Liz Elam of Link Coworking Talks about Her CoWorking Space
Where are you from originally?
I graduated from Westwood High School right here in Austin, Texas. My childhood was spent in Virginia and Vermont, where my Dad was an IBM Executive.
What university did you go to?
I have a Bachelors of Science from Texas A&M. I majored in journalism and minored in marketing.
What brought you to Austin?
I moved back to Austin from Italy in 2008 to open a coworking business here in Austin.
What is your group’s mission?
Link Coworking’s mission is to build a community that brings people together who share the need for a place to conduct their business in an interactive space.
What need does it fulfill?
We have a huge workforce that is conducting business from their homes or coffee shops and they desperately need a professional space.
What exactly does it bring to startups?
Link brings a supportive community for collaborate and support for a startup buisness.
What type of startup would benefit from your group?
Anyone who needs a professional space to conduct their business, wants to work amongst other knowledge workers and/or hold a meeting could benefit from Link Coworking.
What was the most challenging aspect of starting up the initiative?
Finding the right physical space for the business was a real challenge. I was looking for a space that was:
1. Less than a mile off of Mopac
2. Plenty of parking
3. First floor
4. Covered outdoor seating
5. Walking distance to retail spaces and restaurants
It took me about a year to find the ideal space, but once I found it, I knew in my gut it was right.
What advice do you have for entrepreneurs?
Follow your gut. Period. End of story.
What Austin-based resource have you found to be the most helpful and why?
SCORE was critical to my success. I was immediately paired with a counselor who came from a similar industry. She was with me step by step through my business plan, and we even looked at lots and lots of possible locations until we found the one we both agreed was it. She listened, encouraged and celebrated my success and patiently helped me through the entire process.
The other resource I must mention is the Austin Cosmopolitan Rotary Club. ACRC is the younger hip version of your father’s Rotary club. My fellow Rotarians encouraged me, supported me and even built furniture with me. It is a great place to network and build business relationships. I even found my web designer and insurance agent through Rotary.
Tuesday, December 14, 2010
Wednesday, December 1, 2010
Maggie Miller is the founder of discover hope fund, a non-profit organization providing micro loans and education to impoverished women in Peru. These loans can be as small as $150 but they enable women to feed their families, send their children to school, and improve the communities they live in. When an opportunity to travel to Peru came along in 2004 Maggie went knowing that she was looking for her next move, but not knowing what that would be. She found the answer, what would become discover hope fund, by simply asking the Peruvian women what they wanted for themselves and listening to their answers. Discover Hope funds holiday of hope benefit is taking place next Wednesday, December 8, at Mercury hall. You can get more details at Discover Hope .
I think that the work you’re doing with Discover Hope Fund is really pretty amazing stuff. Explain how the program works.
The mission statement has two program goals; one of those goals is microcredit for women who are living on less than $2 a day, and the other one is training which is access to knowledge and information for those women. So microcredit is not a new concept; I wish I would have invented it but I didn't. It's the idea of giving these small loans, or access to credit, to women (traditionally world wide) and ill talk about that in a second. To initiate or grow their small businesses. And worldwide 97% of the borrowers are women and the reason for that is women have the ultimate care for their children at the end of the day. They have the responsibility to feed them and clothe them and educate them. And women in developing world also wont traditionally have access to other means of credit. Their only access would traditionally be a loan shark that would charge them up to 50-70% a day at times. So that first goal is really giving access to credit. The loans do look like, as you said, $100$150 to initiate and grow a small business. To me that's like the fishing pole, that old saying that we all have heard many times that I love which is teach a person to fish instead of giving them a fish. So microcredit is the fishing pole, it’s a tool, it’s an amazing tool used world wide to help lift people out of the situation of poverty. But at Discover Hope we really feel that there is a part 2. And that's when you give a tool to somebody that they've never had in their hands before, that you have the ultimate responsibility to teach them to maximize the potential of that tool. If I gave you a fishing pole and you've never fished before, you've never seen this thing you would not know how to use it. So what we do is we ask the women in our microcredit program “what else do you want and need to maximize yourself as a women, as a mother as an entrepreneur”. And then the trick is to listen. To listen to what they want.
What do they want?
What they say they want has been things like literacy for themselves, health education for themselves and how to care for their families. Issues like respiratory illness and disease, gynecology, those types of issues.
But how do those types of education, how does that help them run their businesses?
So those are two of the top personal things they ask for, so still kind of going down the line of what they want. The other areas have more focus towards their business, which is business particular classes they ask for business and finance classes. Now remember literacy is also mathematical literacy. And if someone doesn't know how to compute a day’s work, that is about $5, $10, then they don't know if they've lost or gained at the end of the day. So business classes, finances classes, classes that has to do with their type of business in general, that looks like veterinary workshops on how to care for their animals, a lot of them work in agriculture and husbandry. Creating artisan works, jewelry, t-shirt stamping, weaving, crocheting. Whatever they ask for. Last year we did 72 types of artisan classes alone. So again, it’s really about listening to what they want. One last big area is culinary as well. We have a lot of women who do fresh food production on the streets. They want to learn how to add to their menu, or bake cakes for Quincineras, or whatever they need. So again the high level goals are microcredit, that access to credit, and training which is access to knowledge.
Is the training typical among other microloan organizations, because I mean, that's really an amazing piece?
I wouldn't say it’s typical. It does exist. There are some really great organizations; one of my favorites is Freedom From Hunger out of Davis California. They have a credit plus education model that I think they really well developed. There are other microcredit borrowing mechanisms that are really just about you paying into the loan or the loan money itself. At Discover Hope we kind of have the stance that that’s just really not enough. And I think some of that comes from the background of being in the field and watching microcredit in action for several years and working with different organizations and seeing that the biggest question is how paternalistic can you be about a microcredit loan. Do you give $100 and make sure they go to the store and buy the goods that they said they said they wanted to buy for their business. So I guess the trick is that if you give the credits, the education side to the credit, you've actually given them a path for how to best maximize that tool. When a woman leaves our classes and she’s learned to make a pair of earrings, and she sells it on the street for $2 ten minutes later she’s going to go buy more jewelry materials. When a woman bakes a cake in a culinary class and sells it to her neighbor for her daughter’s event, her quincinera, she’s going to go invest in more product.
Tell us about actually the loan payback rate. These are women who haven’t had access to money before and now they’re getting it.
Absolutely. Worldwide microcredit is very successful. The payback rate in the world is %97 98% success and these are entrepreneurs that don't have any collateral at all. Its not like you can go take their home from them or their car from them. Our payback rate at Discover Hope is 100% and were really proud of that. And what I think that that speaks to is the ownership and the accountability that people are willing to take on for themselves to make a sustainable change for their families. Its not just like hey give me some money and I’m going to take off with this money. Its I’m willing to pay back this money in 4-6 months which is a typical loan cycle. So they may take $150 $100 depending on the interview you've had with them and what they want to do with that money and their going to pay back over 4 to six months. Now the way that that works is in a mechanism called the village bank. It’s also known as community bank or community groups, communal banks. That is a group of 6-8 women or 6-25 women (it matters what origination your working with). Ours is 6-25 women that basically borrow together as a unit. So they have each other’s backs so to speak and this is called social collateral and this is used world wide in micro credit.
Right and another key thing, what you just said about here in the United States. Now they are trying microcredit models in the United States but one of the keys that makes it work internationally is communities are not mobile like they are in the United States. When your born in a community, unless you have kind of gotten a break, gotten an education and gotten out of our community, you’re going to remain in this community for your entire life. So, the trust, and what people think of you, and your home unit and your family unit is always in that community which makes that social collateral bond really strong. So that's another big point about it working internationally.
That is so interesting. Maggie I want to find out how you came to do this work. So you have a Bachelors degree from George Washington university, a master’s of communication from San Diego state, you graduated summa cum lade from both, and you had a full athletic scholarship for soccer. So how did you come to help poor women in Peru?
So the short answer is the still small voice, that's my short answer and I’ll tell you what that means. After my masters I started working in San Diego for an amazing non-profit and what I did there, the mission was stop children from killing children. And my job was to create peace education for kids that are from gang families. For anyone that can see me in this interview I definitely don't look like I have… You know I’m white, I have blue eyes, I grew up in the mid-west, and I didn't have trouble in my family. And so my job was how to relate to kids that were really having difficult times in their family. No matter how they looked it was just different experiences. And the thing I learned the most from these kids was ask them what they want. So they wrote this curriculum, which was eventually called Peace works, and it still exists to this day in the organization in San Diego. Shortly after that, one day in quietude of my home, I heard this internal call, and that call was go see con otros ojos.
