For the last five years of this cycle, we have all heard the excitement (and some hype) about startups, especially this week as CED hosts the largest venture capital conference in the South right here in Raleigh/ Durham, North Carolina.
Every city now has a coworking space, incubator or accelerator, even the most conservative laggard cities at this point. But how do we do a better job of evolving the common coworking space or incubator from just WiFi, coffee, four walls and the unused , guilt ridden ping pong table to something that has an economic impact on our cities that creates jobs that retain the best and brightest? I read an article last week posted on LinkedIn that economic development / job creation is the number one issue facing cities today.
The goal of every incubator should be to grow the startups so they have to graduate and move out of the facility to make room for new entrepreneurs with new ideas. (Much like the recent announcement of Archive Social at American Underground.) And for startups to grow, they need to be nurtured (not spoiled), mentored and given a hand up if they have the drive and sense of urgency that entrepreneurs must have to succeed.
What can entrepreneur support organizations and economic development organizations do within cities to avoid becoming bureaucracies and simply remove barriers to quick growth and success?
This is what Durham, Raleigh, Austin and Boulder do so well. (Read Brad Feld’s book Startup Communities.)
Listen to the Needs of the Entrepreneurs
What I have been doing for the last 16 years is not rocket science. I have a VERY simple strategy. I meet with new entrepreneurs every day and I ask them a very simple question: What do you need?
Yes, it is that simple, I ask entrepreneurs to tell me three things about their business where they need some help. Of course, capital is always the most popular answer. So I ask a few follow up questions and quickly find out they are usually not anywhere near prepared for meeting an investor. The other common answers are an affordable patent lawyer, an introduction to a prospect, need for a mentor with industry experience and relevant contacts, help with a prototype or affordable tech talent.
My typical follow up to the capital search is to schedule another meeting with the entrepreneur to give me a practice investor pitch and I give them some helpful articles, links to investor related events, videos of good pitches and the Guy Kawasaki ten slide guideline. 102030 , ten slides, twenty minutes, thirty font (because the older investors need bigger font size to read on the screen.)
Full disclosure: I have started and managed two Angel Investor networks. I am not an investor myself. I take a very different approach as I am usually on the side of helping the entrepreneurs more who are the underdogs. I learn the preferences of the members of the angel group and so I can coach the entrepreneurs better to appeal to the investors.
Many conservative angel investors have a moving goal line, meaning they tell the entrepreneurs they want to see A, B and C but then delay decisions by asking for more due diligence materials until you get all the way to X,Y and Z.
I call this the “Never ending maybe”.
I work with achievable milestones that I set with both the entrepreneur and interested investors to get a meeting in the middle so the goal lines can’t keep moving further out.
What pain point does your product solve?
So in the last 16 years, I have spent multiple years in both Asheville, North Carolina (mountains) and Wilmington, NC (beach) as I was recruited to those regions to build the startup ecosystem to diversify from the traditional tourism economy. I am convinced most people move to these regions because they believe the tourism marketing materials also show off a great place to live without these people doing much research into the actual strengths or weaknesses of the local economy. Therefore these people, usually with little corporate experience, quickly become frustrated with the lack of local job opportunities and they decide to start a business so they can remain in these beautiful locations. And many times, these new businesses are started with a solution in mind without much vision into the local economy or knowledge about the actual needs are in the local industries.
My solution to this? I have had several events through the years that I call my Aspirin event. I bring in five of the largest employers in the region and have them explain the five things about their business or industry that keep them up at night.
If you have five large local companies that have resources and they explain five things they need help with, that is 25 opportunities for the entrepreneurs in the room to find an early adopter for their products. Then of course they can find similar companies in the same industry in nearby cities and can then start to scale their business.
We are doing this October 5th while Paul Singh comes to Wilmington, NC. We have three local INC 5000 winners and General Electric coming in to describe some of their growing pains. Please join us for this special event and other sessions over three days (at the beach). https://nvite.com/RJTechTour/db4e
Sunshine
My logo for the Network for Entrepreneurs in Wilmington is pretty simple.
A seed with images of sunshine and water and the plant grows and develops roots to give the image that the startup will stay in the community.
The Seed is the idea.
The Rainwater is the capital / client revenue.
The Sunshine is the media spotlight or some stage time at local, regional and statewide events. It is so much easier to get an investor interested in a startup if the startup already has some buzz in the local community.
You know, the cocktail chatter. Hey Bob, did you read about this great new local company in the paper today? Hey Jane, did you know this local startup was selected for a prestigious conference or regional accelerator? Hey David, I just read that this local Wilmington startup got capital from a Raleigh investor. Did this local startup pitch to your local angel investor group?
This happened in Wilmington just last week. I make an occasional appearance on a local conservative / political talk radio show to promote an upcoming startup event. But this time, I brought in one of the startups my Wilmington Angels for Local Entrepreneurs (WALE) just invested in called Ten8Tech.com. The CEO of this startup is a Navy veteran and former police officer and I have been working hard to help local military veterans lately. So as the radio show went on, the entrepreneur did a great job of promoting their product.
The entrepreneur explained how they had just finished raising their third round of funding, they formed a partnership with a large local software company and landed some new clients. These are all validation points of sustainable growth and not a fail fast / gone tomorrow startup.
And what do you think happened …?
Someone listening to the show actually contacted the radio station and wanted to see a demo of the product and potentially become a client.
I also serve on selection committees for the North Carolina Technology Association Awards , review committees for the startup grants for NC IDEA and also the CED Tech Venture conference selection committee as these organizations are inclusive of the whole state of North Carolina and I represent Wilmington.
I tell you all of this because this is all free. Nothing I described above requires many resources. Does not require a strategic plan from a consultant. Not rocket science. I simply open doors of opportunity for entrepreneurs who need a hand up. I suggest you work with the entrepreneurs in your community, qualify them, check their ability and willingness to follow through, ask them to achieve some simple milestones and then begin to open doors through your contacts.
The entrepreneurs have to do the rest. Much like my father who was a state Hall of Fame high school basketball coach knows, despite all of the coaching and practice, the players still have to put the ball in the basket in the live game to win.
Editor’s note: Jim R. Roberts is a professional connector who has started several Entrepreneur Support Organizations in North Carolina. He is currently the Founder of the Network for Entrepreneurs in Wilmington, NC (NEW) and the Wilmington Angels for Local Entrepreneurs (WALE) in Wilmington, North Carolina. He tweets at @RedSpireUSNC and you can read more about NEW at www.newilm.com
