Tag: Entrepreneurship

Punishing Failure, Stifling Innovation: How Culture Affects Who Goes into Entrepreneurship

I wrote a post last week about some of challenges facing Chilean would-be entrepreneurs because of the culture.  Overall, Chilean culture punishes failure, which stifles innovation.

It got me thinking and I realized that it seems to me that a fixed percentage of people in the world are entrepreneurial.  I’m not sure what the exact number is but if I had to guess, it’s probably around 10% and I’d be willing to bet that percentage is fairly static across the world.  I believe that these 10% have the skills, desire and entrepreneurial spirit to start a business and succeed.  10% of Americans, Saudis, Chileans, Spaniards and South Africans all have the desire to start businesses, so why do some places have lots of entrepreneurship and others don’t?

Why does the US have a higher percentage of entrepreneurs than Chile, Saudi Arabia or other places around the world.  And in the US why do Silicon Valley, NYC, Austin, Boulder and Boston have a higher percentage of entrepreneurs compared to Des Moines, Tallahassee and Phoenix?

I believe that certain cultural values free up the entrepreneurial 10% to actually start businesses and succeed.  For example, in the United States, we reward risk taking, business ownership and making money.  On average, we also love innovation, learning and trying new things.  We love rags to riches stories, even if they are only partly true.  If someone’s business fails, it’s seen as experience, not a black mark.  In the US, these values are stronger in San Francisco and Austin than in Cleveland and Memphis.

In other parts of the world, there are many different cultural pressures that stifle innovation: punishing failure, punishing innovation, closed culture.  Some places even look down on successful people.

In Silicon Valley, I bet 20% of the people are entrepreneurs in some way shape or form.  In Austin, maybe 8%.  In Chile it’s .01%.  I believe that all cultures start out with the same 10% who can start businesses, but some cultures push people who may not have started businesses to do it, while others push people who would have otherwise started a business to shy away.  The most important thing entrepreneurs, government and academics can do is to try to free the people who would start a business, but don’t because of cultural pressures.

I’ve seen it first hand in Madison.  When I was 19 and just starting with ExchangeHut, there were not many young entrepreneurs.  I only knew 4-5 students and recent grads who were starting businesses.  After JellyFish sold to Microsoft, Networked Insights started to have some success and young entrepreneurs like those in the Burrill Business Plan Competition started to get press in national publications and have some success, other people started to see that they too could start a business.  Capital Entrepreneurs has accelerated the process, along with all sorts of cool initiatives from the startup community like barcamp, forward tech festival, high tech happy hour and more.  I think Madison went from a 1% to a 3% city in the last five years.  We still have a long way to go, but by unlocking the pent up entrepreneurial talent, we’ve seen an explosion in entrepreneurship.  Just wait until we see what Madison looks like at 5%!

In Chile, I’d estimate that we’re at .1%: for every 1000 people who are entrepreneurs at heart, only 1 starts a business.  That’s 1/1000!  In Silicon Valley, it’s probably 200/1000, Austin 80/1000 and so on.

Part of Start-Up Chile‘s mission is to introduce entrepreneurs from all over the world into Chile’s culture to try to break the cultural pressures that punish failure and stifle innovation.  I believe that we should be focusing on the other 9.9% of Chileans who might start a business if they were not afraid of being punished for their failure.  If we can double the amount of entrepreneurs who start businesses, it will be a huge win for Chile.  I see similar parallels to Madison and the entrepreneurial community is starting to take shape.  People just need the entrepreneurial push!

What do you think?  Are entrepreneurs distributed equally across the world or are more entrepreneurs born in one country compared to another?  What can you do to help free up the rest of the entrepreneurs who are scared to make the leap?

How to Make an Introduction

I get asked to connect people all the time.  I also ask others to connect me to people every single day.  Getting introductions is an incredibly powerful way to get to know people who can help you with your business or in your personal life.  It’s also great to be able to give an introduction to two people who will mutually benefit from knowing each other.  Email introductions are the most common intros these days, so it’s important to know how to both introduce two people and respond to introductions.

Introducing Two People

I like to keep it really simple.  Here’s a mock introduction between my business partner Jesse Davis and our friend/Madison entrepreneur Steve Faulkner of Real Time Txts.

To: Jesse Davis, Steve Faulkner

From: Nathan Lustig

Subject: Introducing You

Jesse, meet Steve Faulkner.  Steve is, among other entrepreneurial endeavors, the founder of Real Time Txts, a service that texts subscribers free drink offers at local bars in real time.  He also wrote an awesome article about Madison entrepreneurship that was featured in Techcrunch.

Steve, meet Jesse Davis.  Jesse is the cofounder of Entrustet, a website that allows you to decide if you’d like your digital assets transferred to heirs or deleted when you die.  He is also active in the Madison startup scene and Capital Entrepreneurs and writes a great entrepreneurship blog.  Jesse is interested in connecting with you to see if there is a potential partnership for Real Time Txts and Entrustet.