And it was in Spanish?
It was half Spanish half English. Go see con otros ojos—go see with other eyes. And being in San Diego, which was a beautiful place to live, working for a wonderful origination, doing fine financially. I loved the beach, the people, the friendships. And hearing something that kind of shifted inside me and made me uncomfortable, lets just say I wasn't happy about it. So for the next three months, I just kept inquiring internally about that call. What does this really mean? What does this mean for me? And at the end of that kind of contemplation period, what it really meant for me was going outside the boundaries of the United States and seeing myself from another perspective. And so at that point I shared this with my coworkers and gave an 8 month notice, ended up giving away all my things I sold everything I had, gave most of it away, paid off my debts, had nothing at the end, and I mean I had my health and goodness so you know I didn't have nothing but I took off on March 4, 2004 to the mountains of Peru with about $7000 in investor money. It was an investment in the idea that I would create a project once I got there. And once I did get there, I spent about the first three months asking women, “what do you want.” and they all said the same thing they all said, “We want a hand up and not a hand out.” We don't want you to give us something that's going to go away tomorrow.
Were they happy to talk to you? I mean here you are you've described yourself; I mean blonde hair blue eyed white chick from America. Are they happy to talk to you?
Someone asked me that recently, and I think the trick is really being in their situation with them and taking interest in what they were doing and went to the places that were important to them. In the markets, in the fields…
Did you just walk up to them and say, “Hi”?
Well I think that the confidence came from them seeing that I wasn't going away. I wasn't a week visitor, I wasn't two days visiting, I wasn't a month visiting. After about 3 weeks they were like this chicks sticking around you know, lets see what she’s all about. I think it's a funny part of the story, but my real name is Madelyn. So obviously in a very catholic nation the name Madelyn is a very revered figure, Mary Madelyn. So it was kind of an open door as well. “Oh well what’s your name”, oh Magdalena “oh well wow, you must be an angel. What are you doing in town?” So it was almost a kind of a conversation starter. And just asking about their families. I just didn't immediately say what do you want. You now, what is your life like, tell me about your business tell me about your family and creating friendship and trust that way.
And so then, its one thing to hear theses stories, its thing to make that real.
Right. So at about 6 months into the project I wrote the investors and said look, what I would like to do is create a microcredit pilot project. I started studying along this time microcredit models, and what microcredit meant and how it worked and just kept in touch with these folks. And all of them said do it, go for it. So what I did was start doing the first generation of loans to women and really for the next year and a half I ran this pilot project called hope bank and hope bank was the predecessor to Discover Hope, the non-profit. Hope bank was really the experiment of how microcredit really works in the field, programmatically, what does it really look like. A lot of people hear of microcredit but how it unfolds in the field is another story. Brining the bank to the people, which is the point of microcredit, not making people come to a bank. Getting to a rural bank in the mountains of the Andes or wherever it is it's a whole operation in itself. People exchanging $20 and
50 cents.
50 cents?
Yeah well a payment sometimes can look like $1.50 or whatnot so it’s really an amazing process to watch. And I ended up stunning with FIMCA who is out of Washington DC. FIMCA is a very large non-profit and this non-profit brought me to Guatemala to study with them. And what I saw was the questions that I was seeing as a small guy, small organization, were the same with the large organization. They had the same kind of questions of how to do microcredit best. So after 2 years time of being there I knew I had to come back to the US and legitimize the structure as a non-profit. And I did that in 2006 and Discover Hope was born.
Maggie share with us some of the success stories that you've seen thanks to these microloans from Discover Hope Fund.
Okay with our interest with time I’m just going to share what my favorite success story is. We track the income the women make based on the trainings they take with us. So they’ve taken a cake training, therefore, they've started making cakes they didn't make before and they’re selling them now. you could use any product. So we track that total, we ask women to report those totals, and what that looks for us now, is nearly $10,000 plus in income for women.
You mean one woman is making $10,000?
No no 10,000 total dollars. So if you’re talking about, at this point, 175 women with active loan cycles right now. So when you’re talking about somebody that's making $2 a day, to me it's a great success to know that, on the income side, their lives are totally changing. Where one of our women, for example, made maybe $20 a month total, she’s making $20 a week right now.
She’s one of our women that came to our chocolate making class and created a chocolate business out of it. And she got really fancy about it. Like for the holidays, mothers day, fathers day, Christmas, she does coffee mugs. And through our computer class, she learned to do some electronic images on the coffee cups with messages that she got done at a local printing shop, and stuffed some with her homemade chocolates. So her business is a total success something she didn't do before.
So she has quadrupled her income! So how does that translate to her family in terms of what they could now do that they couldn't before?
Right. So, where money usually goes that you’ll traditionally see as microcredit starts boosting a family they'll do several things with it. The first thing they'll do with it is make sure that their kids get food. They'll start replacing things like instead of eating a piece of bread for breakfast and lunch, or bread for breakfast and lunch, they'll add in some protein there if they can. So it happens to work through how their kids are eating. The second area is school. It's a catholic nation where school is free, supposedly, but all kids have to go to school in a uniform and they have to get supplies and so those supplies and uniform may equate to $30 a year. And its sometimes just money that they cannot get together. They can’t get ahead that much. And so they'll put it right into that school pot right away along with the food. And the third thing is really house improvement. You’ll see, it's a poverty indicator; the first indicator of poverty is floor type. So a family with a dirt floor will often finish their floor into concrete. Or the adobe walls, they'll finish their walls with paint or concrete. So that home improvement is kind of another area you’ll see as well.
How do the husbands feel about the women being the one to provide these types of things for their families?
Right. So a lot of the women we work with are either widowed or single, or they have different fathers to their children. I think there are a lot of interesting dynamics that we don't have to talk about today, but with women being in a less powerful situation and not always choosing their mates, and when they want to mate with somebody and then having children, and having the responsibility of their children and then not always having a collaborative partner to raise those kids. So a lot of our women are in those situations. Now when they do have a family unit, and the husband or partner is involved, I think the most important thing that you can do is engage that male in a conversation. What we do is called the pre interview, before a woman ever gets money. That includes asking about her family situation, socioeconomic situation, the husband has to be involved in that interview.
So making sure it will be successful before you give the money?
Right. We do the interview with everybody to make sure what they really need and they've thought through what they really need. If they need $30 really for what they propose they don't need $100. The end goal is to do no harm. You want to help not harm. So if someone needs 30 don't give them 100. If their propensity to pay is for a $50 loan don't give them a $200 loan.
What if there was a husband that was hostile to the idea of this? Does that factor into whether or not they get the loan?
Yea. It would because you don't want to put a women into a dangerous situation without a doubt. We’ve had very little situations like this. So, you have the interview with this family. If the husband is drunk or violent or if there is an issue there we talk with the women further is this really the best thing for you to do. It seems like a dangerous situation. Sometimes they’ll get handy and they'll borrow through like a family member will take the loan under their name. The other way we really befriend the male side is we do a lot of work with community leaders and neighborhood leaders, and these leaders are all males in this culture. So when you have the trust of those leaders, information travels by what we call passé la vois (pass the voice). Its old school you know, its not texting messages like “Maggie’s a good person, meet with her.” Its people passing the information on that you’re a good person doing a good thing and you’re organization can be trusted. If that passa la vois happens and it’s positive for you, it’s usually a-ok. Now the last thing is that if you’re engaging a male in the discussion and it's a family business, and a lot of it happens in agriculture and husbandry, they’re raising animals as a family unit, they’re getting grains to sell in the market, or they’re making wood structures a lot of the stuff is happening in the family—they have a family store. And if you just have that conversation with the family it’s often seen that it could benefit the family business rather than be a detriment. It’s not a power struggle it’s meant to lift a family.
Maggie December 8 is your Holiday of Hope Benefit Gala. Tell us about it.
Okay so on December 8, this is our last event of the year. Holiday of Hope is in our third year. What it will look like is just an evening of fun. Well have some Latin jazz, some wonderful food and drink, and a silent and live auction with some wonderful things that the community has kind of contributed to our organization. And if anyone would like any more information about that they can go to our website which you said is www.discoverhopefund.org.
How much are you hoping to raise?
Our raise goal for that evening is $20,000.
What does $20,000 translate into in the way of loans?
So for us $20,000 would give us… We’d like to do at least 150 new loans next year, but were also taking care of the women that are still in our system. And so they’re in their second or third or fourth generation loans because you usually go 10 cycles with a women to get them some savings for their lives. So we have these 150 going and we want another 150 and then we want to do 375 trainings next year.
