Tag Archives: Entrepreneurship

Ideas to Spur Startup Success in NC

Whether through consulting or working with non-profits who serve entrepreneurs, I am very committed to seeing jobs created through business creation. In my work, I am often scouring research publications to find data and resources that point to trends and patterns. The North Carolina Small Business Technology Development Center publishes data on small business and entrepreneurship trends across the state. The 2012 (results through 2010) report highlighted some interesting trends:

Not only has the number of new employer businesses declined, but so
have sole proprietorships. Only three times in the past four decades
has the total number of non-farm proprietors in North Carolina
decreased from the previous year – twice in the early 1970s and
again in 2008. The only reason there wasn’t a decline in 2010, was
likely due to the growth of the state’s population. NC’s proportion of
business owners to total residents dropped in two of the last three
years – and 2009 was mostly unchanged.

We don’t know exactly who is and isn’t starting businesses in North
Carolina. However, the 2011 Global Entrepreneurship Monitor noted
this trend for the US as a whole and looked deeper into the problem.
Their surveys showed a disturbing decline in entrepreneurship among
young adults. This could be from a lack of interest, knowledge/training,
or capital (unemployment and debt are high among those under 25).

The reason this is potentially troubling is because the experience of
youth entrepreneurship is essential to the pipeline of successful startup
businesses in this country – often created by those in their 30s to
50s. If this trend is real and sustaining, the economic effects could be
felt in years to come.

While the concern about national declines in entrepreneurship among young adults is a valid one, our experience in the Research Triangle area is that more technology start-ups than ever are being initiated by this demographic. What seems to be missing, however, are start-ups from that same age group that are in the category of “Main Street” businesses. Businesses like real estate brokerages, boutique professional services firms, personal services, healthcare related companies, and construction companies or other labor-intensive enterprises are simply not popular among young folks.

Instead, the Baby Boom generation seems more likely to start Main Street businesses. At the Cary Innovation Center in Cary, NC, for instance, virtually all of the entrepreneurs in residence are over the age of 40. They share a common background of having spent years in industry, having developed a little bit of a nest egg, strong skills in unique disciplines, extensive business networks within their industry, and a desire to be self-employed the remainder of their productive work years. 

Perhaps we need to actively engage the 20 somethings in some type of entrepreneurship fair that would expose them to the lower risk/better quality of life aspects of the types of businesses that are residents at the Cary Innovation Center (events planning, a digital marketing company, a career outplacement firm, etc). Most of these businesses require far less capital to get off the ground than their venture-backed and angel-backed peer start-ups. Furthermore, it is easier to generate revenues earlier in the life cycle of these types of companies. 

Alternately, we need to realize the wonderful phenomenon that is spreading throughout the more seasoned crowd. We can–and should–celebrate their excitement about entrepreneurship as a second career.

In short, national trends need not determine our experience. We have an opportunity to be better than other parts of the country if we encourage more of what is working, champion alternatives for younger entrepreneurs, and give them all a lot of support in the form of education and mentoring.

What Have You Overcome to Be Successful?

Entrepreneurs who don’t win business plan or pitch competitions often get down on themselves. They may wonder whether they will ever get the funding needed to turn their idea into a commercial venture. The sense of frustration when circumstances don’t appear to go the right way can lead to despondency.  Vivian Giang, writing for Business Insider in an article published earlier this week, reminds that others have overcome greater odds.

Giang shares Ryan Blair’s story of coming from a broken family, learning disorders, and gang life to become a multimillionaire serial entrepreneur. In his book “Nothing to Lose, Everything to Gain,” Blair writes:

“I quickly saw how the system worked, how the street lords kept themselves in power through influence and manipulation. I observed how the older people used bribery and fear to get the younger kids to do their crimes, and I saw how the young people willingly went along with it because it seemed like the only power structure that had any kind of respect in the neighborhood.”

“Long before I became a millionaire entrepreneur, I was a kid with a criminal record, street gang experience, and a lot of emotional scarring from years of abuse from my father. My teenage years were hardly the typical starting point for a normal, productive life, let alone a successful business career. Turns out, that didn’t matter.”

