Updated: Oct 15, 2020
Birdtown Coffee sat down at Lakewood Park with Cleveland based entrepreneur Peter Truog, founder, The Opportunity Exchange, to learn more about his exciting startup and entrepreneurial journey.
[Birdtown Coffee (BC)]? Can you give a quick bio?
Peter: My name's Peter Truog, I'm the co-founder of a company called The Opportunity Exchange. We build software for cities and states to help them grow more equitable and inclusive communities. I'm not originally a Cleveland native, I moved to Cleveland in 2016 from Boston. I’ve become a big Cleveland fan, but I've maintained my Boston sports allegiances despite living in Cleveland for five years.
[BC] What led to the founding of The Opportunity Exchange?
Peter: So the background for The Opportunity Exchange was, there was a part of the Tax Cuts and Jobs Act that was passed at the end of 2017, established this new tax incentive for investing in low income parts of cities across the country. At the time, I was working for a non-profit here in Cleveland that was doing a lot of work with communities across Northeast, Ohio focused on issues of inclusive growth. The intersection of those two things cause a lot of my work at the time to be focused on helping communities, whether that be cities, counties, neighborhoods, determine how to position themselves to take advantage of this new tax incentive that was just passed.
As a result of doing a lot of that work, it became abundantly clear that there was a ton of energy amongst a lot of the different stakeholders, whether it be public sector stakeholders, community stakeholders - like residents, the developer community and the investor community about what this incentive could mean, but there weren’t a lot of tools to help bring the parties together to help them connect and navigate the space. A lot of it was being navigated through personal networks or it wasn't even clear how to find somebody who might be interested, you had small communities across the country that all of a sudden were faced with the opportunity of – “how do we go to market to attract an investor who might have never heard of us before”, and so it was from some of that initial experience of working with those types of communities here that led to the idea to create the opportunity exchange.
We originated as a company focused on creating a community-oriented marketplace for showcasing a lot of these investment opportunities, so we would partner with cities and states across the country to help them showcase potential deal flow and investments in their community that they felt were aligned with community impact, aligned with community strategy we want to showcase to a National investor audience. Since then, we've grown to be a little bit more of a wider ranging economic development platform, supporting these community and economic development teams more generally across that work. So that's the story of where it all started and kind of the catalyst to create the company, so now our fifth employee starts on Tuesday of next week.
[BC] Can you explain the idea/origin of "opportunity zones"
Peter: So in a nutshell, the idea behind the incentive was that over the course of the past decade, stock markets had risen a lot, and there were a lot of corporations and individuals who over that time had generated a ton of earnings in the stock market, and were sitting on a large amounts of capital gains, but those assets weren’t being utilized to their highest and best purpose, they were just sitting in the stock market in the asset that they'd invested in 10 years ago which had appreciated a ton.
The idea behind the incentive of was to create a mechanism to encourage people who have had gains to roll them out of their original investment and place them in a new investment in certain communities that historically haven't had a lot of private capital invested in them and thereby encouraging a double win, in theory, the investor would benefit because they're rolling their previous investment into a new one and getting some tax benefits as a result of doing so.
Additionally, communities that have historically struggled to attract capital would have this new tool at their disposal for doing so, and so the challenge is that there's a lot of difficulty in connecting those two parties. These investors historically haven't invested in these communities, and communities historically haven't had many avenues to go to market and try to attract these types of investors, and so creating the Rosetta Stone that helps translate between those parties and foster and new connections that are community-aligned and sort of transparent and in the spirit of what the incentive was meant to do was where we came into the picture.
[BC] Why Cleveland?
Peter: Well, I had just convinced my fiancé at the time to move to Cleveland and if I would have left and gone somewhere else, I would have gotten in big trouble… a little tongue in cheek but, I think part of what drew me to Cleveland originally was, I moved here in 2016, in the lead up to the 2016 election. North-East Ohio was focused on issues of inclusive economic development and economic polarization in the US.
I find that that particular issue to be extremely motivating and something that I've developed a great deal of passion for, and so there's a lot of personal experience that I've had over the last five years living here as well, a professional experience that continues to keep me quite motivated, working on issues of inclusive community and economic development here in Cleveland, and there's also a lot of people here like me who feel that same way, and so building a team around that here and working on these issues in a city that was really where I grew to be passionate about them felt like the right thing to do.
[BC] How has Covid affected your business?