And you know longer term, maybe 3 years from now.
What are your goals for Discover Hope Fund?
So we have several high level goals. Longer term would be we have two sights waiting for us to come to them right now. One is in Peruvian Ecuadorian border, another area in Northern Andes that we have a local partner at that we need to raise the money ourselves to have these sites. So we want new sites. We’re also looking at Mexico for a site. And then another high-level goal is to package up the model of what we do a-z, how do you do the micro credit plus model anywhere in the world and to really make that an available published accessible piece for people.
So kind of like a franchise kind of thing. Like plug in and..
It won’t be us leading all those all over the world. It will be giving people the knowledge if they would like to assume that into their organization or build it themselves.
Is it a hot topic, meaning are there a lot of people looking to do this?
Oh I get probably 2-4 emails a month, hey I'm in this country, I'm working with this partner, how are you doing what you’re doing? So I think the question for us is how can we leave a legacy if were small and we’re roots and we cant go to all these places what is the legacy you can pass on and that's how you do it actually.
I think that the work you’re doing with Discover Hope Fund is really pretty amazing stuff. Explain how the program works.
The mission statement has two program goals; one of those goals is microcredit for women who are living on less than $2 a day, and the other one is training which is access to knowledge and information for those women. So microcredit is not a new concept; I wish I would have invented it but I didn't. It's the idea of giving these small loans, or access to credit, to women (traditionally world wide) and ill talk about that in a second. To initiate or grow their small businesses. And worldwide 97% of the borrowers are women and the reason for that is women have the ultimate care for their children at the end of the day. They have the responsibility to feed them and clothe them and educate them. And women in developing world also wont traditionally have access to other means of credit. Their only access would traditionally be a loan shark that would charge them up to 50-70% a day at times. So that first goal is really giving access to credit. The loans do look like, as you said, $100$150 to initiate and grow a small business. To me that's like the fishing pole, that old saying that we all have heard many times that I love which is teach a person to fish instead of giving them a fish. So microcredit is the fishing pole, it’s a tool, it’s an amazing tool used world wide to help lift people out of the situation of poverty. But at Discover Hope we really feel that there is a part 2. And that's when you give a tool to somebody that they've never had in their hands before, that you have the ultimate responsibility to teach them to maximize the potential of that tool. If I gave you a fishing pole and you've never fished before, you've never seen this thing you would not know how to use it. So what we do is we ask the women in our microcredit program “what else do you want and need to maximize yourself as a women, as a mother as an entrepreneur”. And then the trick is to listen. To listen to what they want.
What do they want?
What they say they want has been things like literacy for themselves, health education for themselves and how to care for their families. Issues like respiratory illness and disease, gynecology, those types of issues.
But how do those types of education, how does that help them run their businesses?
So those are two of the top personal things they ask for, so still kind of going down the line of what they want. The other areas have more focus towards their business, which is business particular classes they ask for business and finance classes. Now remember literacy is also mathematical literacy. And if someone doesn't know how to compute a day’s work, that is about $5, $10, then they don't know if they've lost or gained at the end of the day. So business classes, finances classes, classes that has to do with their type of business in general, that looks like veterinary workshops on how to care for their animals, a lot of them work in agriculture and husbandry. Creating artisan works, jewelry, t-shirt stamping, weaving, crocheting. Whatever they ask for. Last year we did 72 types of artisan classes alone. So again, it’s really about listening to what they want. One last big area is culinary as well. We have a lot of women who do fresh food production on the streets. They want to learn how to add to their menu, or bake cakes for Quincineras, or whatever they need. So again the high level goals are microcredit, that access to credit, and training which is access to knowledge.
Is the training typical among other microloan organizations, because I mean, that's really an amazing piece?
I wouldn't say it’s typical. It does exist. There are some really great organizations; one of my favorites is Freedom From Hunger out of Davis California. They have a credit plus education model that I think they really well developed. There are other microcredit borrowing mechanisms that are really just about you paying into the loan or the loan money itself. At Discover Hope we kind of have the stance that that’s just really not enough. And I think some of that comes from the background of being in the field and watching microcredit in action for several years and working with different organizations and seeing that the biggest question is how paternalistic can you be about a microcredit loan. Do you give $100 and make sure they go to the store and buy the goods that they said they said they wanted to buy for their business. So I guess the trick is that if you give the credits, the education side to the credit, you've actually given them a path for how to best maximize that tool. When a woman leaves our classes and she’s learned to make a pair of earrings, and she sells it on the street for $2 ten minutes later she’s going to go buy more jewelry materials. When a woman bakes a cake in a culinary class and sells it to her neighbor for her daughter’s event, her quincinera, she’s going to go invest in more product.
Tell us about actually the loan payback rate. These are women who haven’t had access to money before and now they’re getting it.
Absolutely. Worldwide microcredit is very successful. The payback rate in the world is %97 98% success and these are entrepreneurs that don't have any collateral at all. Its not like you can go take their home from them or their car from them. Our payback rate at Discover Hope is 100% and were really proud of that. And what I think that that speaks to is the ownership and the accountability that people are willing to take on for themselves to make a sustainable change for their families. Its not just like hey give me some money and I’m going to take off with this money. Its I’m willing to pay back this money in 4-6 months which is a typical loan cycle. So they may take $150 $100 depending on the interview you've had with them and what they want to do with that money and their going to pay back over 4 to six months. Now the way that that works is in a mechanism called the village bank. It’s also known as community bank or community groups, communal banks. That is a group of 6-8 women or 6-25 women (it matters what origination your working with). Ours is 6-25 women that basically borrow together as a unit. So they have each other’s backs so to speak and this is called social collateral and this is used world wide in micro credit.
Right and another key thing, what you just said about here in the United States. Now they are trying microcredit models in the United States but one of the keys that makes it work internationally is communities are not mobile like they are in the United States. When your born in a community, unless you have kind of gotten a break, gotten an education and gotten out of our community, you’re going to remain in this community for your entire life. So, the trust, and what people think of you, and your home unit and your family unit is always in that community which makes that social collateral bond really strong. So that's another big point about it working internationally.
That is so interesting. Maggie I want to find out how you came to do this work. So you have a Bachelors degree from George Washington university, a master’s of communication from San Diego state, you graduated summa cum lade from both, and you had a full athletic scholarship for soccer. So how did you come to help poor women in Peru?
So the short answer is the still small voice, that's my short answer and I’ll tell you what that means. After my masters I started working in San Diego for an amazing non-profit and what I did there, the mission was stop children from killing children. And my job was to create peace education for kids that are from gang families. For anyone that can see me in this interview I definitely don't look like I have… You know I’m white, I have blue eyes, I grew up in the mid-west, and I didn't have trouble in my family. And so my job was how to relate to kids that were really having difficult times in their family. No matter how they looked it was just different experiences. And the thing I learned the most from these kids was ask them what they want. So they wrote this curriculum, which was eventually called Peace works, and it still exists to this day in the organization in San Diego. Shortly after that, one day in quietude of my home, I heard this internal call, and that call was go see con otros ojos.
And it was in Spanish?
It was half Spanish half English. Go see con otros ojos—go see with other eyes. And being in San Diego, which was a beautiful place to live, working for a wonderful origination, doing fine financially. I loved the beach, the people, the friendships. And hearing something that kind of shifted inside me and made me uncomfortable, lets just say I wasn't happy about it. So for the next three months, I just kept inquiring internally about that call. What does this really mean? What does this mean for me? And at the end of that kind of contemplation period, what it really meant for me was going outside the boundaries of the United States and seeing myself from another perspective. And so at that point I shared this with my coworkers and gave an 8 month notice, ended up giving away all my things I sold everything I had, gave most of it away, paid off my debts, had nothing at the end, and I mean I had my health and goodness so you know I didn't have nothing but I took off on March 4, 2004 to the mountains of Peru with about $7000 in investor money. It was an investment in the idea that I would create a project once I got there. And once I did get there, I spent about the first three months asking women, “what do you want.” and they all said the same thing they all said, “We want a hand up and not a hand out.” We don't want you to give us something that's going to go away tomorrow.
Were they happy to talk to you? I mean here you are you've described yourself; I mean blonde hair blue eyed white chick from America. Are they happy to talk to you?
Someone asked me that recently, and I think the trick is really being in their situation with them and taking interest in what they were doing and went to the places that were important to them. In the markets, in the fields…
Did you just walk up to them and say, “Hi”?
