2018-071 Mid-Year Stoke Denton ReportDate: June 15, 2018 Report No. 2018-071
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Mid-year report regarding Stoke Denton
EXECUTIVE SUMMARY:
After a request for proposals (RFP 6571) process in Fall 2017, City Council awarded a contract
for management of the City’s Stoke Denton Entrepreneur Center to Hickory & Rail Ventures, LLC
(2017-371). Hickory & Rail Ventures began management of Stoke on December 1, 2017. The
management agreement specifies deliverables and metrics to be provided, including a
comprehensive annual report prior to contract review in November 2018. However, City staff and
Hickory & Rail Ventures staff agreed that a mid-year report would be beneficial to keep
Councilmembers up to date regarding Stoke’s operations and performance.
DISCUSSION:
Since taking over management of Stoke on Dec, 1, 2017, Hickory & Rail Ventures has increased
membership by 17% while maintaining the percentage of tech and tech-enabled members at 62%.
According to a member survey conducted in May 2018, 57.9% of respondents report that Stoke is
“better” since the management changed in December. Stoke staff is cultivating active partnerships
with UNT, TWU, NCTC, TechMill, and a new Denton investor group. Partnership highlights
include the inaugural meeting in June where investors will hear pitches from Stoke members and
a Tech Hire job fair in conjunction with NCTC at Stoke in August.
City and Hickory & Rail Ventures staff meet each month to review and discuss Stoke’s monthly
report and ensure that all deliverables and metrics are being met under the management agreement.
From December 2017 to May 2018, all specified deliverables and metrics have been achieved.
CONCLUSION:
Staff will be presenting a work session to City Council regarding Stoke’s annual performance in
October 2018 and the annual review and renewal of Hickory & Rail Ventures’ management
contract will be brought to Council in November 2018.
ATTACHMENT(S):
Attachment 1 – Stoke Mid Year Report
Attachment 2 – Stoke Profit and Loss Dec. 2017-May 2018
STAFF CONTACT:
Caroline Booth
Director of Economic Development
(940) 349-7751
Caroline.Booth@cityofdenton.com
Stoke Mid Year Report
December 1, 2017-May 31, 2018
Stoke Member Company Financial or Employment Growth
Member Testimonial - “We have been members of Stoke since it opened (about a year and a half after
we started our business), and it’s been a great fit and benefit to us as a small business here in Denton.
We’re not the typical fast-growing-looking-for-investors “start-up” that you typically hear about in the
media – we’re a slow growth long term oriented business earning our money through client work instead
of raising our money through investors. And although it may be slow we’ve seen only positive growth over
the past almost 3.5 years that we’ve been operating. Our gross sales have increased each year:
2016 - 1,035% Increase
2017 - 43.3% Increase
2018 - 15% Conservative Projected Increase, 35.5% Aggressive Projected Increase
In addition, this past year we were able to change our business structure from a General Partnership to
an LLC, we became W-2 employees and started paying ourselves regular salaries plus distributions
(instead of just distributions when we had the money), and we added a part-time developer to our team.
Also outside of building our business, we’ve had the opportunity to push the entire Denton community
forward by helping advance other local businesses through both the services we provide, and by finding
ways to partner with other businesses allowing them to sell jobs that they would have otherwise not been
able to get.”
Member Testimonial - Stoke has another member that has accomplished some big milestones in the
past 6 month that have also set them up for some anticipated milestones in the coming months. Those
include:
○Official Launch of their platform in January 2018
○Acquired an app with 500K users
○Launch of Yacht Surfing International in September 2018 – anticipated 250K user growth
○New partnerships with Rafting Magazine publication and multiple national outdoor
product companies
○2018 Launch of First ever Outdoor Industry Association Guide Program (Trip Advisor for
Outdoors)
○New partnership with NTT Data announcement coming in July at Outdoor Retailer Show
2018
○Successful internship program with UNT in the fields of social media, marketing and
development candidates
○Launching CrowdFunding / Membership / Co-op Program in July 2018
Capital Funding Success
1.Stoke has a member company that was able to secure $105K in investment funding in the
previous 6 months.
2.Stoke Coworking recently sponsored one of our member companies, Cortex Therapy Solutions,
to attend the FUND Conference in Austin, TX. Their primary goal - secure or at least discover
potential avenues of investment. Cortex currently has their prototype, a solid business strategy,
and are in the process of finalizing a partnership with a tier one research institution. All three
Co-Founders were able to attend the event due to Stoke’s sponsorship and networked amongst
other companies, receiving advice on funding from a number of startups who’d already gone
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through their seed rounds, along with FUND’s parent company, Venture Connects. Cortex will be
one of the first companies to pitch in front of the Denton Investment Group at the first meeting
where they will hear from startups in June.
