A decade of collaboration

November 17, 2010.

How to be a successful startup

I had no idea a chance meeting with Mike on the Mercy Hospital skywalk would lead to a decade of collaboration and friendship. I mentioned that I wanted to help tech companies get started in Des Moines. He, in turn, asked if I had time to go to lunch with another colleague who wanted the same. Mike and I ended up at Proof and talked until Christian arrived. Of the many serendipitous moments in Des Moines startup community’s history, I know and am glad I got to be part of this one.

As Mike transitions to a retirement from *this* job as the entrepreneur-whisperer in Des Moines, his friends know he can’t really retire. Have you ever not seen him working? He’s retired more than once before, and this retirement will prove to be but a transition again.

I am grateful for having been a part of Mike’s circle of friends, where we were able to conjure up, make real, or grow ideas such as StartupCity Des Moines, Plains Angels, Global Insurance Accelerator, Accelerate, Iowa Agtech Accelerator and so much more. So, when I first learned of a new love affair with Colorado, I knew his time in Des Moines was limited. With his imminent departure from Des Moines, I know he’ll be missed by this circle of friends and colleagues, fellow angel investors, entrepreneurs, corporate partners and his colleagues at the Partnership.

I’ll miss our regular (vegetarian – his style) lunches at Centro – made rare by the pandemic, and sadly rarer now in the future by the distance.

Bon voyage, Mike and Beth. You are wonderful friends and I am glad we had lunch at Proof on November 17, 2010.

When taking care of employees matters

I saw the newsflashes this afternoon about how Costco had just had a stellar November and beat analyst expectations. This despite their decision to stay closed on Thanksgiving day and bucking the trend established by their competition. Bravo, Costco; I’m glad to be a shareholder and a part of your ‘extended’ family.

Costco came to the Des Moines metro about ten years ago, opening its warehouse in the newest commercial district around the Jordan Creek mall. My dad, a retired worker keeping himself busy working at a local grocer decided to give employment there a try. I remember his interview process well, and he was hired as temporary staff over the holidays. Each time we spoke that winter, I heard things from him about this employer that were different than any other in his prior life. He had spent a majority of his life working at the US Embassy in New Delhi, India and had risen from a low wage job to a fairly critical position. Once retired, he came to Iowa and has lived and worked here ever since. Despite his experiences working for the embassy, the benefits, the management style, and the work ethic expected and developed seemed remarkable.
I had just read Jim Collins’ book, Good to Great, (G2G) and kept hearing things about Costco from my dad that sounded eerily like those of “great” companies in Collins’ research. So, like I had invested in most of the G2G companies, I bought Costco stock over the next several months. All in all, I dollar cost averaged my purchases over a six month period.  My cost basis for these purchases amounts to about $46 a share.
As dad’s employment continued and age happened, I continued to marvel at how the company worked with him – accommodating his age, restrictions, style, idiosyncrasies and all. I had to assume this was the norm – and saw this in employees’ faces at each shopping trip. I held onto the stock.
Costco sells higher-end merchandise than the normal grocer or home improvement store. I like to refer to Costco as the ‘bulk Target’. Sort of like Sams Club being the bulk Walmart. I’ve enjoyed their Kirkland branded beer, milk, vodka, breads, coffee and much more. A weekly trip is norm for me, and the adage that Costco has a ‘minimum $100 spend’ holds true for me – not because they force it, but because I can usually fill most of my grocery items there. At a great price. With traffic increasing per their annual reports, I held onto the stock.
It was encouraging to see that Costco retained its policy of putting employees first this Thanksgiving. When the doorbusters and Thursday sales were driving America’s craziness, not only did Costco remain closed, it didn’t seem to put notices up about being closed. There were no apologies masked as notices from Costco. It was closed so employees could stay with their families.
I am glad they did… sales up. Customers up. Volume up. Stock up.

Machines need TLC too….

