Month: May 2011

Happy Two Year Anniversary Capital Entrepreneurs

It’s been two years since I started Capital Entrepreneurs, an organization to help Madison entrepreneurs connect. I’ve been blown away by how fast CE has grown and how quickly time has gone by.  On our two year anniversary, here’s the story of how we got to where we are today.

In April 2009, I was a month short of gruduating from UW.  I had just started my second company, Entrustet, with my business partner Jesse Davis.  Many of our friends were taking jobs outside of Madison and the two of us were going to be staying in Madison to startup Entrustet.  We both had been a part of the UW entrepreneur scene and had received support from other students, professors and the university itself, but since we were graduating, we were worried that we would not be able to take advantage of the support system any more.

I realized that most people make new friends after college via their job, but since Jesse and I were the only people in our company, I worried that we’d get isolated.  I knew that there were other founders in town who were graduating who likely felt the same and wanted to do something make us more like coworkers, even though we were all working on separate businesses.

I’d been to most of the startup focused meetups and events around town and thought that there was a niche for a group that was specifically for founders that could compliment the existing networking events like High Tech Happy Hour and Madison Magnet.  I wanted to create a place where founders could get to know each other, hang out and talk freely about their problems, dreams and goals, without having to worry about getting pitched by attorneys, insurance agents, accounts or the press.  I wanted a place where ideas flowed freely and entrepreneurs would feel comfortable both asking for help.  I wanted it to be free and without structure.  I wanted Madison’s entrepreneurs to be a community of friends, not a disparate group of people who just happened to start companies.

At the end of April, I talked to a few of my entrepreneur friends and asked them what they thought.  Everyone loved the idea, so I started to look for a venue that would give us a private space for free, along with some other enticement to get our business.  Our friends at Brocach gave us a space in their upstairs bar, along with a nice food special and we set our first meeting.  I invited all of my friends who met two simple rules.  They were:

  1. The founder or first employee of a Madison business
  2. Were not a service provider like an attorney, accountant, insurance agent

Our first meeting was right before graudation in May 2009.  Around 10 founders showed up.  We introduced ourselves, had beers and talked.  It was great.  We decided to do a second meeting that next month.  I quickly realized that Madison entrepreneurs were doing some amazing things, but that the rest of the community had no idea.  So I started a website.  It’s a simple blog that gets updates whenever a CE company gets press, sends out a press release or the city itself makes news.  It also includes a list of member companies, resources for Madison’s startups, along with info on how to join.

Since May 2009, CE has grown slowly, but surely each month.  The second meeting had 12 founders, the 4th 17.  It just kept growing.  One year later, CE had 34 member companies and 60 registered members.  As we grew, service providers wanted to attend to meet the entrepreneurs.  We decided service providers could sponsor CE and attend ONE meeting per year.  At that meeting, they are not allowed to sell their services, just answer questions and get to know the entrepreneurs.  They also have to pay for our bar tab.

We were lucky enough that Neider and Boucher, Michael Best, Boardman Law Firm, Marquette Golden Angels and Venture Investors agreed to be our first sponsors.  Sponsorship worked out great for CE and the sponsors.  It was a great way for entrepreneurs to get to know service providers and for the service providers to get to know us.  It was also a great way to attract new, high growth clients.

CE continued to grow, but I was a little worried when Jesse and I got selected for the Startup Chile programForrest Woolworth stepped up and ran CE while I was gone and did an amazing job.  Over the last year and especially in the last six months, CE has started to take off.  We now have over 75 member companies and 120 people on the email list.  We’ve been featured in Techcrunch, Read Write Web, Madison Magazine and tons of other publications.

Member companies have been featured in the NY Times, The Economist, Financial Times, Wall Street Journal, Techcrunch, Mashabale, Forbes, BBC and hundreds of other influential blogs, newspapers and magazines.  CE companies have created over 300 full and part time jobs during one of the worst economies in recent history.  We’ve raise over $15m in funding.  Spinback, founded by CE alumni Andrew Ferenci and Corey Capasso, was acquired.  Spill, founded by CE alum Heidi Allstop was selected for Techstars.  My company, Entrustet, was selected for Startup Chile.  CE members have been instrumental in helping start the Forward Technology Conference, Build Madison and other entrepreneurship initiatives in Madison.

Madison’s startup scene has grown significantly in the past few years and I’m excited and proud that CE has been a part of it.  I can’t wait to see what the Madison startup scene looks like in another year!  I’d like to thank everyone who’s helped make Capital Entrepreneurs what it is today.  It would never have been a success without all of your help!

Wow! Food is Expensive!

I just made my first trip to the supermarket after coming back to the states today.  It was amazing to see how much more expensive food is than when I left.  I had read that food prices had gone up, but I hadn’t realized how bad it was.  I bought three bags of groceries and it cost $68.  The same three bags would have cost about $55 when I left.  The most jarring examples were meat, boxed cereal and dairy products.