Well I think that the confidence came from them seeing that I wasn't going away. I wasn't a week visitor, I wasn't two days visiting, I wasn't a month visiting. After about 3 weeks they were like this chicks sticking around you know, lets see what she’s all about. I think it's a funny part of the story, but my real name is Madelyn. So obviously in a very catholic nation the name Madelyn is a very revered figure, Mary Madelyn. So it was kind of an open door as well. “Oh well what’s your name”, oh Magdalena “oh well wow, you must be an angel. What are you doing in town?” So it was almost a kind of a conversation starter. And just asking about their families. I just didn't immediately say what do you want. You now, what is your life like, tell me about your business tell me about your family and creating friendship and trust that way.
And so then, its one thing to hear theses stories, its thing to make that real.
Right. So at about 6 months into the project I wrote the investors and said look, what I would like to do is create a microcredit pilot project. I started studying along this time microcredit models, and what microcredit meant and how it worked and just kept in touch with these folks. And all of them said do it, go for it. So what I did was start doing the first generation of loans to women and really for the next year and a half I ran this pilot project called hope bank and hope bank was the predecessor to Discover Hope, the non-profit. Hope bank was really the experiment of how microcredit really works in the field, programmatically, what does it really look like. A lot of people hear of microcredit but how it unfolds in the field is another story. Brining the bank to the people, which is the point of microcredit, not making people come to a bank. Getting to a rural bank in the mountains of the Andes or wherever it is it's a whole operation in itself. People exchanging $20 and
50 cents.
50 cents?
Yeah well a payment sometimes can look like $1.50 or whatnot so it’s really an amazing process to watch. And I ended up stunning with FIMCA who is out of Washington DC. FIMCA is a very large non-profit and this non-profit brought me to Guatemala to study with them. And what I saw was the questions that I was seeing as a small guy, small organization, were the same with the large organization. They had the same kind of questions of how to do microcredit best. So after 2 years time of being there I knew I had to come back to the US and legitimize the structure as a non-profit. And I did that in 2006 and Discover Hope was born.
Maggie share with us some of the success stories that you've seen thanks to these microloans from Discover Hope Fund.
Okay with our interest with time I’m just going to share what my favorite success story is. We track the income the women make based on the trainings they take with us. So they’ve taken a cake training, therefore, they've started making cakes they didn't make before and they’re selling them now. you could use any product. So we track that total, we ask women to report those totals, and what that looks for us now, is nearly $10,000 plus in income for women.
You mean one woman is making $10,000?
No no 10,000 total dollars. So if you’re talking about, at this point, 175 women with active loan cycles right now. So when you’re talking about somebody that's making $2 a day, to me it's a great success to know that, on the income side, their lives are totally changing. Where one of our women, for example, made maybe $20 a month total, she’s making $20 a week right now.
She’s one of our women that came to our chocolate making class and created a chocolate business out of it. And she got really fancy about it. Like for the holidays, mothers day, fathers day, Christmas, she does coffee mugs. And through our computer class, she learned to do some electronic images on the coffee cups with messages that she got done at a local printing shop, and stuffed some with her homemade chocolates. So her business is a total success something she didn't do before.
So she has quadrupled her income! So how does that translate to her family in terms of what they could now do that they couldn't before?
Right. So, where money usually goes that you’ll traditionally see as microcredit starts boosting a family they'll do several things with it. The first thing they'll do with it is make sure that their kids get food. They'll start replacing things like instead of eating a piece of bread for breakfast and lunch, or bread for breakfast and lunch, they'll add in some protein there if they can. So it happens to work through how their kids are eating. The second area is school. It's a catholic nation where school is free, supposedly, but all kids have to go to school in a uniform and they have to get supplies and so those supplies and uniform may equate to $30 a year. And its sometimes just money that they cannot get together. They can’t get ahead that much. And so they'll put it right into that school pot right away along with the food. And the third thing is really house improvement. You’ll see, it's a poverty indicator; the first indicator of poverty is floor type. So a family with a dirt floor will often finish their floor into concrete. Or the adobe walls, they'll finish their walls with paint or concrete. So that home improvement is kind of another area you’ll see as well.
How do the husbands feel about the women being the one to provide these types of things for their families?
Right. So a lot of the women we work with are either widowed or single, or they have different fathers to their children. I think there are a lot of interesting dynamics that we don't have to talk about today, but with women being in a less powerful situation and not always choosing their mates, and when they want to mate with somebody and then having children, and having the responsibility of their children and then not always having a collaborative partner to raise those kids. So a lot of our women are in those situations. Now when they do have a family unit, and the husband or partner is involved, I think the most important thing that you can do is engage that male in a conversation. What we do is called the pre interview, before a woman ever gets money. That includes asking about her family situation, socioeconomic situation, the husband has to be involved in that interview.
So making sure it will be successful before you give the money?
Right. We do the interview with everybody to make sure what they really need and they've thought through what they really need. If they need $30 really for what they propose they don't need $100. The end goal is to do no harm. You want to help not harm. So if someone needs 30 don't give them 100. If their propensity to pay is for a $50 loan don't give them a $200 loan.
What if there was a husband that was hostile to the idea of this? Does that factor into whether or not they get the loan?
Yea. It would because you don't want to put a women into a dangerous situation without a doubt. We’ve had very little situations like this. So, you have the interview with this family. If the husband is drunk or violent or if there is an issue there we talk with the women further is this really the best thing for you to do. It seems like a dangerous situation. Sometimes they’ll get handy and they'll borrow through like a family member will take the loan under their name. The other way we really befriend the male side is we do a lot of work with community leaders and neighborhood leaders, and these leaders are all males in this culture. So when you have the trust of those leaders, information travels by what we call passé la vois (pass the voice). Its old school you know, its not texting messages like “Maggie’s a good person, meet with her.” Its people passing the information on that you’re a good person doing a good thing and you’re organization can be trusted. If that passa la vois happens and it’s positive for you, it’s usually a-ok. Now the last thing is that if you’re engaging a male in the discussion and it's a family business, and a lot of it happens in agriculture and husbandry, they’re raising animals as a family unit, they’re getting grains to sell in the market, or they’re making wood structures a lot of the stuff is happening in the family—they have a family store. And if you just have that conversation with the family it’s often seen that it could benefit the family business rather than be a detriment. It’s not a power struggle it’s meant to lift a family.
Maggie December 8 is your Holiday of Hope Benefit Gala. Tell us about it.
Okay so on December 8, this is our last event of the year. Holiday of Hope is in our third year. What it will look like is just an evening of fun. Well have some Latin jazz, some wonderful food and drink, and a silent and live auction with some wonderful things that the community has kind of contributed to our organization. And if anyone would like any more information about that they can go to our website which you said is www.discoverhopefund.org.
How much are you hoping to raise?
Our raise goal for that evening is $20,000.
What does $20,000 translate into in the way of loans?
So for us $20,000 would give us… We’d like to do at least 150 new loans next year, but were also taking care of the women that are still in our system. And so they’re in their second or third or fourth generation loans because you usually go 10 cycles with a women to get them some savings for their lives. So we have these 150 going and we want another 150 and then we want to do 375 trainings next year.
And you know longer term, maybe 3 years from now.
What are your goals for Discover Hope Fund?
So we have several high level goals. Longer term would be we have two sights waiting for us to come to them right now. One is in Peruvian Ecuadorian border, another area in Northern Andes that we have a local partner at that we need to raise the money ourselves to have these sites. So we want new sites. We’re also looking at Mexico for a site. And then another high-level goal is to package up the model of what we do a-z, how do you do the micro credit plus model anywhere in the world and to really make that an available published accessible piece for people.
So kind of like a franchise kind of thing. Like plug in and..
It won’t be us leading all those all over the world. It will be giving people the knowledge if they would like to assume that into their organization or build it themselves.
Is it a hot topic, meaning are there a lot of people looking to do this?
Oh I get probably 2-4 emails a month, hey I'm in this country, I'm working with this partner, how are you doing what you’re doing? So I think the question for us is how can we leave a legacy if were small and we’re roots and we cant go to all these places what is the legacy you can pass on and that's how you do it actually.
Wednesday, October 27, 2010
Bart Bohn of the ATI Talks about the Texas Wireless Summit
Bart Bohn of the ATI Talks about the Texas Wireless Summit
Where are you from originally?
Grew up in Houston.
What university did you go to?
Went to college at Trinity University in San Antonio and to UT-McCombs for my MBA.
What brought you to Austin?
