At this point, even the most conservative, laggard cities in the South have their own co-working space or business incubator. But simply checking these boxes doesn’t make a robust startup ecosystem. The key is evolving them from just Wi-Fi, coffee, four walls and the unused, guilt-ridden ping pong table to to something that has an economic impact on our cities and creates jobs that retain the best and brightest.
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 that Archive Social is leaving 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?
Listen to the Needs of the Entrepreneurs
As the founder and manager of two angel investor networks, I have a VERY simple strategy that has served me—and the entrepreneurs I try to help—well for the past 16 years: I ask them what they 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, or help with a prototype or finding 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 10-slide guideline—10 slides, 20 minutes, in 30 pt. font (because the older investors need the bigger font size to read on the screen.)
Connect Local Entrepreneurs to Your Region’s Largest Employers
Throughout my career, I have spent multiple years in both Asheville, North Carolina (mountains) and Wilmington, North Carolina (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 that show off a great place to live, but they don’t actually do 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 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 what 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.
We are doing this Oct. 5 when Paul Singh comes to Wilmington. We have three General Electric and three local INC 5000 winners 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).
Open Doors for Your Startups
Like I mentioned earlier, for startups to grow, they need to be nurtured, mentored and given a hand up. If startups were plants, they would need sunshine. Let me explain by way of my new logo for the Network for Entrepreneurs in Wilmington (NEW). It’s a seed with images of sunshine and water and the plant grows and develops roots, showing 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 Dwayne, did you read about this great new local company in the paper today? Hey Erica, 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 talk radio show to promote local startup events. This time, however, I brought in one of the startups my Wilmington Angels for Local Entrepreneurs (WALE) just invested in called Ten8Tech.com. As the radio show went on, the entrepreneur did a great job of promoting his company’s product and explained how it had just finished raising its third round of funding, 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. So what do you think happened? Someone listening to the show actually contacted the radio station and wanted to see a demo of the product.
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. It does not require a strategic plan from a consultant. And it’s 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.