2019-145 Stoke Denton Mid-Year UpdateDate: July 19, 2019 Report No. 2019-145
INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL
SUBJECT: Stoke Denton mid-year update
BACKGROUND: After a request for proposals (RFP 6571) process in Fall 2017, City Council awarded a one-year contract for management of the City’s Stoke Denton Entrepreneur Center to Hickory & Rail Ventures (HRV), LLC. HRV began management of Stoke on Dec. 1, 2017. Throughout the first year of the contract, HRV met all contract terms. In November 2018, City Council approved an
extension and amendment to the management contract that will continue until Feb. 28, 2021. The management agreement specifies deliverables and metrics to be provided, including a comprehensive annual report and a semi-annual report.
DISCUSSION:
Mid-Year Report Exhibit 1 is the Stoke mid-year report for the period of December 2018 to May 2019. Since taking over management, HRV has consistently grown Stoke memberships. Between December 2018 and May 2019, memberships grew 23 percent and the percentage of tech/tech-enabled members reached 64 percent. Stoke also conducted a member survey and 57 percent of members that
responded saying their business has experience growth, with many directly linking some of their growth and success to their membership. In the reporting period, Stoke has hosted six Lunch + Learn events, five Wordpress meetups, one startup funding workshop, 20 mentor sessions, and 13 member events.
In addition, Stoke partnered with the City’s Economic Development department, the Greater Denton Arts Council, and TechMill to produce the first annual FlintConf, a conference for entrepreneurs. At FlintConf, Stoke welcomed 85 attendees for a day of networking, speakers, and breakout sessions. Planning is already underway for the 2020 FlintConf. Stoke continues to cultivate relationships with UNT, TWU, NCTC, TechMill, and Denton Angels. Stoke’s mid-year
report also includes some of the organizations future plans, including improvements in the physical office space, the buildout of additional private offices, and expanding programming and partnerships.
Economic Development staff continue to meet with Stoke and HRV management monthly to
review and discuss Stoke’s monthly reports and ensure all deliverables and metrics are being met and discuss ways to continue to develop Denton’s entrepreneurship and tech programming.
Stoke Budget The City’s budget for the Stoke project (Exhibit 2) will be included as part of the Economic
Development department budget. Currently, expenses for FY 2019-20 are estimated to be
$238,460, which is a slight increase from the prior year. This increase is primarily attributed to the increase in rent and operating costs associated with the facility. HRV has initiated payment of
Date: July 19, 2019 Report No. 2019-145
$1,000 per month (beginning Dec. 1, 2018) to reimburse the City for a portion of the rent and operating expenses. The revenue is not included in the Economic Development department budget
presentation but is going into the General Fund. Starting Dec. 1, 2019, HRV will increase their
monthly payment to $2,000. Exhibit 3 shows the fiscal analysis that was performed prior to City Council approval of the contract with HRV in November 2018.
Staff have also initiated discussions with HRV representatives about the transition of Stoke
expenses once the contract expires on Feb. 21, 2021.
ATTACHMENTS Exhibit 1 – Stoke 2019 Mid-Year Report Exhibit 2 – Proposed FY 2019-20 Stoke Budget
Exhibit 3 – Stoke Fiscal Information (HRV Savings)
STAFF CONTACT: Jessica Rogers Director of Economic Development
(940) 349-7531
Jessica.Rogers@cityofdenton.com
REQUESTOR: Staff Initiated
PARTICIPATING DEPARTMENTS: Economic Development
STAFF TIME TO COMPLETE REPORT:
2 hours
Stoke Mid Year Report - Dec 18-May 19
Member Testimonial
“We have enjoyed amazing growth in the last six months at Stoke. We value being at Stoke for the
community and resources that come with the membership. Our team continues to grow every month and
we are grateful that Stoke has the space and membership flexibility to accommodate our growth. Since
January, we have hired 2 full time and 1 part time team members that are working out of Stoke and have
plans to hire 2-3 more in the next couple of months."
Membership numbers
Graph shows total individual members (some companies have more than one person with membership)
1.Total member companies for the month of May 2019 - 70 - 23% growth over December 2018
2.Percentage of tech/tech-enabled members for the month of May 2019 - 64%
3.57% of members that responded to the survey say that their business has experienced growth,
many of them directly linking some of their growth and success to their membership.