My 11-year old snowblower began making harsh, jerky movements during its most recent use. Though I ignore the jerkiness for a bit, knowing oil etc. were freshly checked and replaced, I made a mental note to check it out once done. I was dismayed to find, once back in the garage, that the metal beneath the auger blades was ripped-up, bent, broken, and destroyed. The shave plate was still there but the body behind it was gone.

source: wikipedia

I had to make a decision on whether to buy a new snowblower and trash this one, call a repair shop and spend a couple of hundred bucks and wait two weeks, or just slice off the metal and hope for the best. Being American in the 2000s, I was heavily leaning toward the first option.
It was then I remembered my neighbor’s son who had asked me last winter about any odd-jobs related to small engine repair items. It is his hobby and he dabbles in all sorts of machines. Jake came over to look and instantly suggested that we buy a new shave plate and skid shoes for the blower and he’d cut the bent-up and rusted portions of the body, cut a new piece of metal from his stock and weld it to the body. He’d then drill new holes and attach the shave and skid plates. All I’d need to do is paint the new surfaces. Again, being a member of the ‘new’ economy of throw and re-buy, I distrusted him, but the old green-cred and the desire not to throw away two hundred pounds of metal and engine won. I had him check out the machine, buy the parts locally and take my snowblower late Thursday evening.
I was surprised, then to find the snowblower sitting outside my garage FRIDAY morning. Jake had taken it Thu evening and spent a couple of hours cutting, welding, shaving, drilling and returning my snowblower to usable status. Bent edges were fixed and the machine was good as new. I simply owed him for the parts and labor. But before giving me an invoice he went a step further and told me exactly what I needed to do to make sure this doesn’t happen again – rebalance my snowblower prior to storage. Though the steps are well documented at Sears, Lowes, etc. (see here), I’d never bothered reading or following. Stupid Stupid Stupid.
I might have to give this repair thing a shot more often. And not forget that there are real skills still being learnt by young people in this country who love machines – making them, repairing them, using them, and modding them. We need them!
Now, to dig out similar maintenance sheets for my camera, lawn mower, trimmer, and other machines I rely on regularly. And to move Jake’s number to my speed dial!

Do we care enough to buy-fresh-buy-local?

There has been a movement underway to return to buy-fresh-buy-local.  Whether initiated as a corporate gesture with Des 4395_95732896643_696607_nMoines’ campaign for “Buy into the circle” or through the various farmers markets, it urges us (consumers) to connect with the product we buy.  When we buy a corporate product (i.e. mass-produced product), we lose our connection to the soul of the product – regardless of what the product may be.
I once argued strongly on this position with the then CEO and Chairman of a large insurer in Des Moines who was initiating a offshoring undertaking.  My position was that the company’s bread and butter business came from small businesses – a fact the company touted in its marketing.  Yet, through the very act of offshoring, it was going to disconnect from the small businesses – the consulting and IT shops in Des Moines, and lose not only their insurance business as their profits dropped, but potentially because the firms themselves would be out of businesses in short order.  It went against Thomas Friedman’s “The World is Flat” journal, and it went against bottom lines of the insurance company, but I argued, that it would be better for the community if the company were to continue nurturing  its local economy to the fullest.  The landscape is markedly different today, with the mid-sized firms mostly non-existent from the software and services marketplace, replaced instead by the mega-outsourcers or those with tiny groups of developers with rare exceptions buying the company’s products (from my informal email surveys…).
Though I am not as well traveled as many, I do see the spirit of supporting your community alive in UK, Italy, and now Germany.  Pick up a tiny plastic watering can and turn it over – Made in Germany.  See the cars on the road – German, bread and rolls sold in a gas station – being baked by the cashier behind the counter (Casey’s style!), hotel checkout receipts with the name of the proprietor who owns it – in today’s case “The Armatowski Family”.   It was alive in London and Cornwall, Rome and Florence, and just as I remember from the city of New Delhi.  You can’t help but have a different connection with the product you’re using or buying when a human being is attached to it.
I think it will take a lot more than us buying some fresh produce from the seasonal farmers  markets – if we want a true buy-fresh-buy-local, we will need to seek out the people who sell us everything from food and lodging to our goods and services, software, insurance, lawn care, pest control, car repair, office supplies, and much more.
If we don’t know who we are buying from, do we really connect with them enough to care?

