Tag: startups

The Investment and Startup Community in Peru

Many travelers visit Peru to experience Machu Picchu, and though incredible, there is much more to this country than its wonder of the world. Known for its gastronomic sector, Peru has some of the most diverse (and delicious) food in the world. Through its long history of eating seafood, mixed with Spanish, Japanese and Chinese immigration, it’s always a pleasure to go to Peru, even if it’s only to eat, and entrepreneurial Peruvians have taken advantage.

Peru has diverse terrain, from the steeply sloping Andes and dense jungles to the cerulean coastline. About one-third of Peruvian residents live near or close to the ocean. The population is just shy of 32 million, surpassing Chile but falling below Colombia. Monthly wages are on the upswing at 1680.67 Peruvian Sol (roughly US$519), with a minimum wage of 850 Peruvian Sol.

The capital city, Lima, is experiencing rapid growth and the government is allocating investment towards more infrastructure and improving public transportation. Foreign investors are paying close attention to the new Cuzco airport which offers easier access to Machu Picchu, though has caught some local scrutiny. Peru offers multiple visas for foreigners interested in the business sector, but these visas can come with an unwanted amount of red tape. (more…)

The Biggest Problem Starting Up Outside San Francisco or NYC

Quick, what’s the biggest challenge facing entrepreneurs starting their businesses outside of San Francisco and NYC?

Most entrepreneurs outside of these cities will say “MONEY! We need investors!” That’s a huge cop out. I don’t care where you’re living, if you have a good idea with traction, you’ll get funding. I’ve been in NYC all week and am more convinced than ever that the biggest challenge of being outside of NYC or San Francisco is the lack of good feedback. People to challenge your idea and call bullshit on what you’re doing to eventually make you better.

I’ve started companies in Madison, WI and Santiago, Chile, two aspiring startup hubs that have experienced massive growth in their entrepreneurial ecosystems. They’re both on their way toward building themselves into the next Boulder or Austin. But in both places smart, experienced entrepreneurs, investors and attorneys cheered us on. “Great idea!” they’d say with enthusiasm. “We’ll use your product!” They loved it! We were going to be huge!

A few months after we launched Entrustet, we headed to NYC, SF and Chicago to see what other people thought.  My first meeting in San Francisco was with Marcus Nelson. I remember this meeting as if it were yesterday. We sat down to chat and within 5 minutes it was clear things were different. We were going to have to up our game if we wanted to play at that level. I stammered through lunch and probably came off like the novice I was. When I left, I went across to a coffee shop in Embarcadero and quickly wrote out the questions he’d asked that I hadn’t been able to answer and sent them off to my cofounder.

We chatted that night, got the answers together and used his questions to hone our idea. Our meetings got better, but the same general pattern persisted our entire trip. We got probing questions and demands for real data. We improved each day. By the time we got back home, we’d gotten more feedback in two weeks of travel than in a year in Madison. I had the exact same experience when I moved to Chile as part of the Startup Chile program. Lots of cheerleaders, not many probing questions.

So what’s the difference? First, there’s clearly more savvy people with entrepreneurial experience in NYC and San Francisco than in aspiring startup hubs like Madison or Santiago. But what about the otherwise savvy entrepreneurs and investors who are in aspiring startup hubs? Why do many of them turn into cheerleaders rather than give good feedback? Why don’t they ask hard, probing questions or call bullshit on ideas that have been done hundreds of times?

I think it’s because they are trying to foster entrepreneurship in their city. They’re worried that if they’re overly critical of a startup, the founder will get discouraged and the aspiring startup hub will lose an entrepreneur. Or they’re worried about coming off as an asshole. Non startup hubs don’t have the culture of brutal, honest feedback that entrepreneurs need to really create great companies.

I’ve seen smart people in both cities “entrepreneurially grin fuck” aspiring entrepreneurs: they listen to a pitch, smile, say great idea and don’t offer constructive feedback. I was pitched the exact same mobile travel app by four different teams within a 2 month period in both Santiago and Madison. In both places, smart entrepreneurs I respect smiled and said good job and told them to keep going. Instead of doing the heavy lifting of forcing the entrepreneur to answer tough questions, they smiled and encouraged them.

That’s doing these entrepreneurs and their cities such a disservice. By not exposing entrepreneurs to criticism and blunt feedback, they’re just condemning these entrepreneurs to fail and fail more slowly. By not challenging entrepreneurs, asking tough questions and risking coming off as an asshole, you’re actually hurting your city and its entrepreneurs. You’re not fostering entrepreneurship in your city by telling everyone that their idea is good. I wish I’d gotten Marcus and others’ feedback in month 2 of our business, not month 9.

Now this doesn’t mean you should tell every entrepreneur in a non startup hub that their idea sucks or that they shouldn’t be working on it. That’s just being an asshole and doesn’t help. If you really want to help an aspiring entrepreneur, don’t sit on your Mount Olympus of knowledge, smile and tell them it’s a good idea, keep going. Challenge them with some variation of the following questions:

  1. Who is your competition and how are you different/better?
  2. How will you get users?
  3. Have you talked to potential customers to validate that they actually want your product?
  4. How will you make money?