After college I spent six years in Houston in strategy consulting. Through that time I grew a passion for working with clients and found the startup and incubator space to be the most rewarding. Austin’s entrepreneurial community and the ATI in particular was a great place to launch a new phase in working with the high-tech startup ecosystem. My entry point was UT, where I got an MBA in finance and entrepreneurship.
What is the idea behind your group?
Texas Wireless Summit is an industry-focused conference to provide a platform for industry leaders to discuss emerging technologies and business models that give insight on the next three or more years of the wireless industry’s trajectory. ATI-Wireless and UT’s Wireless Networking and Communications Group will focus on technology and startups that will enable the continued innovation surge in the wireless industry.
What need does it fulfill?
On the Austin level it provides an event to bring together the wireless and mobile community. Additionally it provides a conduit for WNCG, ATI-Wireless and the startup community to interact and exchange ideas with the traditional leading wireless companies.
What exactly does your group do?
TWS is and industry conference that showcases the most compelling wireless technologies and research.
Who is it for?
Attendees are industry executives, investors, media, startups, technologists and the service companies critical to the industry.
What was the most challenging aspect of starting up the group?
I didn’t start it. The greatest challenge in keeping it going, as with any front-line technology sector, is continuing to provide cutting-edge content and discussion points.
What is the next step for you and your group?
TWS is only half-way to taking over the world, so that’s a good question. Our next step is to continue to reinforce our position as the go-to event for compelling wireless technology, innovation and discussion.
What advice do you have for entrepreneurs?
Something that will be on full display at this year’s TWS is the collision of the internet- and web-based startup culture with the traditional “heavy-iron” wireless industry culture. You’ll see keynotes and panels from the legacy players and a host of startups showcasing their web-based technologies that will highlight how the industry is enabling this collision and benefiting from it.
Depending on the specific nature of your technology and the way it needs to be commercialized, be aware of the dynamics of that collision. On the surface you have the apps space, which Google and Apple have created by collaborating with the traditional telecomm-infrastructure folks that provide the core communications platform and services. Either strata is navigable, but the path through each of them is different. As a wireless entrepreneur, you need to be aware of which level you’re on.
Tell me more about your upcoming event.
Early bird pricing ends Nov. 5, so sign up now.
What Austin-based resource have you found to be the most helpful and why?
The ATI-Wireless Incubator and UT’s WNCG are the premiere catalysts for wireless entrepreneurs in Central Texas.
Where are you from originally?
Grew up in Houston.
What university did you go to?
Went to college at Trinity University in San Antonio and to UT-McCombs for my MBA.
What brought you to Austin?
After college I spent six years in Houston in strategy consulting. Through that time I grew a passion for working with clients and found the startup and incubator space to be the most rewarding. Austin’s entrepreneurial community and the ATI in particular was a great place to launch a new phase in working with the high-tech startup ecosystem. My entry point was UT, where I got an MBA in finance and entrepreneurship.
What is the idea behind your group?
Texas Wireless Summit is an industry-focused conference to provide a platform for industry leaders to discuss emerging technologies and business models that give insight on the next three or more years of the wireless industry’s trajectory. ATI-Wireless and UT’s Wireless Networking and Communications Group will focus on technology and startups that will enable the continued innovation surge in the wireless industry.
What need does it fulfill?
On the Austin level it provides an event to bring together the wireless and mobile community. Additionally it provides a conduit for WNCG, ATI-Wireless and the startup community to interact and exchange ideas with the traditional leading wireless companies.
What exactly does your group do?
TWS is and industry conference that showcases the most compelling wireless technologies and research.
Who is it for?
Attendees are industry executives, investors, media, startups, technologists and the service companies critical to the industry.
What was the most challenging aspect of starting up the group?
I didn’t start it. The greatest challenge in keeping it going, as with any front-line technology sector, is continuing to provide cutting-edge content and discussion points.
What is the next step for you and your group?
TWS is only half-way to taking over the world, so that’s a good question. Our next step is to continue to reinforce our position as the go-to event for compelling wireless technology, innovation and discussion.
What advice do you have for entrepreneurs?
Something that will be on full display at this year’s TWS is the collision of the internet- and web-based startup culture with the traditional “heavy-iron” wireless industry culture. You’ll see keynotes and panels from the legacy players and a host of startups showcasing their web-based technologies that will highlight how the industry is enabling this collision and benefiting from it.
Depending on the specific nature of your technology and the way it needs to be commercialized, be aware of the dynamics of that collision. On the surface you have the apps space, which Google and Apple have created by collaborating with the traditional telecomm-infrastructure folks that provide the core communications platform and services. Either strata is navigable, but the path through each of them is different. As a wireless entrepreneur, you need to be aware of which level you’re on.
Tell me more about your upcoming event.
Early bird pricing ends Nov. 5, so sign up now.
What Austin-based resource have you found to be the most helpful and why?
The ATI-Wireless Incubator and UT’s WNCG are the premiere catalysts for wireless entrepreneurs in Central Texas.
Wednesday, October 20, 2010
Business Plans vs. Business Models
In starting a new venture, most start by trying to write the business plan because everyone tells you how much you need one. So you sit down to write the business plan and you start through your checklist. Typically this is how it goes:
“Management team -- well so far, there’s only me, so I’ll just add two more positions to be determined later. Next, it’s Problem to be Solved. Well, that’s an interesting question. I’m solving so many problems, I’ll just say, we’re going to save the customer time, and make it easier for him to do his job. That should cover it. “
If the above description sounds familiar it should because most everyone starts by trying to write the business plan but there’s just not enough information to carry it through at the early stage. There are too many decisions still to be made. There’s too much information not yet accumulated.
Instead of working on the business plan from day one, work on the business model. Focus on how you are going to generate revenue and what will be your core costs. If you figure out this, then you have the key elements of a business plan. You can fill in the other pieces based on the business model. For example, the management team positions will become clear once you know the business model. The problem you are solving is much clearer and so it goes with the other elements of the plan.
Best regards,
Hall T.
Friday, October 15, 2010
5 Common Misconceptions About Starting Your Own Business
Starting your own business is extremely appealing for a lot of reasons. Being your own boss, running things the way you want to, and doing something you love are key reasons why people seriously consider making the immense investment in time and money -- and taking on the significant risk of failure. This risk can be minimized if you actually know what you're getting yourself into. Here are 5 common misconceptions of starting your own business with a dose of reality to clear up any confusion.
1. If I have my own business I won't have to work as much. That is completely false, especially when getting your idea off the ground -- and turning it into profit. Expect longer hours, more tasks, and in all likelihood more headaches than when working under someone else. Even if you have staff, you still have to set them on the right course, deal with payroll, hiring and management, etc., etc.
2. I'll be able to set my own hours and create my own schedule. To some extent that is true, but a business' priorities lie with customers and clients. You, and your business, have to be there for them. And as head of a business, you have to be there for your employees as well, ready to assist at all times in any way necessary to keep your business running well. Running an online-based business allows some more flexibility, and to learn more check out these Great Resources for Online Entrepeneurs.
3. It will be easy to attract investors and customers to my business. Unfortunately, there's a lot of competition out there for peoples' dollars, whether those dollars be from investors or customers. You have to sell to both of these groups, and often, there is no such thing as an easy sell. Be prepared for some slow (and low on revenue) times and be prepared for lots of "no"s. To make yourself more attractive to investors and customers, just be prepared: have a polished, well-thought out plan to present to potential investors and have an equally thoughtful and high-quality product available for potential customers and clients.
4. The books will be easy. Taxes, payroll, and money management can be difficult. There are a lot of numbers to keep track of and (hopefully) a lot of money to be accounted for. Make it easier on yourself, if you have the resources, by getting an accountant and Human Resources personnel.
5. Business owners are rich and someday I will be too. It's a nice thought but the reality is that many business owners are just scraping by, hoping to keep their business and personal finances just barely in the black. Sacrifices will be necessary until the business becomes profitable, and unfortunately, many businesses never do. Starting your own business can be an incredibly rewarding and exciting venture, but it takes a lot of hard work and does not always lead to equal rewards.
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Joseph Gustav is a guest blogger for Pounding the Pavement, an up-and-coming outlet for career-oriented expression. An ambitious freelancer, Mr. Gustav also contributes articles about call center management careers for Guide to Career Education.
1. If I have my own business I won't have to work as much. That is completely false, especially when getting your idea off the ground -- and turning it into profit. Expect longer hours, more tasks, and in all likelihood more headaches than when working under someone else. Even if you have staff, you still have to set them on the right course, deal with payroll, hiring and management, etc., etc.