A Tale of two Johnstons

The citizens of Johnston came out in a democratic voice yesterday and denied the school board the ability to raise $51MM in debt via municipal bonds to build a new high school.  Participation in this process showed me two views of my community that I’d like to share here, but first a brief intro to the project.
The Johnston public school district is growing and is projected increase by 1100 over the next 8 years.  After the past decade of improvements to elementary and middle schools, the district turned its attention to the aging high school, built in the 70s (when population was growing from 270 toward 2500 per the 70s and 80s census’), already overcrowded and aching for support.  After much consternation, the district presented a proposal to the community via public townhalls, participatory meetings and volumes of data.  This proposal, though not perfect, was a result of community interaction and changes were still possible if this vote had been approved.
The tombstone of the proposal is still available.  I was glad to attend two of the four public meetings and had my questions about the finances answered and voted yes on the proposal on 9/11/12.  Apparently a majority of Johnston residents who voted agreed this was important, but the votes weren’t sufficient for passage (the proposal received 55% support vs the 60% needed).
The Johnston that is engaged and one that isn’t….
I was able to attend two of of the four public sessions on this issue.  Scanning the Johnston middle school auditorium both times, I saw about 100 people in the room  comprising district employees, Principals, teachers and parents.  I saw the city Mayor, press and commercial partners.  In those two meetings, about 400 (eyeballed, not scientific count) of the city’s 17,550+ residents heard the case for (or against) the new project, the school and its cost in these four meetings.  Even if twice that number saw the detailed materials for the school on the district website, that represents less than 10% of our city engaged in a fairly important local issue.  Not very representative of a democratic society.
The east vs. the west side of Johnston
I was glad to hear comments from residents of the old Johnston – the one from 70s and 80s when the city was still <2500 people.  That Johnston is no more.  It will never be that Johnston again.  The complaints from the historic neighborhoods of Johnston that the new sections are causing this need for growth were interesting, but irrelevant.  Of course the new neighborhoods cause growth when new people move in.  The new neighborhoods are high valued properties paying their fair share in higher property taxes.  The formula for taxes is linear — 99 cents per $1000 in valuation.
The affected vs. the unaffected Johnston
WHO Radio asked me if I’d support the bond issue if my kids weren’t currently enrolled.  Of course I would — we grow as a community of residents, workers and corporations when we see an investment in the future.  The small and large corporate citizens of Johnston don’t exist here because this land is cheap – they exist partly because there is (was?) a higher focus on education in our community.  They see their future workforce learning in our K12 schools.  Their employees reside in our neighborhoods.  Though I wasn’t a product of Johnston’s school system (growing up in India makes it hard to ride the school bus across 12 time zones), I understand that we as a community invest in the WHOLE community.  If we expect to pay for every service received AT the time of receiving it, we need to plan for and begin a transition to a fully privatized school system or get educated in the art and science of homeschooling.

But we also believe in something called citizenship – a word at the very heart of our founding, at the very essence of our democracy; the idea that this country only works when we accept certain obligations to one another, and to future generations.”
–President Barack Obama, September 2012

Participatory vs. Spectator Johnston
About 4800 people voted on Sept 11. 2012 in this election out of the 17,550+ residents of whom about 12,000 are of voting age (data from US Census).  About a quarter of the city’s population participated in setting a direction for the city’s non-voting population.  That non-voting populace is 100% our future that will now receive their education in:

    • mobile classrooms
    • crowded hallways
    • aging classrooms constructed in the 1970s
  • aging stadium

Or, perhaps some of the families will begin contemplating a move to Ankeny, Waukee, SE Polk and other school districts where the citizens have approved an investment in education.
Des Moines Register Coverage

