.
Matt: So, the timing was perfect but it also represented a challenge for us because they’re growing so quickly and need to add so many people to keep up with their demand and their growth. It was probably easier for them to just continue growing in Ann Arbor, even though that could represent some challenges because you’re continuing to keep most of your eggs in one basket. So they needed to hire very quickly and we needed to be able to react to that and put together a deal as fast as possible. So, it was perfect in the sense that we connected with them while there was a deal, but we also needed the equipment very quickly in order to win.
Patience: Talent was the top factor for Nexient. And that’s really where Columbus had to work to stand out. There were really three things they did to convince Nexient that Columbus has the talent it needs.
#1: They stepped out of the way, and let employers give them the unfiltered picture of the talent climate.
Colin: They did a very good job with connecting us to very large employers in the area that hired similar talent to ours. It was very refreshing to see employers in the area that, you know, might have looked at us as talent competition and not wanting us to come in. On the contrary, were excited about us coming in and were excited about the idea that you know, that we are going to continue to grow Columbus as a technology workforce as a place that’s a great place to live for a technology workers by adding, you know, yet one more great technology company to the area.
Andy: Rather than seeing them as competition, the companies Nexient met with were happy to talk – and Nexient greatly appreciated their candor.
Colin: These are quite senior people in their organizations. And while they are very interested, I think, in helping the Columbus region grow, on the one hand, they certainly, I think, don’t feel, you know, beholden to paint a picture that doesn’t exist that way. And they did not, right? I mean, you know, we got a very candid picture, which is exactly what we were looking for. We needed to know both, you know, the strengths and the good parts and also the struggles. You know, where are we going to struggle and what’s going to be hard? And it’s really helpful to be able to have those kinds of very candid conversations up front.
Patience: Talent development is a core part of Nexient’s model. They’re committed to investing in the next generation of American software professionals and training them from the ground up.
That brings us to #2. The second thing Columbus did to stand out is they brought university partners to the table. Here’s Matt.
Matt: We also had to put them in front of educational institutions to talk about graduate pipeline and where their students go and what kind of fields they’re going into, and allow them to figure out how many computer science engineering graduates and software developers they could pull out of Ohio educational institutions.
Andy: Beyond just getting Nexient in front of higher ed partners, it was important that Columbus worked with them to provide relevant data. So in Salt Lake City, I interviewed ten consultants and nine of them kept putting access to and the quality of talent at the top of the list of any site location search. Jay Garner was the exception.
Patience: When you had the company meet with the higher ed partners, what kinds of information were they looking at, and did you prep them in any way to kind of make sure that they had the right information and data available?
Matt: That’s a great question. And with Ohio State, that can be a challenge because it’s so big, and it’s not like Nexient is just going to look to hire somebody with a computer science degree, they made it clear they’ve had a lot of luck finding graduates with a liberal arts background that may have some fringe skills that can be easily trainable into software development, so we had to get all that information with Nexient and then, with Ohio State, work to get the right kind of faculty and staff into the meeting.
And from that point, once we got the right people, it was just a matter of making sure they were prepared to talk about their curriculum, how large their different programs and departments are, how many graduates they have, and then where they’re going to work. Are they staying here? If they’re staying here, who are they working for? If they’re leaving Columbus, where are they going to work for?
Andy: And finally, #3, Jobs Ohio came in at the final hour and sealed the deal for Nexient with a talent training and recruitment package. Here’s Colin again.
Colin: So JobsOhio will be helping us identify and train talented software engineers. So again, is the core and key to our business. They were, as I said before, very welcoming, very excited about helping us and you know, we were quite impressed with the staff they have on hand to help with things like recruiting and marketing of our jobs to the larger Columbus area.
You know, the hard part about coming in as a new business to any new area is people don’t know you. And particularly, the talent that we’re after is highly sought after. So they can be very selective about the employer they choose to work for and a company that they’ve never heard of can be quite scary. And I think we’ve got a tremendous value proposition for our employees. But you’ve got to get it out there and you’ve got to get it in front of people. And JobsOhio will be helping us with that.
Patience: The talent issue was front and center in this deal. But before it was final, Nexient wanted to make sure they had a good business case in terms of the cost environment, and that they would be able to find a facility to fit their needs.
Colin: You know, yeah, there’s still a lot that has to be figured out. We have to, you know, mechanically make sure that we can make it all work. I think the state of Ohio certainly coming to the table with incentives was extremely helpful. And you know, also the whole issue around, you know, facilities and feeling confident that we were going be able to find physical space. I’ve talked a lot about talent because I do believe that’s kind of the number one stumbling block. But secondarily, having a good economic environment around, you know, tax incentives and just, in general, the tax environment and facilities that you got to be confident that you’re going to be able to find someplace to house people.
So, once we were kind of confident, I think, on all three of those, I think it really came together.
Andy: So we got the scoop on why Nexient selected Columbus. But there was one final question we had for Colin and Matt…
Patience: So I have to ask, you have offices in Ann Arbor, you’re going to be in Columbus, how does it feel being at the center of the greatest sports rivalry in North America?
Colin: Yeah, you know, it’s an interesting topic. We did a visit, actually, to Ohio State. Oh, I think it was in January. Matt took us to meet with some of the comp Psi, people at Ohio State. And, you know, of course, the topic comes up and I kind of joked that Matt promised me there’d be no discussion of football since Ohio State had just beat us pretty badly. And you know, ironically, I’m a Michigan grad and Matt is an Ohio State grad, so.
Patience: Wow. Okay. So the plot thickens.
Colin: Yeah. Yeah. And Matt conveniently did not mention that the first few times we met, but it seems like half of Columbus actually has an Ohio State grad.
Andy: According to Matt, it was pretty difficult not to bring it up given the timing of their first call.
Matt: So, my first phone conversation with Colin was the last week of November, and that date’s going to always stick out in my mind because I’m a proud Ohio State alum, Colin’s a proud Michigan alum, and our first conversation was the Monday after the most recent installment in that rivalry.
Colin let me know…he was pretty impressed that I managed not to bring the game up, but I had to go with my profession first on that Monday, and it probably did bode very well for me that I didn’t try to rub in the game at all. Although, Colin seems like a very good sport, so it may have been okay, but still. Good that I didn’t.
Patience: Steering clear of the topic of football may have been the key to this win. But now that Nexient will officially have facilities in both locations, the rivalry can recommence.
Steering clear of the topic of football may have been the key to this win. But now that Nexient will officially have facilities in both locations, the rivalry can recommence.
Colin: I think it has a fun aspect to the expansion. I think it’ll be kind of a fun rivalry, you know, once we really start to get scale in Columbus, which, you know, I expect we will here fairly shortly. It’ll be fun. At the end of the day, I’ll have responsibility for both centers, so I’ll have to try to be impartial. But you know, I think they’re both going to be great centers for us.
Andy: So there you have it. Nexient expects to hire over 200 new employees in Columbus within the next three years, where they’ll have a friendly rivalry with their colleagues in the Ann Arbor office.
So we are up to the takeaways portion of the episode. Patience, you spoke with Colin and Matt – what stood out to you in this episode?
Patience and Andy: Discussion of Key Takeaways
Andy: So that is a wrap on episode 58 of The Project: Inside Corporate Location Decisions.
Patience: We want to thank Colin Chapman of Nexient and Matt McQuade of Columbus 2020 for taking the time to share their stories with us.
Andy: The Project is sponsored by DCI. We are the leader in marketing places and have served over 450 cities, states, regions and countries. You can learn more about us at aboutdci.com.
Patience: We hope you’ll keep listening – there are many more projects to come.