Helping regional startups starts with founders

Adam Kalsey — Mon, 09 Jan 2012 18:00:05 +0000

A group of local non-profits is launching the Next Economy project to try and boost innovation in the local economy.

The region has embarked on an ambitious regional economic devleopment planning effort intended to define and shape the economic future of the region – the Next Economy. Four non-profits (SARTA, SACTO, the Metro Chamber, and Valley Vision) are guiding the project.

The notion that any organization - especially a group of non-profit economic development boards - thinks they can shape the economic future through central planning is simply flawed. The mechanism they’re using to do this makes it even worse. The Next Economy project is starting with a scorecard - a list of things that a NGO has come up with that are deemed important for a growing regional economy. They held a kickoff event a few weeks ago to get the local business community involved in the scorecard. I happened to miss the event because of some flight delays, so later they sent me a copy of the scorecard for my feedback.

The scorecard includes things like governmental growth advocacy, conference centers, facilities with high speed internet, public transit, and quality of K-12 education. There’s a couple of items on there like access to capital and availability of M&A advisory firms. It’s exactly the sort of list you’d expect an economic development agency to come up with.

The list seems to assume that there’s a group of people sitting around waiting to start a company, but can’t because there’s not enough infrastructure or services here. Has anyone asked local founders what they want? I don’t know any founders who look at the region and say, “gee, I’d love to start a company, but there’s just not enough local government agencies to support my idea.” Or who feel stymied by a lack of real estate or bike trails. Good founders start companies despite these things. If they see capital or access to talent as a barrier, they simply find ways around it.

The people who are participating in the Next Economy research are overwhelmingly from larger (100+ people) companies and government. If you’re trying to understand what early stage companies want, ask early stage companies.

If you want to help startups in the region, you need to help founders. And you need to start with asking them what they need. Most of the founders I speak to don’t need bike trails, or colleges. They need customers. They need mentors. They need peers to bounce ideas off. None of these things are going to come out of a bunch of non-profits who are trying to shape the region’s future.

Other regions are attempting to set up incubators or accelerator funds to try and build or attract startups to their area. This isn’t likely to be a success, either. Luring outside startups with money and infrastructure means that you’re only going to attract founders that need money or infrastructure. This assumes that there’s a whole bunch of fantastic companies and founders out there that are hurting for either. The truth is, the only startups that can’t get money or pay for their own infrastructure are at best second-rate. If they were first-rate, they’d be in TechStars or Y Combinator. Or have a round of seed funding already. Or have paying customers.

The worst thing about local incubators and accelerator funds is they’ll look successful for a while. You’ll be able to point at a bunch of companies who have been part of the program. Some of them will even become viable small businesses and hire people. The people who are part of the program will tout this as evidence of their success, but if you look at the graduating companies 10 years from now, you won’t see rousing successes. There will be lots of activity, and lots of energy expended, but there won’t be any serious impact on the local economy.

It’s easy to mistake activity for progress.

Incubators are like grad schools. There’s a few great ones that turn out great graduates, but for the most part they’re just a way to let people avoid the real world. incubators are designed to give startups a cozy, safe place to live for a while. Startups shouldn’t have a cozy safe place. Startups that suck bad enough they need a safe place should fail.

What can someone do to help the startup community? The more time I spend thinking about the problem, the more that I think the best thing that can happen is simply getting people into a room together on a regular basis. Founders, people interested in being founders, people interested in helping founders, and people who want to join early stage companies. The more time they spend together, the more connections and growth we’ll see. Coworking spaces like The Urban Hive or Capsity are a part of this, as they give founders a place to work where they’ll be surrounded by other founders. Technology meetups and user groups are another key. Various mixers like our weekly Open Coffee give an informal, relaxed place for people to meet. Bigger events like BarCamps and startup showcases can help anchor the community.

Its great that these organizations recognize that startups and innovation are the key to economic growth — they’re just going about it the wrong way. Kicking off an effort to create an innovation economy by focusing on buildings, lifestyle, and money is like starting a company and focusing on office supplies and business cards. Successful companies start with customers. Efforts to build a startup ecosystem in the area should start with founders.

Excerpt:

Helping Sacramento region startups needs to start with helping founders. Why central planning and incubators can't help.

SARTA TechSurge

Adam Kalsey — Mon, 24 May 2010 18:02:55 +0000

Date:

Jun 29 2010 - 5:00pm - 8:00pm

SARTA’s annual technology mixer.

Full Event Details »

How to Fund Your Small Business or Start-Up

Adam Kalsey — Mon, 24 May 2010 18:00:24 +0000

Date:

Jun 16 2010 - 8:30am - 11:30am

The ability to raise capital and maintain cash flow is a key element of success for Start-ups and Small Businesses as well as larger organizations. Participants will explore both equity and non-equity funding methods, including the SBA Loan Guaranty Program.

Full event listing »

Location

Drexel UniversitySacramento, CA

See map: Google Maps

Entrepreneur Breakfast

Adam Kalsey — Fri, 15 May 2009 04:59:48 +0000

Date:

Jun 11 2009 - 7:30am - 9:30am

Join SARTA’s VentureStart, The Sacramento Entrepreneurship Academy, and other local entrepreneur organizations for a breakfast at Sacramento State’s Alumni Center.

Network with the regions’ funding sources, entrepreneurs and business mentors.
Learn about the programs in support of your next million $$$$.
Discover the brightest and best entrepreneurial minds in our region.
Engage your next potential investment.

Tickets are $10 and must be purchased in advance.

Location

Sacramento State Alumni Center

6000 J Street

Sacramento, CA, 95819

See map: Google Maps

Pitching for Venture Capital (SARTA)

Adam Kalsey — Fri, 01 May 2009 23:37:12 +0000

Date:

May 20 2009 - 8:30am - 11:30am

DFJ Direct’s Scott Lenet talks about how startups can raise venture capital for SARTA’s Leadership Series.

This session is geared towards any entrepreneur who wants to learn more about raising funding from VC’s or angel investing. Scott will walk you through the steps of idea generation to the coveted ‘term sheet’. New for this year will be an interactive panel of local entrepreneurs who have been through the steps of raising capital from a VC. Scott will also discuss the changes in the economic environment and how they are affecting your chances of raising capital.

More details and registration

SARTA Leadership Series: How to pitch your idea for funding

Adam Kalsey — Tue, 16 Sep 2008 21:05:52 +0000

Tomorrow morning SARTA’s leadership series event will feature DFJ Frontier’s Scott Lenet talking about how to pitch your idea for funding.

Many great ideas go unnoticed because the person responsible for selling the idea does not know how to communicate to the person writing the check. This annual Leadership Series presentation will cover the steps necessary to pitch your business idea to a VC and other funding sources. Scott Lenet is uniquely qualified to help you on your journey to success in dealing the world of funding.

SacStarts - SARTA

Helping regional startups starts with founders

SARTA TechSurge

How to Fund Your Small Business or Start-Up

Location

Entrepreneur Breakfast

Location

Pitching for Venture Capital (SARTA)

SARTA Leadership Series: How to pitch your idea for funding