When I built a business all on my own

I recently received an invitation to a breakfast meeting of local conservative group.  Though I wear my political affiliation on my sleeve, on Facebook and voter registration clearly, the invitation wasn’t unusual because it came from a long-time friend who is deeply involved in the community.  What was unusual was how the invite ended —
“If you are a small business owner, remember:  You did not build your business, somebody (ie. Government) did it for you ????????”
The surprise wasn’t that the email contained the above rhetoric that has been emblematic of current politics.  The surprise is that it came from someone I hold in high regard for helping me build my business 17 years ago.  I’d left the protections of the large corporation and its benefits and had worked in my basement, writing software, for 6 months.  When a second big customer came through, I approached a prior co-worker to help with the new work.  His core requirement for moving was, even then, insurance so I went looking, unsuccessfully for insurance.  When the large insurers in town scoffed at our small group size of two, one small, family owned business accepted the challenge.  He went to bat for us with Principal Financial, Blue Cross Blue Shield and others and found our tiny group of two a policy that was acceptable, affordable and competitive.  We stayed with his brokerage for the next 15 years.  His and his team’s work helped attract future employees to the company and helped us grow.
He was not the only one who helped, but was one of the few.
Similarly, customers like Terry DeRoin of Nestle Food Company, helped me grow.  I had been doing contract coding work in 1994, when a chance referral from Microsoft Solution Provider program landed a fax at my desk.  Terry, a controller for the Waverly plant, had looked at software developers in Iowa before and was largely unhappy.  When he came to my house in March of ’94, I happened to be in sweats and a t-shirt (him in a suit!).  He did hire me after looking at sample code and gave me months and years of work that took me from tiny revenue to significant amounts.  Without his initial work, who knows if I could’ve even hired employee #1.
Leaders of Federal and State government agencies helped my previous company grow when they selected a company from Des Moines, Iowa for their critical projects over much larger companies in the US and abroad.  Today, StartupCity exists because local, state and corporate leaders have lent their support behind a mission and dream we shared with them.  Government agencies — Des Moines Councilmembers, County Supervisors, Director of Economic Development or the Governor’s office — all contribute heavily to our existence.  Mentorship from leaders of the Des Moines Partnership (indirectly the Des Moines business community) remains critical in our beginnings and current work.
My work today is that of a mentor and advisor to nascent companies.  I do it voluntarily, with no promise of income or revenue, not because I have nothing else to do.  I do it because since my arrival in the US, people like Elaine and Ralph Jaarsma of Pella instilled the volunteer spirit in me.  They spent extremely valuable time on me, a foreign student, to enter the Iowan work ethic.  They showed me how a tiny bakery in a town of 8000 people had national reach, how their work from 2:30 every morning till the end of the day, and their dedication to their community defined their success.  Despite their successes and life’s challenges, they continue to embody the volunteer spirit of helping others.
Dozens of new entrepreneurs benefit from the numerous city and business leaders who give up their personal time, early and late on weekdays and weekends to help companies.  In Des Moines, watch Bankers Trust CEO Suku Radia, for example, challenge and guide entrepreneur after entrepreneur in his office, coffee shops and city spots, and you’ll see the tireless spirit adding value to companies.  Watch the dozens of meetings Mike Colwell at the BIZ arranges in the city to supercharge people’s businesses, and you’ll know it takes a village.  Ayn Rand followers know that every Howard Roark has a Mike, a Cameron and a Dominique who challenged him and, in turn, guided him.
Business owners know who helped them along the way – from teachers, spouses, family, mentors, employees and customers.    I don’t know what selective listening candidate Romney was practicing that made him miss the boldfaced text below, but I stand with the President’s speech –

“Let me tell you something. There are a whole bunch of hardworking people out there. If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that.”

I was inclined to go to the breakfast meeting tomorrow and make a snarky remark about the irony of the message.  But that would be disrespectful to someone I hold in very high regard; I hope he knows how many tiny businesses he helped grow over his remarkable career and continues to support daily.

Immigration issues – revisited in DC

There is an eerie consensus across the aisle in DC that our current immigration system is broken, in need of reform, and change is necessary for the long term economic growth.  There is little consensus on how such reform will be achieved, who will lead it, and what will eventually motivate Congress into action.
Human Capital, impacted by immigration, was one of the core topics of the Des Moines Partnership’s DC trip this spring and I am privileged in being able to join business and government leaders from our region on this trip.  I am certainly privileged to work with Lori Chesser from the Davis Brown Law firm and invited to a panel on immigration.
The panel, consisting of Rosemary Gutierrez and David Johns from Sen Harkin’s office, Kathy Neubel Kovarik from Sen Grassley’s office, Aaron Brickman from Department of Commerce, Ben Johnson from American Immigration Council, and moderated by Lori Chesser was attended by various members of the Des Moines community and focused significantly on answering questions from the audience and thus remaining very interactive.
There are three forms of legal immigration today – 1) marriage to a US citizen, 2) sponsorship by an employer, or 3) sponsorship by an American citizen family member.  Being involved in all three forms, I felt comfortable contributing my experience and need for policy changes and bills currently circulating in DC.  I am married to a natural born US citizen from Iowa,  have sponsored, on my previous company’s behalf, several H1b candidates from India, Nepal, Indonesia and Vietnam, many of who are taxpaying residents, green card holders, naturalized citizens and contributors to Iowa and the US economy.  I am also sponsoring my sister, a Malaysian citizen to the US.
What is broken and in need of fix are the second and third categories.  Whether it is the HR3012 bill that allows green cards to be issued from the available pool rather than be artificially limited, the proposed StartupVisa that allows for foreign entrepreneurs to start their businesses in the US when sponsored by an accredited US investor, the DREAM act  or others, several solutions exist and are available to Congress.
What I heard from many during this recent visit to DC was that many in Congress would rather wait for a comprehensive immigration reform.  Both Senators’ offices comments were consistent that they prefer comprehensive reform such that visas should not take jobs from US workers, college seats from native US students, be considered comprehensively and not piecemeal etc.
Though a desire for comprehensive reform is respectable, Congress hasn’t shown an ability to work together toward real reform in my voting life in the US.  Furthermore, careers in STEM fields continue to be underfilled by software developers, doctors and  engineers.  Companies large and small, represented in the audience for our forum, continue needing to offshore their work in absence of sufficient resources here.
As Jim Clifton so clearly pointed out in Coming Jobs War, there is a marked change underway worldwide.  Qualified technology workers are finding an ability to find careers overseas and no longer want to stand in line as second-class citizens in the US.  Recent news reports are listed net-immigration from Mexico even to be zero, resulting in shifts even in the agricultural economies of Texas, Florida and California.    People are finding opportunities elsewhere in the world, and if we are unable or unwilling to bring job-seekers here, our companies will be sending the jobs overseas.
My message to the congressional representatives and other members on the panel was clear –