Blair was arrested more than ten times. Living the street life left him facing a four year sentence and the tender age of 16. His mom began dating a businessman a couple years later who showed modeled how to make money legally. Giang observes that Blair was insightful when he decided to apply the survival skills learned on the street to make money the right way. His “street smarts,” she writes, were gained from observing the strengths of the gang system through a new lens.

“There’s a hierarchy in gangs, a hierarchy of positions and power,” he says. “A gang is an economic system, and there’s a lot of similarities between gangs and some legal companies. I know that it’s not always the most powerful organization that’s going to make it, it’s the one that’s most adaptable with the changing times, the one that understands how to manage their politics.”

At 21, Blair launched his first company (24/7 Tech) and brought his understanding of street economics, plus a determination to turn himself around, to bear on the effort. Today, he’s the CEO of ViSalus and won the DSN Global Turn Around Award in 2010 when he actually turned the company around from being $6 million debt in early 2008 to sucess 16 months later.

When trying to get his first business off the ground, Blair says he was nervous about ‘taking his skeletons out of his closet,” because people were always “looking for a reason to see why they are better than you. People look at people who don’t have pedigree upbringings differently.” But “if you avoid it, or hide it, others might feel as though there’s a dishonesty there, and hiding something is a very expensive emotional thing for you.”

Blair’s belief that others, too, can overcome mistakes and troubled histories influences the way he runs his own company. He said that he’s willing to hire people with a criminal record–provided they are honest about the past in the present. It seems to be working well for him!

So, if you as an entrepreneur feel that you have long odds for success, consider what Blair and others have been through. He has faced similar challenges to your own–and additional ones that, thankfully, do not confront you. With that in mind, hopefully smaller challenges will be seen for what they are.

 

 

 

European Media Incubators PepsiCo Style

Recently, we have noted that intrapreneurship is an emerging trend, perhaps even hotter than entrepreneurship. One of the hybrid expressions of these category leaders is the incubator inside the larger business. In the media industry in particular, the struggle to keep up with digital competitors creates a huge need for innovation. Chip Lebovtiz, writing for Fortune online, describes what two media companies across the Atlantic are doing.

The Irish Times and the BBC’s commercial arm, BBC Worldwide, are establishing intercompany startup incubators to harness young businesses’ disruptive energies. The (Irish Times Digital Challenge).. is akin to the plot of a Hollywood movie: a young up-and-comer works with a grumpy old mentor to overcome a problem, learning a valuable life lesson in the process. In this case, the problem is how to better monetize a company’s online presence and the life lesson is the experience startups get by working with a large company, says TheIrish Times Chief Innovation Officer Johnny Ryan.

Ryan is the brains behind (the competition), in which five early-stage companies  — 81 applied — spend eight weeks working at the Times to translate their pitch into virtual reality. While their ideas widely vary, their end goal is the same, to win €50,000 (about $61,000) from venture capital fund DFJ Esprit. The winning team must prove to the Times that its product provides the largest revenue potential and improvement to reader experience.

This is an interesting competition because large revenues and improved reader experience may be mutually incompatible. One has to wonder whether the intrapreneurs have the latitude to recommend strategies that may cannibalize longstanding business practices at the publisher.

BBC Worldwide Labs, a new business accelerator for startups, takes a similar but distinct tack. There is no competition between the fledgling companies and no prize money, but the six-month program offers a trophy of a different sort: the startups get a first client worth billions.

“The BBC can be a great first customer,” says BBC Worldwide Labs Head Jenny Fielding. The broadcasting giant can be “a partner at the point of commercialization for these companies.”

This approach is intriguing because of the built-in customer aspect. Many start-up companies struggle with defining a target market that is both large enough and profitable enough to serve as the fledgling enterprise scales. Yet, by becoming a captive supplier, does the intrapreneur become prejudiced against other viable market development opportunities?