Business Health and Growth
Member Testimonial - “As a digital marketing agency, we work with clients all over the US and it is
uncommon for us to have the opportunity to meet face to face with our clients regularly, if ever. With
Stoke being an attractive home base for thriving startups, we've had the opportunity to work with clients
who are right here in our space. The collaboration, rapport building and trust we can build with clients who
are working alongside us regularly is a rare treat in our business. We've had the opportunity to meet and
work in person with our clients who live in Chicago, New York, and even Russia because Stoke is where
their business calls home.
In addition to the opportunity to work with our neighbors and friends at Stoke, we've been able to
completely change the way we work. We realized that having our whole team in one office was actually
hurting productivity (and costing us more in rent). We used Stoke as an opportunity to experiment in a
dispersed workforce, meeting 2 or 3 times a month in person and working remotely the majority of the
time. With the conference rooms and event space, we can still meet together when we need to, but we
aren't constantly distracting each other from work on a daily basis.”
Marketing metrics
1.Number of events sponsored (regional/startup/tech) - 3
a.Denton Mini Maker Faire - February 2018
b.SXSWi - March 2018
c.Member company Cortex attending FUND conference in Austin - April 2018
2.Number of blog posts - 4
a.Worked to revise website in March and April, published 2 blog posts in April and 2 in
May.
3.Website stats
a.Page views - 11.3k
b.Unique visitors -5,505
c.Site visits - 5,048
4.Social media engagement - See FB report for more details
a.Total reach - 93,447
b.Impressions - 145,475
c.Reach of page posts - 83,534
d.Total post impressions - 125,007
e.Page likes - + 86 since December 1
5.Last Year vs This Year Facebook Stats (Dec 1 - May 31)
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Total increase is 100% over last year
Teal reflects December 1, 2016-May 31, 2017 - Red reflects December 1, 2017-May 31, 2018
Post reach is up 9% over last year - Impressions are up 13% over last year
6.Last Year vs This Year Website Stats (Dec 1 - May 31)
a.Session Duration - 1.25 minutes vs 1.49 minutes (+19%)
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Yellow reflects December 1, 2016-May 31, 2017 - Teal reflects December 1, 2017-May 31, 2018
681% increase in form submissions over last year
Programming/event metrics
1.Number of educational events/programs held - 13
a.Lunch + Learn - 5
b.TWU business workshops - 6
c.Heather spoke at the City’s Small business workshop
2.Number of startup/tech events held - 9
a.Ruby meetups - 5
b.From the Future’s Game Dev Jam
c.Stoke Open House
d.Denton Data Day
e.Cyber Security Hackathon
3.Number of mentor sessions used - 10
a.Members met with a handful of different mentors including Marshall Culpepper, Patrick
Peters, Ndaba Mdhlongwa, and Kevin Roden.
4.Number of member events held - 8
a.Member Huddle - 6
b.Holiday Potluck
c.Taco Potluck
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(data collected from May 2018 member survey - 47% of member companies responded)
(data collected from May 2018 member survey - 47% of member companies responded)
Partnership metrics
1.UNT
a.We are forging a relationship with the new Director of the Murphy Center for
Entrepreneurship and Innovation. We are in discussions with them about hosting some of
their entrepreneurship curriculum here at Stoke and are considering other ways we can
partner with that department.
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b.We are in conversations with the graduate school to host their Three Minute Thesis
presentations in the fall. This is a time for grad students to pitch their research in 3
minutes to a community audience.
c.Stoke hosted a number of their students working to organize a Hackathon at UNT as
coworking members during Spring Break and have acted as the venue for a number of
meetups hosted by student group UNT ASIS&T (Association for Information Science and
Technology).
d.UNT Career Center attended Stoke’s headshot day to offer interview and resume writing
tips to attendees.
2.TWU
a.Stoke Director is serving on the Advisory Committee of TWU’s Center for Women in
Business.
b.TWU hosted a series of 6 small business workshops at Stoke through March and April.
These events were open to the public and covered topics such as small business
resources, insurance, business plan writing, and small business finances.
c.TWU Center for Women in Business attended Stoke’s headshot day to offer information
about their mentor, funding, and research resources for entrepreneurs.
3.NCTC
a.We have been meeting with NCTC to coordinate a Tech Hire Job Fair that will be
happening at Stoke on August 9th. Companies from the area along with Stoke members
and partners looking to hire will set up booths in our space to promote their job openings
and meet with potential candidates.
