Cleveland Whiskey is one of Northeast Ohio’s most successful and well-known startups. The company has raised more than $2 million, perfected a disruptive technology that dramatically accelerates the maturation of distilled spirits, and sold more than 200,000 bottles of its whiskey around the world.
Writers for Forbes, Inc., and Entrepreneur have told the Cleveland Whiskey story. The magazines stacked up its whiskey’s taste against traditionally aged spirits, shared as much about the rapid aging process as founder Tom Lix would divulge, and lauded him for applying this new technology to an industry that hasn’t changed manufacturing processes in generations.
But there’s a lesser told side to the story. Cleveland Whiskey has strong ties to education.
It started with the Innovation Fund.
In 2010 Cleveland Whiskey received a $25,000 grant from the pre-seed fund founded by the Lorain County Community College Foundation. Tom used the money to move the company out of his basement—literally.
“The Innovation Fund was some of the very first outside money that we raised,” Tom says. “It enabled us to move from my basement into a laboratory space in MAGNET.”
Once in the Cleveland incubator that supports manufacturing companies, Tom used the grant, combined with a subsequent $100,000 Innovation Fund award, to make some critical early hires and quickly transition from research and testing to making some of Cleveland Whiskey’s first products.
Besides working capital, the Innovation Fund money gave Tom’s startup the external validation he needed to bring in additional investments. The $2 million ramped production and in 2013 Cleveland Whiskey began selling. In just 10 months, the company sold nearly 50,000 bottles, earning almost $1 million in revenue.
And all the while, Tom has involved students in making his product and his company the best they can be.
One of the requirements of the $100,000 Innovation Fund award Tom received was providing an internship to a student at one of the fund partner colleges. Tom found his intern at Lake Erie College, where he was once the director of the Center for Entrepreneurship, and had him working by his side as he converted the company’s experimental permit into a production level license from the U.S. Department of Treasury’s Alcohol and Tobacco, Tax and Trade Bureau.
That one required internship was just the beginning. Tom has hired interns from Cleveland State University and Case Western Reserve University and the work they’ve done has been transformational for both Tom’s company and his interns. They performed market research; fabricate, test and install equipment; and set organizational standards.
Tom’s internships are well-planned and even award-winning. Cleveland Business Connects named Cleveland Whiskey as having the “Best Small Business Internship.” One of the reasons might be their intern-to-employee probability. A number of Tom’s full-time hires having come from the intern ranks, including the company’s distillery manager. He was the Lake Erie College intern.
Internships aren’t the only way into a Cleveland Whiskey student experience. After meeting Tom during a tour of his facility, Lorain County Community College chemistry professor Regan Silvestri saw an opportunity to bring textbook teaching to life.
With Tom’s enthusiastic blessing, two of Regan’s students started developing a way to analyze bourbon whiskey samples in their chemistry lab and generate an analytical profile of the whiskey’s flavor. The project gave the students real-world chemistry experience and the output gave Tom comparative chemical analyses that guide his company’s continual improvement process.
“What we make today is better than what we made last year or the year before that,” Tom says. “We’re continually working on both process and flavor improvements and our work with the college has helped guide some of these improvements.”
And what’s a great product without the appropriate marketing strategy to tell the world about it?
Just last year Cleveland Whiskey served as the case sponsor for the NASBITE International Case Competition, a year-long event that brings together top marketing students to work on an international marketing challenge.
The students’ challenge? Develop a marketing strategy for Cleveland Whiskey as Tom plans its global expansion.
Students from the Plaster School of Business at Missouri Southern took home the title of winner. And Tom took home their 20-page analysis on how best to enter the Asian market.
If you ask Tom what he’s most proud of, he might tell you about the 3,600 blind taste tests they’ve conducted—against an award-winning Kentucky brand bourdon that’s aged over nine years—in which they’ve won on average 54% of the time with a product they can make in 24 hours. Or perhaps the global consumer acceptance they’ve experienced as Cleveland Whiskey expands beyond the United States, selling in Germany, France, Belgium, Switzerland and Japan.
Those are great feats. The path to achieving them, in which Tom took every opportunity to involve, educate and inspire students, makes them even greater.
“Involving students is part of how we prepare for the future,” Tom says. “It’s really that simple.”
Leigh Keeton manages Lorain County Community College's economic development messaging with a particular focus on its startup support programs, including GLIDE, the college's on-campus technology incubator, and Innovation Fund Northeast Ohio.