What makes these programs distinctive is that the startups operate just down the hall from the people implementing their products. This proximity to the client is designed to overcome obstacles usually found in interactions between startups and large corporations.

Working with big companies is difficult for fledgling businesses. Fielding, in her role as the head of Digital Ventures at the BBC, often has to personally guide startups through the BBC’s diverse ecosystem. By situating the program in the BBC’s London Media Center headquarters, she expects the smaller startups to more quickly acclimate to and efficiently work with the larger BBC.

Neither the BBC nor The Irish Times will take equity stakes in the young companies they incubate. Instead, the media companies hope to establish a relationship with these startups that is ultimately scalable into a larger, future partnership…

Director of Global Digital and Social Media at PepsiCo Josh Karpf isn’t too surprised to see media companies adopt the (PepsiCo10 incubator approach)…”Technology is affecting every industry today, and media is no different, he says in an email to Fortune. “Companies that are trying to find technologies that will impact their businesses three to five years down the line are the ones who will win in the future.”

 

Starting A Biz Late in Life is Great!

We are strong believers in Boomerpreneurs– Baby Boom generation individuals who start businesses later in life, often as a second career choice. Michelle Rafter wrote the following article for Entrepreneur online about those who overcame adversity by redirecting their misfortunes into something positive and successful. She features 7 business owners who became entrepreneurs as a “second act.” Five of them are mentioned below:

Chris Gardner, Gardner Rich LLC

Second act: The Pursuit of Happyness. A homeless dad turned his life around by becoming a stockbroker in his mid-30s, and then went on to open his own investment company. Now 58, Gardner continues to reinvent himself as a motivational speaker and founder of an investment fund supporting business development in South Africa.

Lesson learned: “Probably the hardest question I get asked is ‘How do I choose between passion and practicality?’ I can’t answer that. I had to do both. I was passionate about pursuing a career in financial services. But I was also passionate about feeding my child,” Gardner told an audience at AARP’s Life@50+ convention in 2011.

Paula Deen, Paula Deen Enterprises LLC

Second act:  Paula Deen was 42, divorced, broke and battling agoraphobia when she started a catering company to makes ends meet. Six years later, the Savannah, Ga., restaurant she opened serving cheesy meatloaf, deep-fried Twinkies and other Southern specialties earned her national acclaim and the nickname Queen of Comfort Food. Aided by sons Jamie and Bobby, she parlayed her initial success into a food empire that extends to cookbooks, books, a magazine, TV shows and frozen foods.

Lesson learned: “I’m livin’ proof that the American dream is alive and well, that you can be an imperfect person and still end up with so much fun in your life you can hardly stand it,” Deen wrote in her 2007 memoir, It Ain’t All About the Cookin’ (Simon & Schuster). 

Bethenny Frankel, Skinnygirl

Second act: The 35-year-old culinary school graduate already had overcome a privileged but tough childhood — with an absent dad and an alcoholic mom — to open a natural foods bakery when she was cast in Real Housewives of New York City in 2005. Buoyed by her new found reality TV celebrity status, she launched a string of self-help books and the Skinnygirl line of cocktail mixes, sold to Beam Global in 2011 for more than $100 million. Ellen DeGeneres produced the recent pilot for Frankel’s Fox TV talk show, Bethenny.

Lesson learned: “When you find you are off track or your actions aren’t in line with your true nature, you change course. You start again. It’s never wrong. It just is,” Frankel wrote her 2011 book A Place of Yes: 10 Rules for Getting Everything You Want Out of Life. 

Bernard ‘Bernie’ Marcus, The Home Depot

Second act: Marcus was a cabinet maker and pharmacist before taking a shine to business, working his way up to running the Handy Dan hardware chain before getting fired at 50 after a disagreement with his new boss. He and partner Arthur Blank used their accumulated knowledge to open The Home Depot, revolutionizing the home-improvement industry with their mix of warehouse pricing and hands-on customer service. Marcus retired in 2002 to focus on philanthropy, funding everything from autism research to the Georgia Aquarium. Forbes pegs his current net worth at $2.3 billion.