2. I'll be able to set my own hours and create my own schedule. To some extent that is true, but a business' priorities lie with customers and clients. You, and your business, have to be there for them. And as head of a business, you have to be there for your employees as well, ready to assist at all times in any way necessary to keep your business running well. Running an online-based business allows some more flexibility, and to learn more check out these Great Resources for Online Entrepeneurs.
3. It will be easy to attract investors and customers to my business. Unfortunately, there's a lot of competition out there for peoples' dollars, whether those dollars be from investors or customers. You have to sell to both of these groups, and often, there is no such thing as an easy sell. Be prepared for some slow (and low on revenue) times and be prepared for lots of "no"s. To make yourself more attractive to investors and customers, just be prepared: have a polished, well-thought out plan to present to potential investors and have an equally thoughtful and high-quality product available for potential customers and clients.
4. The books will be easy. Taxes, payroll, and money management can be difficult. There are a lot of numbers to keep track of and (hopefully) a lot of money to be accounted for. Make it easier on yourself, if you have the resources, by getting an accountant and Human Resources personnel.
5. Business owners are rich and someday I will be too. It's a nice thought but the reality is that many business owners are just scraping by, hoping to keep their business and personal finances just barely in the black. Sacrifices will be necessary until the business becomes profitable, and unfortunately, many businesses never do. Starting your own business can be an incredibly rewarding and exciting venture, but it takes a lot of hard work and does not always lead to equal rewards.
---------------------------------------------------------------------------------------------------------------------
Joseph Gustav is a guest blogger for Pounding the Pavement, an up-and-coming outlet for career-oriented expression. An ambitious freelancer, Mr. Gustav also contributes articles about call center management careers for Guide to Career Education.
Monday, October 4, 2010
Josh Hare of Hops and Grain Talks About His MicroBrewery
Josh Hare of Hops and Grain Talks About His MicroBrewery
Where are you from originally?
I’m originally from Abilene, TX. Lived there most of my life until graduating from college.
What university did you go to?
I went to Abilene Christian University. Graduated with a degree in Eduction and a minor in Environmental Science. I also spent 3 years in the ACU College of Business Administration.
What brought you to Austin?
I moved to Austin from Boulder, CO as an aspiring triathlete. I had a number of years experience in specialty retail and upon moving here, met with a local entrepreneur and opened a specialty running store in East Austin called Rogue Equipment. I served as the general manager of the store for two years before leaving to open a microbrewery.
What is the idea behind your startup?
The idea behind my startup is to provide handcrafted beer and dog treats to the people of the Hill Country making sustainable decisions both in terms of the environment and the business. All of our beers are packaged into aluminum cans, the most recyclable container on the planet. We handcraft our dog treats form the malted barley that has been used in the brewing process. Brewing has stripped the grain of it’s sugar but a significant portion of fiber and protein still remain.
What need does it fulfill?
There is an underserved craft beer market in Austin with absolutely no brewery packaging their product in cans. Many of the outdoor activities and festivals that take place in Austin prohibit glass. Craft beer in cans is seeing incredible sales growth and many attribute this to the ease and portability of aluminum cans.
What exactly does your product do?
My products provide a high-quality local option that saves energy and supports locally by allowing great margins for retail and restaurant establishments.
Who is it for?
The beer is for anyone of legal drinking age looking for a full flavored, handcrafted beer. The dog treats are for anyone looking for a healthy and local alternative to many of the sugar and preservative filled dog treats that are currently on the market.
What was the most challenging aspect of starting up a business?
The most challenging aspect of starting the business has been the fundraising. There have been many economic factors that have made it fairly challenging to find investors. Because we chose to avoid any debt financing and offered a fairly low entry investment option it has required a substantially larger amount of meetings and presentations that would have otherwise been required.
What is the next step for you and your startup?
The next step is to raise the remaining investment capital to cover operating expenses during the first year. The equipment has been purchased and the warehouse space has been secured. Both of these pieces will come to fruition in December and the brewery will begin operating in January of 2011.
What advice do you have for entrepreneurs?
My biggest piece of advice is to get to know the community that you plan to market to. Get to know your customers and find out what communities they are a part of. There is sure to be a common thread. Lastly, utilize social media to the utmost. It’s free and an incredibly effective way to create a personal connection with your customers.
What Austin-based resource have you found to be the most helpful and why?
I have found many of the local Austin websites and discussion forums to be very helpful in researching my target market. There are a number of magazines that cater to the active community and these have been very helpful in the start up phases.
Where are you from originally?
I’m originally from Abilene, TX. Lived there most of my life until graduating from college.
What university did you go to?
I went to Abilene Christian University. Graduated with a degree in Eduction and a minor in Environmental Science. I also spent 3 years in the ACU College of Business Administration.
What brought you to Austin?
I moved to Austin from Boulder, CO as an aspiring triathlete. I had a number of years experience in specialty retail and upon moving here, met with a local entrepreneur and opened a specialty running store in East Austin called Rogue Equipment. I served as the general manager of the store for two years before leaving to open a microbrewery.
What is the idea behind your startup?
The idea behind my startup is to provide handcrafted beer and dog treats to the people of the Hill Country making sustainable decisions both in terms of the environment and the business. All of our beers are packaged into aluminum cans, the most recyclable container on the planet. We handcraft our dog treats form the malted barley that has been used in the brewing process. Brewing has stripped the grain of it’s sugar but a significant portion of fiber and protein still remain.
What need does it fulfill?
There is an underserved craft beer market in Austin with absolutely no brewery packaging their product in cans. Many of the outdoor activities and festivals that take place in Austin prohibit glass. Craft beer in cans is seeing incredible sales growth and many attribute this to the ease and portability of aluminum cans.
What exactly does your product do?
My products provide a high-quality local option that saves energy and supports locally by allowing great margins for retail and restaurant establishments.
Who is it for?
The beer is for anyone of legal drinking age looking for a full flavored, handcrafted beer. The dog treats are for anyone looking for a healthy and local alternative to many of the sugar and preservative filled dog treats that are currently on the market.
What was the most challenging aspect of starting up a business?
The most challenging aspect of starting the business has been the fundraising. There have been many economic factors that have made it fairly challenging to find investors. Because we chose to avoid any debt financing and offered a fairly low entry investment option it has required a substantially larger amount of meetings and presentations that would have otherwise been required.
What is the next step for you and your startup?
The next step is to raise the remaining investment capital to cover operating expenses during the first year. The equipment has been purchased and the warehouse space has been secured. Both of these pieces will come to fruition in December and the brewery will begin operating in January of 2011.
What advice do you have for entrepreneurs?
My biggest piece of advice is to get to know the community that you plan to market to. Get to know your customers and find out what communities they are a part of. There is sure to be a common thread. Lastly, utilize social media to the utmost. It’s free and an incredibly effective way to create a personal connection with your customers.
What Austin-based resource have you found to be the most helpful and why?
I have found many of the local Austin websites and discussion forums to be very helpful in researching my target market. There are a number of magazines that cater to the active community and these have been very helpful in the start up phases.
Wednesday, September 22, 2010
Irene Mwathi of the NBMBAA Talks about their Upcoming Funding Forum
Where are you from originally?
I was born and raised in Kenya until my teenage years. Thereafter we lived in Europe before I came to the United States for College.
What university did you go to?
I did my bachelors in James Clark School of Engineering – University of Maryland and McDonough School of Business – Georgetown University
What brought you to Austin?
I visited a friend of mine during her graduation and fell in love with the city. I later moved my consulting firm here and have loved it ever since.
What is the idea behind your group?
National Black MBA Association, Austin Chapter: http://www.austinblackmba.org/
The mission of Austin Chapter of the NBMBAA is to lead in the creation of educational opportunities and economic growth for African American Professionals in Central Texas. Our Chapter is comprised of a network of business professionals, business students, and entrepreneurs whose goal is to share knowledge, build business skills, and generate employment opportunities in management fields. The NBMBAA Austin Chapter was established in December 2006 and since then has continued to educate its members both on the professional and entrepreneurial pursuits.
What need does it fulfill?
The need for this event is to provide minority business owners who are set for their next challenge an avenue to take their businesses to the next level. By bringing VCs and AIs and minority innovators together we hope to enrich the community as well as educate our entrepreneurs.
What exactly does your group do?
In addition to providing professional, leadership and entrepreneurial development to our members we also have a leaders of Tomorrow (LOT) program, a high school mentoring program that has helped to expand the overall number of minority leaders in corporate America by providing mentor/leader relationships with business executives and high school students in the community. We also have the Rising Stars Collegiate Program launched on Oct. 13th, 2009 in partnership with Huston-Tillotson University. Local business professionals and leaders serve as volunteer mentors to students, one mentor per student. Events such as the upcoming event help us identify successful entrepreneurs who can mentor entrepreneurial innovators in our chapter.
