I attended a very interesting and informative session on Capital Markets outlook sponsored by Mike Colwell @ the Biz. Presented by Matt Kinley of the Pappajohn Capital Resources and Equity Dynamics, the seminar presented the state of the market, their trajectory from 1998-present day and what anyone building a business would find useful.
A few strains of information were quite clear –
- Capital is available to the right businesses in most market conditions
- There is a good time and a bad time to raise capital
- Positive cash-flow is the ultimate asset to any business
- Prepare, Pitch, Follow-up and Delivery are key
- The market between 1998 and 2011 has changed significantly and successful entrepreneurs have evolved with it
The last bullet was my key takeaway. In 1998, for example, history shows that raising a few million bucks for an idea in exchange for equity was an oft-executed strategy. Ideas were pitched, easy money flowed, execution happened in pockets and many succeeded and others did not. Between then an now, private capital has shrunk by 89% (Matt’s data – see the slides when they’re up at the Biz) while ideas multiply daily.
Entrepreneurs, therefore, have evolved with the market. Many have realized that germinating the idea with a very select, core team of employees/partners can take the idea from thought to action. The same ideas can be further developed one or more times into a product and potentially monetized early. Bo Fishback’s presentation from BigOmaha about the birth to release of Zaarly is representative of such evolution. Though Zaarly has received funding already, it was working on its idea long before $$ came in the door.
So, entrepreneurs who focus on transforming their idea to reality and can demonstrate the product seem to have a better shot at market success, whether it is through demonstrable product for raising $$ or toward outright positive cash flow through monetization of their idea.
Where are you heading?
I just came back from the BigOmaha conference presented by Silicon Prairie News. Held at Kaneko in downtown Omaha, this conference brought together people with ideas big and small. Some ideas were hatching, others had formed billion dollar businesses. Yet, the energy kept the audience hopping, the phones parked and the ears intently listened. How the heck did 500 people suddenly gather in flyover country, mingling with wantrepreneurs, entrepreneurs, press, government, friends and, yes – in Omaha, NE – even a live cow.
The Des Moines participants turned out in full support representing Dwolla, Entrepreneurial Technologies, Far Reach Technologies, Brown Winick Law, 48Web, Scoreyard and more. The lineup of speakers had been impressive to read about, but reality rocked the bios and speakers managed to excite, inspire and challenge throughout the day. I was gratified to see B Companies use the opportunity to inspire social entrepreneurship in so many sessions, inspiring me to not only learn from organizations like SamaSource, Ecko and Warby Parker, but also go out an buy their products.
Though this was my first conference where the idea of startups was the connecting theme, it certainly wasn’t the first business building exercise. I was often reminded of lessons learnt from speakers like Mahan Khalsa and Jim Cecil from Microsoft’s now rebranded Fusion conference. Where speakers previously spoke of how to build businesses, the focus now was purely the execution of ideas, continuous improvement, growth and deal flow.
The five key takeaways for me were –
1. Ideas are a dime a dozen; execution is key!
2. Your legacy is how your family remembers you when you’re gone – so why do you give a damn about the world?
3. Successful execution requires guts, paranoia, risk aversion and unwillingness to take no for an answer
4. Awesome innovation is happening all over this ‘flyover’ zone called the midwest
5. Startup Weekend, Thinciowa, BigOmaha, Startup Drinks and Techbrew like events are juice for the entrepreneurial soul – don’t miss any of them!