Lesson learned: “The first thing I did was surround myself with people who were brighter than I was,” Marcus says in a 2011 Forbes interview. “If I didn’t have the best people around, we weren’t going to make it.”

Gert Boyle, Columbia Sportswear Co.

Second act: Boyle was a 42-year-old housewife and mother of three in 1970 when her husband died of a heart attack, forcing her to take over as chairman of the outdoor apparel maker her parents had started as a hat company 33 years earlier. Assisted by son Tim, Boyle has grown Columbia Sportswear from $800,000 in annual revenue to close to $1.7 billion in fiscal 2011. In the interim, she earned the nickname “One Tough Mother,” a moniker the company built an ad campaign around and Boyle used to title her 2005 autobiography. She’s still tough: Police credited instincts and grit for helping her outwit a would-be kidnapper in 2010.

Lesson learned: “After making funeral plans all weekend, I showed up for work at Columbia Sportswear on Monday morning, and I’ve been showing up ever since,” Boyle told The Oregonian.

With EntreDot and Boom! Magazine, we are putting together a Boom!erSlam event in October for boomers to vet their ideas in front of a panel and feedback from peers. Come join us at the Cary Innovation Center on October 17th at 6pm!

Simple Stories Make Great Pitches

 

ABC’s hit show, Shark Tank, is one of my very favorites on TV. It attracts entrepreneurs of all ages, levels of experience, and backgrounds to come pitch their business idea for angel investment by one or more of the sharks. One of the young ‘treps who pitched this past year is Joseph Draschil, co-founder of SpyGames.me.  Draschil is currently participating in Start-Up Chile (written about here a few months ago) while enrolled in an MBA entrepreneurship program at Babson College. 

His first major assignment in a Babson course was to create an opportunity storyboard for a business idea, limited to a single PowerPoint slide. The storyboard became a rocket pitch: a three minute, three slide, live pitch in front of his professor and classmates in the entrepreneurship class. Draschil was then encouraged to enter the Babson Rocket Pitch event, to pitch his idea in front of investors, professors, members of the community and the student body.

The following week, his team entered the Big Idea Competition, for which they were required us to upload a three-minute pitch video to YouTube, secure the most “likes” and move to the finalist round to pitch on stage for three judges. Within one week of being named one of two winning teams, Draschil received an e-mail from the director of the entrepreneurship center at Babson. Two of the “sharks” were to visit the school and hear the pitch. Here’s the young entrepreneur’s perspective on the experience:

Although I was terrified of failing in front of entrepreneur celebrities and all of Babson, I committed to participate and the pitch went great. My partner and I stumbled a couple of times during the Q&A session, but that’s okay. You make mistakes, learn from them, and improve — that’s the essence of the startup journey. After the event, Mark Cuban mentioned to us that he believed if we could get the marketing down, we would kill it.

While I continue to work on the business, I have learned a few key lessons about creating a dynamic pitch:

  1. Be visual. Please, no slides full of bullet points. Use simple and clean images that clarify and complement what you’re saying — not complicate it. When slides are cluttered and busy, the audience will be focused on deciphering them instead of focusing on you. Don’t forget that for most investors, the entrepreneur is more important than the product or idea being pitched.
  2. Tell a story. Storytelling lies at the heart of who we are as humans. Remember, you are not a court lawyer trying to amass evidence for the jury as to why your idea is destined to make millions. If your pitch is just a crowd of facts, figures and pie charts, you may lose your audience.
  3. Practice, practice, practice. Get in front of others and pitch — a lot. Don’t worry about your pitch being bad the first few times you do it. It most definitely will be. As you practice, though, you will learn which parts your audience is responding to and which parts need to be adjusted. Over time, your confidence and delivery will improve.

These 3 lessons are important for any entrepreneur. Pay attention to Draschil’s advice to be simple & clear in your slides. Way too much information in the presentations of many. The difference between an engaged audience and a bored one is your ability to weave a compelling story. Finally, the admonition to practice is so practical, fundamental, and predictive of one’s likelihood of success.