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Tuesday October 27, 2020
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Rich Chang's Dilemma

His NewFoundry has good jobs for local talent, but where are the applicants?

by Trilby MacDonald

Published in September, 2020

Chang is not your average tech entrepreneur. Instead of spending his days steeped in code or pouring over spreadsheets, he is trying to create the conditions for a tech savvy applicant pool to emerge in Washtenaw County so that he can hire locally. "My focus is business development and community engagement," he says.

NewFoundry creates custom software solutions that range from a HIPAA-compliant cloud-based medtech application used by Michigan Medicine to a custom product configurator which is used by brands such as Sea Ray Boats and Roush Performance.

"We have our hands in a lot of different industries," Change says. "If you are able to diversity you can deal with those ups and downs," And companies are looking for ways to reduce overhead. "Covid has brought to light the operational cost of staff. A lot of companies are closing or downsizing because they can't make payroll."

Chang thinks Ann Arbor has the potential to become a major center of tech entrepreneurship in the country, but there are certain limitations that have to be overcome in order to maximize that potential, and lack of local talent is one. He's currently "trying to hire five new software engineers to handle all of the new work that has come in because of Covid."

Chang attended the U-M himself, but says he finds the grads he hears from expensive and uninspiring. "I prefer to hire from WCC and EMU," he says. "I find them to be better problem solvers because they have had to be scrappy." But he admits that New Foundry struggles to compete with salaries offered by tech startups with deep pockets, particularly in places like San Francisco.

Chang is playing the long game - he hopes to get a second chance to hire some of them. "I think it is safe to say many come back to the area at some point, especially when they want to start families," he says. He wants "to be able to provide workplace

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options for them to get a job here to help motivate that transition back."

He believes that by investing his time and resources in growing the potential applicant pool by cultivating local talent and bolstering the nonprofit sector that serves the community, he is both contributing to the long term success of his company and strengthening the local economy. "We are trying to create our next skilled workforce, collaborating with WCC to get these graduates to be skilled in the areas that are in need," he says. And NewFoundry is willing to train promising applicants with less relevant experience or education, "giving opportunity to those who are typically ignored." He also volunteers his time as a director of the AAATA, United Way, Hands-On Museum, and the Michigan League for Public Policy,

Another concern is the area's dire lack of affordable office space. "We can't attract companies here if there isn't a place for them to work," he says. Swisher Commercial's most recent survey, at the end of last year, found a vacancy rate of less than 6 percent.

Randy Maas, associate broker at Swisher Commercial, says price per square foot of downtown office space can range from $15 to $45 depending on the floor, the age of the building, the size and layout of the space, the location, and whether maintenance and utilities are included. So far, "Prices have not dropped," he says, but "we are seeing more sublease space coming on the market as more employees are forced to work from home."

Chang wishes more wealthy entrepreneurs would take their cue from Duo Security's Dug Song and invest in the community. "There have been a lot of great, successful, and lucrative exits in our region," he says. "However, you can't have a community without a viable economy and if you are hoarding that cash and not reinvesting it in the community, then the community in the end is not going to be any better for this wealth."

NewFoundry does not aspire to be the next big thing. Rather, Chang advises the companies and nonprofits he works with to aim for steady growth. "Most tech companies want to create the next unicorn. We should be focused on making camels. They are resilient, self sufficient, they can deal with whatever crap comes their way."

NewFoundry may not have the razzledazzle of a unicorn, but this camel hit its stride during Covid-19 - and might be hiring long after more glamorous creatures have whinnied away. For more information, visit www.thenewfoundry.com     (end of article)

[Originally published in September, 2020.]

 

 
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