Chicken breasts are now up to $7 per pound, up from $4.50.  Beef stew meat is $3.99, up from $2.50.  A box of frosted mini wheats $4.75, up from $4.  Premium deli roast beef $10.50, on sale, up from $8.50 when I left.  It’s crazy.  My favorite sandwich shop raised prices from $5 to $5.50 and my favorite bagel store raised prices by $1.

So why are prices so much higher?  It’s a confluence of government policy, a falling dollar, rising commodity prices, mandates for corn based ethanol and crop failures around the world.  In the last six months, corn has nearly tripled in price.  Farmers feed corn to chickens, pigs and sometimes cows.  Add in higher fuel prices for transportation and you get much higher prices.  Pork has gone up 33%. Beef at least 12%. Chicken at least 10%. Wheat 25%.

The government claims that inflation is 1.8%, but since it does not include food and fuel, it’s a completely meaningless number.  When I left in November, the average price of a gallon of gas was $2.85.  Now it’s $3.96, a 39% increase.

Rising food and fuel prices disproportionately hurt the middle class, the poor and seniors on fixed income.  Food and fuel make up a larger portion of the monthly budget for those who are not wealthy.  Government policy is to blame.  Instead of letting banks and bondholders take losses, the Federal Reserve cut interest rates in an attempt to let the banks earn their way back to solvency.  Low rates hurt savers and retirees who put their money into CDs, money markets and savings accounts.

On the other hand, banks can borrow from the Fed for virtually nothing and led it back to the government at 3%, generating 100% risk free profits.  With “quantitative easing,” which is just another name for printing money, the value of the dollar is falling quickly.  Since commodities are priced in dollars, it takes more dollars to buy goods.

Government policy is to bail out the banks at the expense of the poor, those on a fixed income and the middle class.  It started under Bush and has accelerated under Obama.  I don’t understand why more people aren’t outraged.

I Can Feel the Tension in the Air

I got back to the US on Sunday after living in Chile for the past six months and one of the first things I noticed was the tension in the air.  People seem on edge, ready to jump at the smallest things.  People are scared.  We’re living in an era of extreme change, taking place at an unprecedented pace.  Most Americans have not experienced hard times.  Yes, there have been recessions, but nothing that compares to the confluence of events that has caused our current predicament.  We’re in the biggest era of change since the industrial revolution.  The recession started almost three years ago, but the mood of the country seems to have soured noticeably in the past six months.

I can see it on Facebook and Twitter in the status updates of my friends and network.  I can see it in the moods of my friends without jobs or stuck in dead en jobs.  I can see it in the blogosphere, cable news, the looks on people’s faces walking around town and how people are treating each other.  I saw it in the airport security line in NYC as the TSA employees and passengers struggled to interact civally.  I saw it on my flight to Milwaukee when two women got in a fight over a reclining seat.  It’s especially evident in Wisconsin with the current administration and counter protesters.  The anger, tension and fear is there.

Beyond the recession, our political climate is toxic and people feel powerless to make their lives better.  It used to be that if you worked hard, got a good education, you’d get a good job and be able to support yourself and live well.  Both the left and the right are getting more extreme and the center is increasinly empty, silent or powerless.  The reasonable center is afraid to speak up, or believes they can’t do anything.  In order to be heard, the reasobable center is moving to the margins and becoming more extreme, or just checking out entirely.

Our politicians are not willing to do what is actually best for the country, they are simply trying to win political points and get reelected.  There are hundreds of policies that both sides could likely agree on, but will never get voted on because they do not win political points.  Both sides are cultivating the us vs. them narrative and becoming more extreme.  Reasonable political discussions are almost impossible.  You risk getting your head bitten off.

Democrats are playing the class card, but doing it poorly.  There’s a difference between a rich small business owner or entrepreneur and the finance guys who are just moving money around.  Republicans are attempting to cut social programs, while keeping taxes low for the rich and demonizing the people who are not finding success in this economy.  Many on the right are anti intellectual, under the guise of anti elitism.

Well intentioned guys like President Obama and Representative Paul Ryan have never had a private meeting, even though they are trying to fix the same problems.  Although they don’t agree, leaders should be talking.  But they don’t.  Both sides look for outlandish claims to punish new thinking.  President Obama equated Ryan’s plan with murdering old people and the Republicans have come with all sorts of nonsense to attack the President. Nothing will get done if we keep going down this path.

People have a feeling that the game is rigged, but they don’t think they can do anything about it.  Every week, there’s another scandal, but people dont seem to react.  People know they are getting fucked by the banks, their government, insurance companies and other lobbying groups, but they don’t have any idea how to fix the situation.  They feel powerless and this leads to tension, anger and the current mood of the country.

It was really jarring to come back to the US and feel the tension.  The reasonable center needs to start speaking up, challenging both sides and demanding compromise.  We need to stop dealing in half true soundbites and start actually talking.  We need to demand more from ourselves and our politicians.  We can’t keep going on this way.