4.TechMill
a.TechMill experienced a change in leadership in the last few months and have been
working to re-vamp their initiatives and programming. We continue to host their board
meetings, podcast recording sessions, tech meetups, and will be the site of an Open
Hack event happening in October. We continue to offer our space to them for whatever
programming, events, and meetups they would like to host.
5.Investment Group
a.Met two individuals with investment experience and passion for Denton at SXSWi. In
April, we brought these two individuals to Denton and took them on a tour to meet some
prominent startups and thought leaders to introduce them to some of the exciting things
happening here.
b.In May we held an initial Denton Startup Investor meeting with these two individuals
along with a handful of others to discuss the possibility of starting a group that would
invest in local startups.
c.We are coordinating a meeting for June (which will continue on a monthly basis) for
startups to pitch to the group to receive guidance, feedback, and hopefully to close some
investment deals.
Membership numbers
1.Total member companies as of May 31 - 41
a.Up from 35 in December
2.Membership Levels
a.Virtual +5 since December
b.Coworking +1 since December
c.Dedicated +5 since December
d.Office memberships have stayed the same and remain at capacity.
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3.Percentage of tech/tech-enabled members - 62%
a.NOTE: There is a slight difference in the % stated above and below in the chart. The 62%
reflects the percentage of tech/tech-enabled members from all 41 companies, while the
number reflected in the survey below reflects the responses from the 47% of member
companies that responded to the member survey.
(data collected from May 2018 member survey - 47% of member companies responded)
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(data collected from May 2018 member survey - 47% of member companies responded)
(data collected from May 2018 member survey - 47% of member companies responded)
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(data collected from May 2018 member survey - 47% of member companies responded)
Financial Report:
Attached is the complete P&L from December 1, 2017-May 31, 2018.
Capital/FFE expenses
●Conference call phones for 2 conference rooms
●Google Home speakers to play music throughout the space
●Varidesk (to add a standing desk option)
●Plants & planters (this may sound small, but according to the member survey, “more plants” was
one of the most selected options on ways the members would like to see the physical space
improved)
●Office chairs
●Sound absorption foam
Marketing expenses
●Program expenses include
○Lunch + Learns
○Open House Event
●Sponsored events
○Payment for Dallas New Tech (we sponsored the event where Marshall Culpepper was
interviewed) - event hosted June 5
○FUND conference in Austin
●Advertising and Marketing
○Squarespace website fees
○Domain name renewal
○Business card printing
○Paid social media advertising
○Design software
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Member Comments:
●“I am an entrepreneur who has been involved with startup companies for over 5 years. Now it’s
my time to shine and I have set out to start and live off my business. After joining Stoke, I was
met with smiling faces and open arms and felt that my business ideas were safe. The staff are
really honest and knowledgeable and have real time experience. I love Stoke because it is more
than just a co working space. It is a real family who support and encourage each other. Through
Stoke I was able to surround myself with other motivated free thinkers who have similar passions
to mine.”
●“I think Stoke is really great and love what the staff is doing. With their continued work, it will be
an obvious choice for local freelancers and entrepreneurs.”
●“I have loved Stoke and you’ve been so helpful in so many ways! The price is great, too!”
●“I think stoke management does a great job overall.”
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Cash Basis Monday, June 11, 2018 09:34 AM GMT-7 1/1
Stoke Denton
PROFIT AND LOSS
December 2017 - May 2018
TOTAL
Income
Sales 62,613.56
Unapplied Cash Payment Income 0.00
Total Income $62,613.56
GROSS PROFIT $62,613.56
Expenses
Advertising & Marketing 583.30
Events + Program Costs 1,116.72
Sponsored Events 1,320.00
Total Advertising & Marketing 3,020.02
Bank Charges & Fees 340.40
Capital Improvements 978.51
Dues & subscriptions 766.91
Insurance 749.00
Kitchen Supply
paper goods 146.91
Snacks/coffee 2,272.02
Total Kitchen Supply 2,418.93
Legal & Professional Services 412.50
Meals & Entertainment 316.27
Office Supplies & Software 155.80
Other Business Expenses 208.00
QuickBooks Payments Fees 1,290.27
Reimbursable Expenses 200.00
Salaries & Benefits
Employee Benefits 250.50
Employer Taxes 3,478.05
Reimbursements 2,382.71
Salary 35,083.79
Total Salaries & Benefits 41,195.05
Staff Development 91.62
Taxes & Licenses 52.00
Travel 1,738.41
Total Expenses $53,933.69
NET OPERATING INCOME $8,679.87
NET INCOME $8,679.87