Patrick Hood brings a “West Coast attitude” to the Midwest, and he’d rather do it here than anywhere else
Patrick Hood isn’t afraid of chemical reactions. The founder of Cornerstone Research Group also doesn’t settle for expected results, both in the emerging technologies he helps create and the new businesses that spring from those developments.
Hood, a transplant to the Dayton region from the technological shores of Silicon Valley, launched his own business that has enjoyed success for more than a decade. He’s also helped many Dayton entrepreneurs realize their dream. Even though economic news often seems bleak, the truth is there are highly successful new businesses in varying stages of development all around the Miami Valley.
“The Midwest is a fantastic place for new businesses,” says Hood. “People still know how to work in this part of the world! Dayton especially.”
Perhaps it’s his outside influence that gives Hood his positive perspective on Dayton’s entrepreneurial scene. Regardless, Hood’s practically cavalier pursuit of new business ventures has given him a reputation as a “serial entrepreneur,” helping countless Dayton-area residents achieve their goals of leading a successful business.
After graduating from the University of California Davis, Hood started working for an applied research facility where he participated in projects for various federal agencies.
“I was living in Silicon Valley during the very heyday of entrepreneurs bootstrapping themselves to new ventures,” says Hood. “It was hard not to get the ‘entrepreneur itch’ when you’re living in that region.”
Hood was inspired and had started the process of raising capital to launch his concept when he received an offer from Wright-Patterson Air Force Base. Realizing this was an opportunity to understand his target audience from the inside out, Hood decided to take them up on their offer and move to the Midwest.
“If you’re going to make burgers, who better to learn from than by working in the burger shop?” says Hood.
After spending some time at Wright-Patt, Hood realized he had the building blocks for his own business. He simply needed a strong impetus. And for Hood, time was of the essence.
“Projects take a long time to launch in the military,” he says. “A long lead time can mean the death of a project.”
Once Hood amassed enough income to venture into the world of the small business owner, he quit his full-time job at Wright-Patt. His years of research and on-the-job data collection seemed to pay off.
“I had about nine months’ savings in the bank. I set up an office in my basement and I just started writing proposal after proposal,” Hood says. “My first year, I got one program, then in January, I got three more. [In] my second year of business, I was at about a half million dollars. From there, I kept up my proposal-writing pace, and we grew at a rate of about 40 percent over the next 10 to 12 years.”
Taking business to the next level
Rather than follow typical procedures for CRG spinoff Nona Composites’ No-Oven, No-Autoclave composite processing, which exists as its own entity now, Hood and his team took a closer look at the product itself and sought to find a way to make it work for them instead of fighting the product’s chemical reaction.
In typical composite creation, heat curing is the final step. But what CRG discovered is the composite itself goes through a chemical reaction that produces heat in a matter of hours. Previously it would take much longer. When CRG observed the limitations of the infusion process, they decided to harness the power of heat produced in the chemical reaction instead of fighting the composite’s natural energy.
CRG came up with a composite technology so innovative it was sought by organizations like NASA. Similarly, Hood and CRG have developed an approach to spinning off new companies by giving small business owners an opportunity to harness their own energy rather than fight it.
Like his out-of-the-mold thinking that inspired quick-setting composites, Hood has been able to successfully harness the creative powers of budding entrepreneurs. CRG not only thrives as a stand-alone business but has spun off several independent companies.
“CRG Industries was my first foray into spinning off a company,” Hood recalls. “It started out as a means of supplying our customers with products they needed to test their business models, but it became so popular that it generated its own demand, so we spun it off into its own company with a functioning board. Now both facilities can interface with one another as we need to nurture new businesses.”
Launching a new company isn’t a completely freewheeling process. There are specific criteria Hood says he looks for in a spin-off.
“I have set of factors—about 33, in fact—that help me get a feel for the viability of the business. I’m looking for investment-grade businesses. You can’t get out and raise funds for a business that doesn’t have significant market opportunity,” says Hood.
Fortunately for Hood and entrepreneur hopefuls, the Miami Valley is just as good a place to start a business as Silicon Valley, even more so if you ask Hood.
“When you can create businesses that can offer the kind of excitement that you can find on [the] West and East Coasts, you’ll get a lot of people who prefer to stay near family, so that’s a benefit,” says Hood. “I can compete as a small company and get talented, hardworking employees—people that I might not be able to get if I were in San Francisco or Boston because there’s so much competition.”
If there were one thing Hood could change about the place he now calls home, it would be the pervasive defeatist attitude.
“Don’t ever lament not being on the coast or a big city like Chicago,” he says. “We shouldn’t try to be like someone else because we’re the best at being ourselves. You can build a company without having to watch your back. We’re different and that’s what makes us valuable.”
Bringing Silicon Valley to the Miami Valley
Cornerstone Research Group founder Patrick Hood shares his top tips for budding business owners:
There’s no safe road. As a business owner, you won’t ever get to a point where you can just coast. You’ve got to plan, present, and repeat. Do that over and over until you’re sick of convincing people your idea will work.
Rely on yourself. Don’t count on people who are relying on you to be successful. You really have to be prepared to risk a lot to accomplish your dream. You might run up some debt and your house might be on the line, but you need to make it happen.
Cash is king. Many ideas will die of a cash-starved death waiting on investors to save them. Then competition moves in and takes your product, your idea, because you stalled.
Stay true to you. Personal and business ethics are paramount to long-term survival. Your relationships are going to pull you through the bad times.