Lo Que Dije Al Presidente

El jueves pasado, tuve la oportunidad de contar mis experiencias en mis seis meses en Chile como parte del programa Start-Up Chile en un reunión con Geeks on a Plane, Startup Chile y el Presidente de Chile, Sebastián Piñera.

Cuando llegué a Chile, solo hablaba un poco de español, y nunca en mis sueños pensé que tendría la oportunidad de dar un discurso en un desayuno con el Presidente y un publico de mas de cien personas y cámaras de la prensa. Eso es lo que dije al Presidente Piñera y el resto del publico.

Hola, me llamo Nathan Lustig y soy el cofundador de Entrustet, la séptima compañía que llego a Santiago para Start-up Chile. Quiero decir gracias al Presidente Piñera para invitarnos a este desayuno y por la oportunidad de hablar un poco de Startup Chile.

En septiembre, vi un articulo en Techcrunch sobre la oportunidad de mudar mi compañía a Chile para seis meses. Llené la pagina web y cuatro semanas después, nos eligieron para el programa. Cuando llegué, no sabía mucho del programa, solo sabía que podría trabajar en mi compañía en otro lugar y con una beca. La oportunidad de evitar invierno en Wisconisn sólo fue un incentivo.

Ahora, seis meses después, mi tiempo en Chile está terminando. Puedo decir que estos meses fueron unos de los mejores meses de mi vida. Progresamos mucho en Entrustet pero más que eso, nos hicimos Buenos amigos con los emprendedores del programa. Nos hemos conectados al red de emprendimiento en Chile y hicimos amigos Chilenos dentro y fuera del programa.

Ahora, quiero hablar sobre el programa. Como dijo Jean [Boudegur], Start-up Chile, es un emprendimiento en si mismo y ahora esta creciendo muy rápido. Cien equipos van a llegar en los próximos dos meses. Quiero decir gracias a todos los personas en el gobierno porque sin su permiso, este programa innovadora no tendría éxito. Quiero decir gracias a todos los personas que trabaja en startup chile.

Este programa es muy especial, Creo que mucha gente no entiende eso, especialmente Chilenos. Cuando hablo a mis amigos sobre el programa, me dicen “si Chile puede hacerlo, otro países pueden. Pero en realidad, no. Este tipo de programa nunca ha ocurrido en estados unidos o Europa. El programa es el programa de gobierno mas innovador que he visto en mi vida y todos los Chilenos deberían estar orgullosos.

Han hecho algo magnifico que es el comienzo de algo increíble. Quiero ver como crecen el programa y el emprendimiento Chileno en el próximo año. Quiero terminar con otro agradacimiento a mis amigos emprendedores, startup chile y cada persona que apoya el programa. Gracias.

 

Juan Pablo Salas, Sebastián Piñera, George Cadena, Nathan Lustig

Gracias a Juan Pablo y Javiera para leer y corregir unos versiones de mi discurso y a Jean y Brenna para la oportunidad!

In English:

What I said to the President

Last Thursday, I had the opportunity to share my experiences of the last six months in Chile as part of the Startup Chile program at a breakfast with Geeks on a Plane, Startup Chile y the President of Chile, Sebastián Piñera.

When I arrived to Chile, I only spoke a little Spanish and I never thought in my wildest dreams that I’d have the opportunity to give a talk at a breakfast with the president, an audience of over 100 and the press.  This is what I said the President Piñera and the rest of the audience.

Hi, my name is Nathan Lustig and I am the cofounder of Entrustet, the seventh company that arrived in Santiago for Startup Chile.  I want to thank President Piñera for inviting us to this breakfast and for the opportunity to talk a little about Startup Chile.

In September, I saw an article in Techcrunch about the oporuntity to move my company to chile for six months.  I filled out the website and four weeks later, they picked us for the program.  When I arrived, I didn’t know much about the program, only that I would be able to work on my company in another location and have a grant.  The opportunity to avoid a Wisconsin winter was only an added bonus.

Now, six months later, my time in Chile is coming to an end.  I can say that these six months were some of the best months of my life.  We made a lot of progress on Entrustet, but more than that, we made good friends with all of the entrepreneurs in the proigram.  We were connected into the Chilean entrepreneurship network and we made friends with Chileans inside and outside of the program.

Now, I want to talk a little about the program.  Like Jean said, Startup Chile is a startup in it’s own right and it’s growing really fast.  100 team are going to arrive in the next two months.   I want to thank all of the people in the government because without your permission, this innovative program never would have been successful.  I want to say thanks to all of the people who work in startup chile.

This program is very special.  I believe that many people, especially Chileans, don’t understand this.  When I talk to my friends about the program, they say to me “If Chile can do it, other countries can.”  But in reality, it’s not the case.  This type of program would never had happened in the US or Europe.  The program is the most innovative government program I’ve seen in my life and every Chilean should be proud.

You’ve done something amazing and it’s the start of something incredible.  I want to see how the program and Chilean entrepreneurship growns in the next year.  I want to end by thanking my startup friends, Startup Chile and every person who supported the program.  Thank you.