I wanted to connect you guys so you could figure out how to make it happen.  I’ll let you take it from here.

Thanks,
Nathan

Key Points to Remember

  1. Use the format above to introduce both people to each other
  2. Include links to each person’s business, unless the person is well known
  3. Include a sentence at the end to say why you’re connecting both people to each other
  4. Include a sentence that tells the two people you’ve just introduced that it’s up to them to take it farther

Responding to an Introduction

It’s fairly straight forward.  Click reply all and thank the introducer for making the intro.  Introduce yourself to the other person and go from there.  It’s important to include the introducer in the first reply so that they know that you’ve actually responded.  If I’ve taken the time to introduce two people, I want to know that they’ve actually taken the next step to connect.  After the first email, feel free to leave the introducer off further conversations.  Here’s a sample reply:

To: Jesse Davis, Nathan Lustig

From: Steve Faulkner

Nathan, Thanks for intro.

Jesse, many people have told me that we should meet as well.  As Nate said, I’m the founder of Real Time Txts, a service that sends people texts about free drinks at Madison area bars.  Do you have some time this week to chat via phone or meet up for coffee so we can discuss a potential partnership?

Thanks,

Steve

I hope this helps!  What do you think?  Do you use this format or do you have a different format that works well for you?

Forward Technology Conference 2010

On the flight back from Austin after SXSW last March, I was taking with Jesse about how much fun it would be to have something like it in Madison.  We thought it would be cool to try to set something up for the summer.  When I got back, I pitched the idea to my friend Matt Younkle, who really liked the idea.  In May, over some beers, we decided to try to make a go of it.  As the summer rolled along, Matt, Bryan Chan and I continued to plan Madison’s tech conference.

The Forward Technology Conference took place at the Memorial Union on the UW campus on Friday and was a huge success.  Over 120 Madison entrepreneurs, techies, investors and other tech savvy Madisonians attended the inaugural FTC2010 to hear from some of the most interesting people in the Madison technology scene.

FTC2010 was only a small part of the 10 day long Forward Technology Festival, which was sort of a “taste of Madison” but for all of the tech and entrepreneur focused groups in town.  The Forward Technology Festival was the brainchild of Preston Austin, who had the foresight to try to bring all of the different tech groups in town together in a week long celebration.  FTF2010 included High Tech Happy Hour, Capital Entrepreneurs, Sector67, BarCamp and other tech focused events.

FTC Highlights

The Forward Technology Conference kicked off with a panel called Entrepreneur 101, which featured four successful Madison entrepreneurs: Greg Tracy (Sharendipity), Dan Voell (GoBuzz), Chad Sorenson (Flamedisk) and Roy Elkins (Broadjam) and was moderated by Bryan Chan (Supranet).  The panelists talked about their successes and lessons they’ve learned over their careers in the startup game.  All of the entrepreneurs talked about staying focused as one of they keys to their success.

Next up was All About LLCs featuring attorney Joseph Boucher of Neider and Boucher and Kevin Kelbel an accountant from Smith & Gesteland LLP moderated by Matt Younkle (Y-Innovation).  Boucher and Kelbel talked about the different types of business entities and shared stories about why different companies should choose LLCs, S or C corps.

After a quick lunch break, we did an hour of breakout sessions with topics proposed from the attendees.  We ended up with a wide range of topics and settled on four.  First was how to run an intern program led by Jesse Davis of Entrustet.  The second group was about what a shared hackerspace in Madison should look like, led by Chris Meyer of Sector67.  Another session was about biomimicry, with the last session focusing on the future of the web and HTML5 (hosted by Momenta’s Dan Gordon).

The final panel of the day was all about design, branding and identity.  It featured John Besmer (Planet Propaganda), Wesley Grubbs (Pitch Interactive), Andy Wallman (Knupp & Watson & Wallman), Gage Mitchell (Gage Mitchell Design) and was moderated by Dan Merfeld, (TheoryThree Interactive).  This was one of the more fun panels of the day and featured spirited discussion on the pros and cons of large and small design shops.  The panelists stressed that brands need consistent messaging across all platforms or their marketing won’t work.  My favorite quote of the day came from Besmer “If you’re thinking about your marketing when its time to do marketing, its way too late.”

We rolled on into my favorite part of the day: Pitch Your Biz.  5 startups had 5 minutes each to present their ideas to the crowd and then the crowd had 5 minutes to provide feedback, ideas and ways to improve the business.  Biz Pitchers included Heidi Allstop (Student Spill), Derek Swoboda (Golf Links Cafe), Joseph Beck (Loacsys), Justin Beck (PerBlue) and Mudit Tyagi (Open ADC).