  1. We can’t wait for comprehensive reform.  To stem the outflow of jobs, we must tweak our immigration policy through bills like the HR3012 that received significant support in the house (373-15) but remain stuck in the Senate.
  2. Small and new businesses are the job creators.  Startups, a subset of the new businesses, are the high growth leaders in wealth creation that leads to more job creators.  The StartupVisa, as introduced by Kerry and Luger in 2011 needs to be addressed in Congress.
  3. Our colleges and universities are global leaders in education and attract students from around the world.  As we graduate them and give them options to intern/train via OPT/CPT statutes, we should allow them the ability to apply for a green card and legal employment at the end of the practical training rather than subject them to 3-10 years of servitude via the H1b program.  These students represent a large community of individuals who are establishing strong ties to America – we need to grow through them.
  4. Our schools and colleges are not graduating needed numbers of STEM fields.  While we build that population up through K-12 systems over the next 20-30 years, we should make our universities and colleges attractive globally through a foreign student program as attractive as the one I used when entering this US in the 1980s.
  5. The DREAM Act proposes to give children of illegal immigrants a legal way to stay in the country.  Whether it is the original Dream act or the modified version by Senator Marco Rubio, the purpose is the same – keep and grow with those who love and cherish America.

We do not have time for comprehensive reform, or does Congress show any willingness to bridge the divide, specially in this election year and beyond.    If you have any doubts about our place in the world, pickup a copy of Jim Clifton’s Coming Jobs War or Thomas Friedman’s many tomes, including That Used to be Us.