Make them think. Make them defend their idea. Make them be specific. And encourage them to come back with the answers. Anything less is just hurting entrepreneurs, not to mention your city. Help create that direct feedback culture in your city. That’s the biggest thing missing from aspiring startup hubs. And if you’re an entrepreneur living outside of San Francisco and NYC? Buy a plane ticket and head to the coasts a few times a year. You can take advantage of the pluses about starting up outside of SF and NYC, like easier access to talent, lower cost of living etc, while still getting the feedback you need to be successful.

What do you think? Do you see this same phenomenon in your non-startup hub? Do you agree? How can we change it?

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?

Capital Entrepreneurs: How To Start A Founders Meet Up Group In Your City

I’ve been involved in the startup community in Madison for about 6 years now, but had a hard time fitting into the networking scene, especially as a college student who was also running a business.  Most of the entrepreneurship and networking events in Madison were either overrun by service providers trying to sell you something, cost too much for what they provided or were at bad times or locations.  The signal vs. noise ratio at most of these events was pretty poor.  At some of the other events, I’d be the youngest person by 3o years.

There really wasn’t a good, free, entrepreneurship organization that was limited to founders.  To fill the gap, I founded Capital Entrepreneurs, an invite only meet up for founders of startups.  We meet up once per month at a bar in Madison, grab drinks and talk about our businesses, ideas and how we’re moving forward.

Here’s some Capital Entrepreneurs stats from the last year:

Best of all, it’s been something that we all look forward to each month.  It’s lonely starting a startup.  In the early stages, you might only see one other person (your cofounder) each day for months at a time.  Founders groups like CE help create a scene and allow you to commiserate with others in your situation.  You also get “coworkers” and if you’re lucky like we are in Madison, most of the startups will be located close together to facilitate lunches and happy hours.

The awesome thing is that it’s been really easy to get Capital Entrepreneurs started and it’s been incredibly successful, moreseo than I ever envisioned back in May 2009.  If your city doesn’t have a good founders group, I’m here to give you the steps to take to replicate the success that we’ve had with Capital Entrepreneurs.

Your startup group should have the following characteristics:

  1. Exclusive to Founders – No attorneys, accountants, people searching for jobs, consultants etc.  These are all nice people, but do not belong in an entrepreneurship group.
  2. Private Email List – People like to keep their emails private.  Use BCC to send out invites
  3. Open to new members – You’ll never grow if you exclude startups
  4. Free – Do not charge admission
  5. Website – Create a website and post updates
  6. 1-2 people should control it – If there’s more, it gets too complex
  7. Sponsors – After you’ve been going for awhile, you’ll find that attorneys, accountants and others will want to be invited.  We started offering sponsorships where service providers can attend one meeting per year as long as they do not try to sell their services.

Step 1

Survey the existing startup groups in your city and try them all out.  There are 6-7 entrepreneur and young professional groups here in Madison.  All are valuable, but none provided exactly what we wanted to do with Capital Entrepreneurs

Step 2

Reach out to your network.  I emailed all of the founders that I had gotten to know, about 15 of them, and asked if they were interested in a meet up specifically for founders.  I got a good response and moved forward.

Step 3

Set up a wordpress site.  I bought the Capital Entrepreneurs domain name and installed wordpress.  I created a members page that includes everyone’s logos and a 2 sentence description of their business.  The home page is a feed of press that our member companies gets and we have a contact form so that new businesses, press and other can get in contact with us.  We later added a resources page that lists some service provider sponsors to advertise to our members, along with a list of helpful articles and resources that came from Entrepreneur 101.

Step 4

Find a location.  We’ve been fortunate that we’ve had a regular meeting location.  The great guys at Brocach let us have a private room upstairs, give us free appetizers and run us a tab for drinks.  I called 5-6 bars in town to find the one with the best deal and you can too.  Try to find a place that will not charge you fees.

Step 5

Pick dates and time that people will be able to come to.  We’ve picked Wednesdays or Thursdays from 7-9pm, as we are a somewhat younger crowd and most of the people walk to the events.  Pick a time that works for your members and your city.

Step 6

Send invitation.  Shoot emails to all of the people who’ve expressed interest and tell them that they should forward the email on to any other startup founders.  Make sure that everyone understands that it is for founders, not service providers like attorneys, accountants or for people searching for jobs.

Step 7

At the first meeting, make sure to introduce everyone so that everyone is comfortable.  Explain that this will be a monthly event and that it is for founders.  Keep it casual and then schedule the next monthly meeting at the end of the event.

Overall

Overall, you want to create a place where founders can come to meet up, exchange ideas, get to know each other, without the burden of talking with service providers are those handing out resumes.  Once you get a group together, make sure to keep emails private and set up a twitter handle and website where you can post updates about group members.

If you follow these steps, you’ll likely be able to replicate what we’ve done in Madison.  I think cities of just about any size can benefit from founders groups.  Even if the groups are small, they can be fun, easy ways to connect with your fellow entrepreneurs.  If you’d like help starting a founders group in your city, please feel free to contact me.

Are there good startup groups in your city?  Have you started one?  Would you go to one if there was one in your city?