Who is it for?
Anyone interested in the progress of minorities in Austin.
What was the most challenging aspect of starting up the group?
The most challenging aspect of starting a group is finding the resources to support the organization’s initiatives and also finding the right people who have enough time to volunteer and help execute the vision and initiatives of the organization.
What is the next step for you and your group?
Since we have only been existence for four years and the main focus has been getting started in the right direction, the next step is creating awareness about the organization in the Austin community and growing the chapter in membership and sponsorship. Building value for our members is our key focus 2011.
What advice do you have for entrepreneurs?
Austin has wonderful resource organizations to support your dreams. Joining such organizations as AEN, BootStrap Austin, Texas Venture Labs, Tech Ranch and leveraging RISE Alliance conferences, start-up conferences you are sure to network with like minds to take you to the next level.
Tell me more about your upcomingevent
This upcoming event program highlights different avenues for funding and sessions from some of Austin’s business leaders. We also plan to have a VC and AI funding symposium which will be the main feature after the luncheon, where at least 5 participants will get to pitch in front of an audience for funding between $150K – 5M. Keynotes include The path to entrepreneurship featuring Bijoy Goswami and luncheon keynote featuring Corey Bell on Serial Entrepreneur. The details are:
Event Location: AT & T Executive Center – UT,
Time: 8.00AM – 4.00PM
Date: November 12th, 2010
What Austin-based resource have you found to be the most helpful and why?
AEN and ABJ are the most helpful as they keep entrepreneurs connected and well informed on what is going on in the city. There’s never a shortage of business development ideas at their events and connecting with like minds helps keeps you innovative.
I was born and raised in Kenya until my teenage years. Thereafter we lived in Europe before I came to the United States for College.
What university did you go to?
I did my bachelors in James Clark School of Engineering – University of Maryland and McDonough School of Business – Georgetown University
What brought you to Austin?
I visited a friend of mine during her graduation and fell in love with the city. I later moved my consulting firm here and have loved it ever since.
What is the idea behind your group?
National Black MBA Association, Austin Chapter: http://www.austinblackmba.org/
The mission of Austin Chapter of the NBMBAA is to lead in the creation of educational opportunities and economic growth for African American Professionals in Central Texas. Our Chapter is comprised of a network of business professionals, business students, and entrepreneurs whose goal is to share knowledge, build business skills, and generate employment opportunities in management fields. The NBMBAA Austin Chapter was established in December 2006 and since then has continued to educate its members both on the professional and entrepreneurial pursuits.
What need does it fulfill?
The need for this event is to provide minority business owners who are set for their next challenge an avenue to take their businesses to the next level. By bringing VCs and AIs and minority innovators together we hope to enrich the community as well as educate our entrepreneurs.
What exactly does your group do?
In addition to providing professional, leadership and entrepreneurial development to our members we also have a leaders of Tomorrow (LOT) program, a high school mentoring program that has helped to expand the overall number of minority leaders in corporate America by providing mentor/leader relationships with business executives and high school students in the community. We also have the Rising Stars Collegiate Program launched on Oct. 13th, 2009 in partnership with Huston-Tillotson University. Local business professionals and leaders serve as volunteer mentors to students, one mentor per student. Events such as the upcoming event help us identify successful entrepreneurs who can mentor entrepreneurial innovators in our chapter.
Who is it for?
Anyone interested in the progress of minorities in Austin.
What was the most challenging aspect of starting up the group?
The most challenging aspect of starting a group is finding the resources to support the organization’s initiatives and also finding the right people who have enough time to volunteer and help execute the vision and initiatives of the organization.
What is the next step for you and your group?
Since we have only been existence for four years and the main focus has been getting started in the right direction, the next step is creating awareness about the organization in the Austin community and growing the chapter in membership and sponsorship. Building value for our members is our key focus 2011.
What advice do you have for entrepreneurs?
Austin has wonderful resource organizations to support your dreams. Joining such organizations as AEN, BootStrap Austin, Texas Venture Labs, Tech Ranch and leveraging RISE Alliance conferences, start-up conferences you are sure to network with like minds to take you to the next level.
Tell me more about your upcomingevent
This upcoming event program highlights different avenues for funding and sessions from some of Austin’s business leaders. We also plan to have a VC and AI funding symposium which will be the main feature after the luncheon, where at least 5 participants will get to pitch in front of an audience for funding between $150K – 5M. Keynotes include The path to entrepreneurship featuring Bijoy Goswami and luncheon keynote featuring Corey Bell on Serial Entrepreneur. The details are:
Event Location: AT & T Executive Center – UT,
Time: 8.00AM – 4.00PM
Date: November 12th, 2010
What Austin-based resource have you found to be the most helpful and why?
AEN and ABJ are the most helpful as they keep entrepreneurs connected and well informed on what is going on in the city. There’s never a shortage of business development ideas at their events and connecting with like minds helps keeps you innovative.
Saturday, September 18, 2010
Aaron Lyons of McCombs School of Business Talks about Texas Startup Meetup
Where are you from originally?
I’ve lived all over the country, but have called Austin home for the last 15 years.
What university did you go to?
I received my undergraduate degree from UT in 2005, and am currently in my second year of the full time MBA program at UT focusing on entrepreneurship.
What brought you to Austin?
I grew up in Austin but moved to Dallas to work after school. I moved back to Austin for school and to get back into the entrepreneurship scene.
What is your passion and strength?
Other than family and UT football, my biggest passion is entrepreneurship and taking things from an idea to reality. I think this passion, along with my creativity and the ability to understand and relate to the consumer, are the biggest strengths I bring to the table.
What need does it fulfill?
Anytime you’re starting a company or working for a start-up, you better have passion. Lack of resources forces you to be creative, and if you don’t understand the consumer there’s no way you’ll succeed.
What exactly do you bring to startups?
Because of my diverse experience and background, I have the ability to adapt, learn quickly, and wear multiple hats. In a startup environment you play different roles every day, so it’s important to be able to step outside of your comfort zone and take on whatever challenge may present itself.
What type of startup would benefit from your strengths?
Any company that is truly customer centric. It’s easy to say you’re customer centric, but I mean companies that revolve around and engage the customer in every aspect of the business.
What was the most challenging aspect of starting up a business?
Well since I’m going through the process now, I can tell you that investing the time and resources up front to validate the market opportunity is difficult and exhausting, but it’s something that must be done and is often overlooked.
What advice do you have for entrepreneurs?
Surround yourself with people who are smarter than you, don’t be afraid to share your ideas and goals, spend as much time as you can up front validating your market
What Austin-based resource have you found to be the most helpful and why?
There is no shortage of them, that’s for sure. AEN, ABJ, AAS are all fantastic at reporting the latest happenings in the Austin entrepreneurial community. Paying attention to the calendars and going to networking events like Start Up Meet Up (SUMU) is ultimately the most valuable thing you can do as an entrepreneur in Austin.
I’ve lived all over the country, but have called Austin home for the last 15 years.
What university did you go to?
I received my undergraduate degree from UT in 2005, and am currently in my second year of the full time MBA program at UT focusing on entrepreneurship.
What brought you to Austin?
I grew up in Austin but moved to Dallas to work after school. I moved back to Austin for school and to get back into the entrepreneurship scene.
What is your passion and strength?
Other than family and UT football, my biggest passion is entrepreneurship and taking things from an idea to reality. I think this passion, along with my creativity and the ability to understand and relate to the consumer, are the biggest strengths I bring to the table.
What need does it fulfill?
Anytime you’re starting a company or working for a start-up, you better have passion. Lack of resources forces you to be creative, and if you don’t understand the consumer there’s no way you’ll succeed.
What exactly do you bring to startups?
Because of my diverse experience and background, I have the ability to adapt, learn quickly, and wear multiple hats. In a startup environment you play different roles every day, so it’s important to be able to step outside of your comfort zone and take on whatever challenge may present itself.
What type of startup would benefit from your strengths?
Any company that is truly customer centric. It’s easy to say you’re customer centric, but I mean companies that revolve around and engage the customer in every aspect of the business.
What was the most challenging aspect of starting up a business?
Well since I’m going through the process now, I can tell you that investing the time and resources up front to validate the market opportunity is difficult and exhausting, but it’s something that must be done and is often overlooked.
What advice do you have for entrepreneurs?