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(3 charts above based on May 2019 member survey in which 53% of members participated)
Member Comments
●“Stoke is an amazing place to incubate a startup.”
●“The best thing I've gotten out of Stoke is the ability to interact with other members and learn
about new technologies and best practices. These conversations motivate me to keep being
inventive and seek ways to improve my business and grow my profit margins. You have to be
proactive and Stoke offers a unique atmosphere like no other in Denton for the business
community.”
●“Community engagement has always been a huge win for Stoke. The community is the best part
of Stoke.”
●“As a remote employee of a global firm, Stoke is perfect for what we need. It is also located less
than 10 minutes from our client so it's a perfect fit.”
●“The staff at Stoke are awesome, so accommodating and just super fun people to be around.
Always looking for ways to add value to the members and make Stoke a great place to work.”
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Programming/event metrics
1.Number of educational events/programs held - 7
a.Lunch + Learn - 6
b.FlintConf - Stoke partnered with Economic Development, GDAC, and TechMill to produce
a conference for entrepreneurs. Over 85 attendees came for a day of networking,
speakers, breakout sessions, and happy hour.
2.Number of startup/tech events held - 6
a.Startup funding workshop - 1
b.Wordpress Meetups - 5
3.Number of mentor sessions held ~ 20
a.In April we launched the revamp of the mentor program. It now operates as an office hour
where Stoke members and others from the community can drop in for a chat. We have
regular mentors each day of the week plus a handful of alternates.
4.Number of member events held - 13 total
a.Member Huddle - 6
b.Holiday Potluck - 1
c.Member Happy Hours - 6
d.Community Happy Hour (launched in May for members, angels, mentors, and others) - 1
Members Program Participation - (based on May 2019 member survey that 53% of members
participated in)
Partnership metrics
1.UNT
a.Stoke sponsored UNT Hackathon in early April. We attended the event throughout the
weekend and judged the hacks to select an overall winner and best entrepreneurial hack
winner.
b.We have hosted a handful of meetups of UNT student groups in our space including an
Air Quality Monitoring workshop.
2.TWU Center for Women in Business
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a.Stoke Director is serving on the Advisory Committee of TWU’s CWB
b.Hosted a series of 6 small business workshops at Stoke for their microloan program.
c.TWU Center for Women in Business became Stoke’s first annual sponsor and a sponsor
of FlintConf. They attended the conference to offer information about their mentor,
funding, and research resources for entrepreneurs.
d.Hosted Women’s Rise breakfast series at Stoke, a monthly breakfast with a speaker and
time for networking.
e.Stoke was represented at Elevate at the Denton Public Library.
3.NCTC
a.We have been meeting with NCTC to coordinate a Tech Expo and Career Fair that will
be happening at Stoke in August of 2019
b.NCTC is a member of our space as they work on their Downtown Denton campus.
4.TechMill
a.TechMill worked with Stoke to produce FlintCon, built the website, spoke, and aided in
marketing
5.Denton Angels
a.Held startup fundraising workshops at Stoke in the winter of 2018/2019.
b.Have held on average 3-4 meetings each month. Some of those being in person to see
new companies pitch, others have been phone calls with companies to provide feedback,
conduct due diligence, or to give updates to the full group. We are currently in due
diligence with one company, and awaiting the signatures on the term sheet for an
investment the group is making.
c.A few of the Angels are engaged with Stoke as members and mentors and active in the
startup community we are building.