I love this format because it keeps the participants and the audience on their toes.  The audience can’t fall asleep, since the pitches come fast and furious and there’s a new one every five minutes.  All of the startups did a great job, as did the audience.  My personal favorites were Student Spill, which I think has the potential to be a game changer by bringing support groups online, but with a tweak and PerBlue.  Justin Beck from PerBlue is always an entertaining speaker because he is right to the point, provides compelling stats and doesn’t mince words.  All five startups did a great job and Laurie Benson (Innacom) was a phenomenal MC.

Fred Foster of Electronic Theater Controls was the keynote speaker and told the story of how he founded ETC while he was still in school at UW.  He told war story after war story about his battles growing the company into what it is today: $200m in revenue and 700+ employees.  Foster had the audience laughing every few minutes and I could have listened to him tell stories for as long as he wanted to talk.  I thought it was awesome that when he started the company, he wanted to sell theater controls to The Met and 20 years later, he actually did it.  Talk about perseverance!

After the keynote, we put on a reception above the union terrace, right on the lake.  The weather was perfect and I enjoyed talking with all of the attendees and learning about their current projects.

I really enjoyed FTC2010 and am hoping to make it an annual event.  I know that with a full year to prepare, we can do an even better job and get more people in town to attend.  Madison is turning into a startup hub in the Midwest.  TechCrunch noticedForbes noticed and the local media is starting to take note.  The Forward Tech Conference is another step in the right direction and one that I hope continues to put Madison on the map!

Did you attend FTC2010?  What was your favorite part of the festival? Do you have any suggestions or feedback?

Why I Won’t (might not) Vote For Russ Feingold in November

Update 1: May 2010: Shortly after I wrote this post, I got a follow up email from a member of Sen. Feingold’s staff with the correct email response.  The next day, I got a phone call from a different member of the staff apologizing and asking if they could do anything else to help me and yesterday, I received an snail mail copy of the email response with Sen. Feingold’s signature.  This morning, I got an update from one of his staffers about new changes to the Banking Bill that seem to help change the original problems.  While it did take a negative blog post to get the correct response, I am impressed that Feingold’s staff has been this diligent about my blog post.  I changed the title to add “(might not)” because I don’t think it’s fair that when people Google “vote Russ Feingold” my post comes up 5th.

Update 2: October 2016: After six years of Sen. Ron Johnson and Russ Feingold’s seeming rejuvenation, I’m supporting Russ for Senate in 2016. We need a Senator who will bring a different perspective than the vast majority of senators and isn’t afraid to stand up for things he believes in. We need the only Senator to vote against the Patriot Act back in government.

A few weeks ago, I wrote about how the new banking bill would screw up angel investing in the US.  The bill plans to raise accredited investor levels by over 2x and institutes new regulation on angel investment.  It treats angels like hedge funds, which is wrong.  In the comments, someone asked how we could fight the bill.  I answered that I didn’t really know, but would email both of my Senators, Russ Feingold and Herb Kohl.

I sent them both a shortened version of my blog post with a little background about me through their official Washington senate emails.  I have yet to hear back from Senator Kohl, which is what I expected.  Aside from making sure that the Milwaukee Bucks stay in Milwaukee and donating $25m to get his name on the Kohl Center, Kohl really hasn’t done anything for as long as I can remember.

I figured that I would get a response from Senator Feingold, since generally more involved and he’s up for re-election in November and some are predicting it will be a close race.  He (or more likely someone from his staff) emailed me back today, 3 full weeks later, which isn’t too bad.  I assume he gets hundreds, if not thousands of emails every day.

So here’s why I won’t vote for Feingold in November.  I wrote to him about the angel investment changes in the tax bill, but here’s what I got back (emphasis added):

Dear Mr. Lustig,

Thank you for contacting me regarding your support for having private student loans be regulated by a consumer financial protection agency. I appreciate hearing from you, and strongly agree with you.  In fact, I am a cosponsor of an amendment to the financial regulatory bill which would extend consumer financial protection agency regulations to student loans.

Access to high quality public education should be available to all children, and access to higher education should be based on a student’s desire to gain knowledge and skills, not financial resources. As I travel throughout Wisconsin, I hear from many individuals who cannot attend college or other post secondary training programs without financial aid. I also hear from students who are extremely concerned about their growing debt as they try to finance their education. I support efforts to make education beyond high school available and affordable to qualified individuals who wish to pursue it.

Thank you again for contacting me. For more information about my work on behalf of Wisconsin, you can subscribe to my monthly e-newsletter by visiting http://feingold.senate.gov/newsletter.cfm. I look forward to hearing from you in the future.

Feingold (or his staff) couldn’t be bothered to actually respond to my email.  I took the time to write him an email, the least he could do is make sure he wrote me back about the issue I wrote about!  I understand it is most likely a mistake, but it’s a mistake that shouldn’t happen.  It shows that he (or his staff) don’t really care about the people who write him emails.  I know I’m not the only person who’s had a similar experience, as I’ve talked to two other people who have written to Feingold and never gotten any response.  To be honest, I’d have rather not gotten any response than the one above.