Entrepreneurship in the Arts

The Des Moines performing arts community grew an inch last week through the performance of the Wizard of Oz. Though the show came to life after a year of planning and design, it actually represented a multi-year milestone for Ballet Des Moines. Under Serkan Hasanusta’s passionate eye, the Ballet showed how entrepreneurship is alive in the arts.
 BDM re-launched as an organization in 2006 and has brought many performances to Hoyt Sherman and Civic Center. Though attracting dancers with national stage presence has never been difficult for the professional duo of Serkan and his wife, Lori Grooters, Des Moines hasn’t had a ballet company for sometime, with its own local dancers who produce, train and perform regularly. Serkan and Lori serve as creative director and ballet mistress for Ballet Des Moines and concurrently teach hundreds of dancers at their school, the School of Classical Ballet and Dance).  Working with the Ballet board and larger arts community, they have dreamt of and realized the possibility of a full professional ballet company in Des Moines. In 2011, BDM committed to and brought Alice in Wonderland to the Des Moines stage with 300+ area local dancers with professionals, sets and music coming in from outside Des Moines. The Des Moines community orchestra brought the music to life and Serkan knew he had the building blocks. He pitched the grand vision of the Wizard of Oz. It was an audacious goal, a serious investment, and a production worth calling our launch event.
The story of the Wizard of Oz was brought to American book lovers in 1909 and has captured the hearts and minds of children and adults since. It was natural, therefore, to involve young dancers, aspiring ballerinas, pre-professional men and women, and professional dancers. Serkan managed the cast through painstaking auditions supported by Lori and several instructors. He built a vision for the costumes during this audition and decided to build his own costume trove. BDM has been blessed with our own master costume mistress, Ashley O’Keeffe, who created, edited and designed many costumes. Serkan’s quest for costumes took him to his native Turkey where iPhone facetime based video conference calls between Ashley and Serkan facilitated live design meetings.
He built the sets here in Des Moines with craftsmen such as Felix, who have managed the sets for the Nutcracker, Alice and more. With significant support from Christine Branstad who donated the use of her family’s facility to build the sets elaborate sets containing Dorothy’s house, forest, Oz and Kansas were built and transported to the Civic Center. The show was boosted by the flying witch, the tornado, flying monkeys and lava flow – all created here in Des Moines under the watchful eye.
Naturally, last week on April 7th, I walked into the Civic Center a week ago with palpitation. I knew the show would be as good as I had seen rehearsals. From curtain up to curtain down, however, the show was magical. 150+ children ranging in age from 7 to 17 became munchkins, flowers, monkeys, guards, and more. There were farm hands, witches, Auntie Em and the Wizard. The Tin Man squeaked, the lion trembled in fear and the scarecrow was pliable like clay. Dorothy seemed to effortlessly float from Kansas to Oz and back. Lava flowed and the witch flew. When the curtain finally came down, the unprecedented crowd filling the Civic Center instantly rose to a standing ovation
Scenes from the Ballet (requires Facebook login)
Creative entrepreneurs can mold beauty from clay and Serkan has delivered just that. Watching him work from the sidelines has been pure joy for me, both as a parent of one of his pupils and as a board member for the Ballet. He outlined a big, hairy, audacious goal and executed. He didn’t have all the answers but learned daily and pivoted. The production had a bottom line with stakeholders who trusted and sponsored the vision, parents who drove kids back and forth, contractors who executed minutiae, and volunteers who ran the floor and backstage. Serkan knew these variables, managed these variables, and managed to inject passion at every step.
Des Moines is lucky to have visionary entrepreneurs in the arts who invest their passion in our communities.
Communities grow when they’re enriched by the arts and Des Moines has made significant commitments in venues, organizations, people and promotion of the arts. Ballet Des Moines is one such supported organization that brings its namesake dance form to area events. I am proud to serve as a parent of a young dancer on the organization’s board.

Every business doesn't begin with millions in cash

There is ample news about the idea that popped into an entrepreneur’s head in the shower, the demo was created by lunch, VCs lined up to lend money by dinner and acquisition happened in the quarter that followed.  Scant attention is shared about those who logged 60 hours a week developing a business while holding down a 40-hour square job, worked for years to build revenue, adjusting the model along the way until finding success in the trenches.
It is interesting to be surrounded by those who have done just that in the Des Moines technology ecosystem.  Des Moines’ dmJuice recently published an article about my friend, relative and partner, Erin Ginkens’ Entrepreneurial Technologies.  The article highlights the company’s evolution from a product company to service and now a hybrid.  Hard work is reflected remarkably in the creation of Tablenabbr, a mobile phone application that helps potential diners find restaurants with open tables in real time.
Similarly, the story of Brian Hemesath, the CEO of Catchwind and President of VolunteerLocal and involved in other endeavors, takes us through a decade of work.  Brian’s work has enriched the local technology ecosystem and his helpful presence at Des Moines startup events is inspirational to aspiring startups.  If you haven’t had a chance to hear his story, September 21st presents a great opportunity to hear him speak at the BIZ’s luncheon series, aptly titled Lessons Learned while Bootstrapping Business: The Non-Fundraising Path.
Bootstrapping is a strategy that works when designing a business driven by a need/desire for organic growth, a product that is largely service based with the entrepreneur’s expertise in delivering the product, secured by rock solid IP, and/or the unavailability of external money to fuel growth.  It rarely works when time to market is paramount and competition is circling your customers and employees.
Whichever strategy you choose — know that resources are available to discuss, quantify, qualify and critique your business model.  My local community is filled with events that support bootstrappers, angel funded and VC funded enterprises.  Find them, talk to them, share their experience and learn from their mistakes — I know that after 29 years in technology, 18 years in small-business and a year into a sabbatical, I still am.

Successful entrepreneurs evolve

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?