Marketing metrics
1.Website stats
a.Users are up 7.9% compared to Dec 2018
b.Bounce rate is down 8.3% compared to Dec 2018
c.Goal completions (ie form submissions) are up 103% compared to Dec 2018
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2.Number of blog posts - 16 since Dec 2018
a.Regularity has increased from less than 1 post per month to almost 3 posts per month
3.Social media stats
a.Instagram followers grew by 34.5% since Dec 2018
b.LinkedIn followers grew by 24% since Dec 2018
c.Total social media followers grew by 13% since Dec 2018
d.Social media engagement grew by 146% since Dec 2018
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4.Newsletter stats
a.Subscriber list grew 21% since Dec 2018
b.Average open rate of general newsletters is 47% (Dec-May)
c.Average click through rate of general newsletter is 2.78%
5.Paid advertising
a.Increased paid advertising spend to an average of $620/month (paid ads plus contractor
to help manage advertising)
Future Plans
●Build out private offices inside of Stoke
○Attached is the floorplan drawn by Kirkpatrick Architecture Studio
○The plan details 2 phases of construction, each will add 6 private offices for a total of 12
additional private offices
○Currently, we are waiting on bids from contractors so that we can pursue financing and
build out
○We hope to complete phase 1 later in 2019 and pursue phase 2 in late 2020
●Continue to invest in physical improvements of the space
○Adding a phone call booth and improving the experience in the current phone call room
○Add comfortable work furniture in the event space to increase membership capacity and
experience
●Improve membership experience
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○Change over to a new management software to streamline the onboarding experience
and minimize the number of apps used to schedule/communicate/pay bills
○Work with local businesses to establish perks and discounts for Stoke members as value
add for being a part of the coworking community
●Expand programming and deepen/develop partnerships
○Host FlintCon in 2020 with the same partners as 2019 (TechMill, Economic Development,
Greater Denton Arts Council) and bring in more speakers and content that appeal to the
entrepreneurs of Denton
○Partner with subject matter experts to host in depth workshops, trainings, events on a
variety of topics
■Enterprise Security Sessions with Standard User Cyber Security & Techvera
■TechMill hosted open hacks, technical education, and meetups - including
partnering to host their annual Bootstrap Denton event
■Faculty and staff from UNT and TWU to lead workshop series, panels, and Lunch
+ Learns
Financial Report
(Attached is the complete P&L and balance sheet from December 1, 2018-May 31, 2019)
Furniture/fixed assets
●Picnic tables for patio, sound insulating panels, couches, tables, and rugs for breakout areas
Marketing expenses
●Program expenses include
○Lunch + Learns, Member Huddles & Happy Hours
●Sponsored events
○UNT Hack
●Advertising and Marketing
○Paid advertising on Facebook and Google, printed materials (postcards + banner), &
design software
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Cash Basis Tuesday, June 18, 2019 12:00 PM GMT-7 1/2
Hickory & Rail Ventures
PROFIT AND LOSS
December 2018 - May 2019
TOTAL
Income
Discounts given -2,717.50
Events + Programs
Sponsorships 6,900.65
Ticket Sales 1,343.32
Total Events + Programs 8,243.97
Memberships 81,487.50
Day Pass 95.00
Total Memberships 81,582.50
Unapplied Cash Payment Income 250.00
Venue Rental 783.25
Total Income $88,142.22
GROSS PROFIT $88,142.22
Expenses
Advertising & Marketing 2,848.57
Events + Program Costs 1,167.90
Sponsored Events 500.00
Total Advertising & Marketing 4,516.47
Bad Debt 4,150.00
Bank Charges & Fees 15.90
Contractors 2,350.00
Dues & subscriptions 2,896.25
Insurance -33.00
Kitchen Supply
paper goods 335.51
Snacks/coffee 2,153.41
Total Kitchen Supply 2,488.92
Legal & Professional Services 2,900.00
Meals & Entertainment 339.90
Office Supplies & Software 851.64
QuickBooks Payments Fees 2,294.98
Rent & Lease 5,000.00
Repairs & Maintenance 434.80
Salaries & Benefits
Employer Taxes 4,409.11
Reimbursements 5,750.00
Salary 52,282.16
Total Salaries & Benefits 62,441.27
Special Events Costs 2,258.02
Staff Development 337.68
Travel 5.96
Total Expenses $93,248.79
Cash Basis Tuesday, June 18, 2019 12:00 PM GMT-7 2/2
TOTAL
NET OPERATING INCOME $ -5,106.57
Other Income
Late Fee 467.70
Total Other Income $467.70
NET OTHER INCOME $467.70
NET INCOME $ -4,638.87
Economic Development
Budget Highlights --Stoke
Expenses FY 2017-18
Actuals
FY 2018-19
Budget
FY 2018-19
Estimate
FY 2019-20
Proposed
FY 2020-21
Forecast
Materials & Supplies $836 $1,000 $1,000 $2,000 $2,000
Maintenance 1,384 5,000 5,000 5,000 5,000
Miscellaneous 1,006 1,000 1,000 2,500 2,500
Operations 171,279 199,170 199,170 216,960 118,960
Cost of Service 12,000 12,000 12,000 12,000 12,000
Total 186,504 218,170 218,170 238,460 $140,460
1JULY 16, 2019
Contract ends
Feb. 28, 2021