Peter: It’s affected us in a number of ways, in many cases, difficult ways, but at the end of the day, hopefully positive. It's forced us to accelerate our transition to being little bit more of a broad-based software platform, we had this in our vision for a while that we would support teams more holistically across their day-to-day workflows, think about a city economic development official and the various tasks that they do. When we first started, we would help with a very small segment of those tasks, and we're trying to think about ways to support more generally across the work that they do, and that was always in our plans, but Covid has prompted us to accelerate our path and journey towards getting to that vision.
[BC] Tell us about making the jump from your previous position... What was hard about it?
Peter: There are a couple of things that have been difficult. Number one, I have no software background, but I'm working on a software company, so during the time I was doing a lot of YouTube watching and learning how to code. That was a lot of learning, but a really fun experience, although times quite difficult and sometimes very frustrating.
Related to that, growing a team in Cleveland has been something that I've found to be difficult in some ways that folks perhaps have also experienced. The market for tech talent in Cleveland isn't what it is in some parts of the country. At the same time, I think that there's a lot of really awesome resources in the city and also awesome people here, and I think for me personally, one of the biggest learning experiences that I've had, has been the process of building a team and uncovering different sources of talent in Cleveland I hadn’t previously known about and finding new people in the city who are doing cool things and have skills or experiences or knowledge that can be really helpful to us that I had never interacted with previously.
[BC] I’ve heard you are fluent in a couple languages, can we add coding to that list?
Peter: I learned French in high school. In college, I was an East Asian Studies major, so I learned Mandarin and then unfortunately, my French has persisted a little bit and the Mandarin has fallen off quite a bit. I will give a lot of credit to studying languages when I was younger, to providing a learning structure for how I approach learning software languages later, which has been really cool.
[BC] Any notable successes or failures, lessons learned, you'd like to share?
Peter: I think from a success perspective, I'm really proud of the team that we've built, and the way in which our team challenges ourselves to keep learning. Obviously, a big part of our work is the work of building the product that sustains the company, but within that experience, there are so many day-to-day opportunities to challenge yourself to learn new things or push yourself in directions that force you outside of or to the edge of your comfort zone.
In terms of difficulties, I think having started the company was such a specific vision, and its very specific use case, some of the most challenging part of the of the process have been re-imagining our vision of where we want to be going. A lot of our initial customer relationships were predicated upon serving this very discrete need that they had, personally, a lot of my own conceptualization of what the company even could be was extremely narrowly focused on where we started originally.
For me personally, that's been something that has been a big learning experience and at times as been a source of pain for our company as people sometimes have lost sight about where we're headed, or why we're putting in all this work, or where we're hoping it goes. So this process of building and visioning and then aligning the team to meet that vision, and then think I'm thinking “okay, so now where do we go?” has been a big learning experience for me personally.
[BC] What techniques do you use to vision?
Peter: We have tried a couple of different things with various degrees of success. Well, when we started, we didn't have one, so that was clearly not where you want to be. The vision was extremely specific, it was very task-based in terms of fulfilling a very discreet action-based type of need.
Subsequent to that, we've gone through a period of thinking deliberately ahead of time about some questions that we want to pose to the team and then going off-site somewhere as a team and working through these different questions together.
I think the most successful thing that we've done I have to give credit to Venture for America for. Everybody except for myself at The Opportunity Exchange has been a Venture for America fellow. We're currently part of their Accelerator Program, and one of the first things they have you do during the accelerator is a company visioning exercise, where through a series of prompts get you to think a couple of years into the future and tell a story about what it is like to go to work that day, who you’re interacting with, what your team looks like, where you're going, what you're doing, what's recently happened, what's imminently about to happen?
Something about that narrative-based setting really created different outcomes for us as a company in terms of where we got to with our vision. I think it created a lot more creativity and sort of imagining yourself a couple of years from now, going through the emotions of going to work one day what that feels like? It was a very different way than I never thought about this and has created a lot more energy within our team around the direction we’re headed, and so that was a particularly successful experience for us.
[BC] Favorite recent reads business or other?
Peter: Business wise - Measure what Matters by John Doerr. My wife recommended we read it and it's definitely changed the way that we think about goal setting and goal measurement at the company.
Fiction wise I read If On A Winter’s Night a Traveler by Italian writer Italo Calvino. It’s about 200 pages long so it's not a big commitment, but it’s one of the more creative works of fiction that I've read in a long time. It was awesome for breaking my day-to-day work experience with something that was super creative and really enjoyable to read.
Thanks to Peter for a fun conversation! To learn more about The Opportunity Exchange, please visit www.theopportunityexchange.com.