Surround yourself with people who are smarter than you, don’t be afraid to share your ideas and goals, spend as much time as you can up front validating your market
What Austin-based resource have you found to be the most helpful and why?
There is no shortage of them, that’s for sure. AEN, ABJ, AAS are all fantastic at reporting the latest happenings in the Austin entrepreneurial community. Paying attention to the calendars and going to networking events like Start Up Meet Up (SUMU) is ultimately the most valuable thing you can do as an entrepreneur in Austin.
Thursday, September 16, 2010
Shaun Tinoco a SATOP Technical Consultant Talks about NASA Support Startups
Where are you from originally?
I grew up in Thousand Oaks in Southern California enjoying the great weather, beaches and mountains. The Dallas Cowboys used to hold their training camp in T.O., so I was always a fan and now I can watch them every weekend here in Texas. It’s still nice to visit my family out there, but it’s just not affordable anymore.
What university did you go to?
After being a Nuclear Plant Watch Officer in the Navy, I went to UC San Diego to get my BS Mechanical Engineering degree. I also attended the IC2 Institute here at UT-Austin in 2002 to obtain my MS in Technology Commercialization. This is the program that has led me down my present day path.
What brought you to Austin?
As I mentioned before, the affordability of California is difficult and the other side of my family, at the time, had family in Georgetown so we headed east. The timing was good and I landed a position at Applied Materials, but had to endure two separate layoffs in 1996 and again in 2001. So let’s say, I’m not looking to work there anymore.
What is your passion and strength?
Being in the Tech Commercialization field I thoroughly enjoy working with entrepreneurs, inventors and small businesses. These people have such great ideas, but unfortunately not always novel. I attempt to find another use or twist for their technology to keep the possibilities alive, but not at a financial or time cost. If it’s not good I recommend that they stop and move onto something else. I have covered many deserving technologies through IC2 and working at NASA Johnson Space Center’s Tech Transfer Office. By seeing so many it becomes easier to find ways to improve and implement them.
What need does it fulfill?
My desire helps to solve the need or “pain” that the people I work with have. Many are obviously engineers with tremendous intellect for solving technical issues, but don’t have the expertise to solve the business aspects to complete the technology’s lifecycle. I have been an engineer involved with design, quality, manufacturing, implementation, customer support and many other tasks, but now I am on the other side addressing market and risk analysis, partnerships, marketing and licensing.
I am able to understand my customers and then provide services to satisfy them.
What exactly do you bring to startups?
Presently I bring opportunity both through my expertise and with the Space Alliance Technology Outreach Program (SATOP).
Recently I was in Corpus Christi and spoke at the Coastal Bend Business Innovation Center promoting SATOP. There are a number of start-ups housed at their incubator and they were so excited learning about the 40 hours of FREE technical support from NASA that they could get by simply signing up. I had a waiting line after the presentation and signed up three companies that afternoon with three more now working a little more diligently to get their technology ready to be reviewed.
By sitting with them I was able to understand what they were working on, but also heard that they needed technical and business support. They weren’t sure what the next step best may be.
What type of startup would benefit from your strengths?
I’ll start with, definitely not a software or an IT company. I’m a hands-on person and have worked from the bottom of ships to the highs of NASA space technologies.
I enjoy learning about new technologies and how best to apply them. They can be in materials, systems, biotech, nanotech, energy, etc. It doesn’t really matter because I absorb it all and bring the best methods to the table.
Being at NASA has me constantly thinking of ways to use space technologies originally designed for the rigors of harsh environments and how to now implement them down here on Earth. Let’s say I want to bring technology to earth.
What was the most challenging aspect of starting up a business?
Getting paid. I have done plenty of pro bono work while starting up, but now it’s paying off. When you’re on your own you have to constantly be looking for the next customers to work with. Through the SATOP program I have been traveling and telling as many organizations and networking groups about it. This has been double good; small entities are getting free assistance to get them over a barrier and I get to network and develop relationships where I can continue with them during commercialization.
I look forward to talking with any of your entrepreneurial network members to determine what services I can provide for them.
What advice do you have for entrepreneurs?
Take advantage of real free opportunities and sign up for the SATOP program at www.spacetechsolutions.com. It’s funded by NASA with no cost to you. For once, a free government program that you can take from.
Network and get known. You never know when the next opportunity will happen.
What Austin-based resource have you found to be the most helpful and why?
My strongest relationship in Austin is with the IC2 Institute. Our alums are in so many different industries that there is always someone that can provide a quick answer.
Of course the Austin Entrepreneur Network and Austin Inventors & Entrepreneurs Association have been helpful in supporting my work with SATOP.
Thanks,
Shaun
I grew up in Thousand Oaks in Southern California enjoying the great weather, beaches and mountains. The Dallas Cowboys used to hold their training camp in T.O., so I was always a fan and now I can watch them every weekend here in Texas. It’s still nice to visit my family out there, but it’s just not affordable anymore.
What university did you go to?
After being a Nuclear Plant Watch Officer in the Navy, I went to UC San Diego to get my BS Mechanical Engineering degree. I also attended the IC2 Institute here at UT-Austin in 2002 to obtain my MS in Technology Commercialization. This is the program that has led me down my present day path.
What brought you to Austin?
As I mentioned before, the affordability of California is difficult and the other side of my family, at the time, had family in Georgetown so we headed east. The timing was good and I landed a position at Applied Materials, but had to endure two separate layoffs in 1996 and again in 2001. So let’s say, I’m not looking to work there anymore.
What is your passion and strength?
Being in the Tech Commercialization field I thoroughly enjoy working with entrepreneurs, inventors and small businesses. These people have such great ideas, but unfortunately not always novel. I attempt to find another use or twist for their technology to keep the possibilities alive, but not at a financial or time cost. If it’s not good I recommend that they stop and move onto something else. I have covered many deserving technologies through IC2 and working at NASA Johnson Space Center’s Tech Transfer Office. By seeing so many it becomes easier to find ways to improve and implement them.
What need does it fulfill?
My desire helps to solve the need or “pain” that the people I work with have. Many are obviously engineers with tremendous intellect for solving technical issues, but don’t have the expertise to solve the business aspects to complete the technology’s lifecycle. I have been an engineer involved with design, quality, manufacturing, implementation, customer support and many other tasks, but now I am on the other side addressing market and risk analysis, partnerships, marketing and licensing.
I am able to understand my customers and then provide services to satisfy them.
What exactly do you bring to startups?
Presently I bring opportunity both through my expertise and with the Space Alliance Technology Outreach Program (SATOP).
Recently I was in Corpus Christi and spoke at the Coastal Bend Business Innovation Center promoting SATOP. There are a number of start-ups housed at their incubator and they were so excited learning about the 40 hours of FREE technical support from NASA that they could get by simply signing up. I had a waiting line after the presentation and signed up three companies that afternoon with three more now working a little more diligently to get their technology ready to be reviewed.
By sitting with them I was able to understand what they were working on, but also heard that they needed technical and business support. They weren’t sure what the next step best may be.
What type of startup would benefit from your strengths?
I’ll start with, definitely not a software or an IT company. I’m a hands-on person and have worked from the bottom of ships to the highs of NASA space technologies.
I enjoy learning about new technologies and how best to apply them. They can be in materials, systems, biotech, nanotech, energy, etc. It doesn’t really matter because I absorb it all and bring the best methods to the table.
Being at NASA has me constantly thinking of ways to use space technologies originally designed for the rigors of harsh environments and how to now implement them down here on Earth. Let’s say I want to bring technology to earth.
What was the most challenging aspect of starting up a business?
Getting paid. I have done plenty of pro bono work while starting up, but now it’s paying off. When you’re on your own you have to constantly be looking for the next customers to work with. Through the SATOP program I have been traveling and telling as many organizations and networking groups about it. This has been double good; small entities are getting free assistance to get them over a barrier and I get to network and develop relationships where I can continue with them during commercialization.
I look forward to talking with any of your entrepreneurial network members to determine what services I can provide for them.
What advice do you have for entrepreneurs?
Take advantage of real free opportunities and sign up for the SATOP program at www.spacetechsolutions.com. It’s funded by NASA with no cost to you. For once, a free government program that you can take from.
Network and get known. You never know when the next opportunity will happen.
What Austin-based resource have you found to be the most helpful and why?
My strongest relationship in Austin is with the IC2 Institute. Our alums are in so many different industries that there is always someone that can provide a quick answer.
Of course the Austin Entrepreneur Network and Austin Inventors & Entrepreneurs Association have been helpful in supporting my work with SATOP.
Thanks,
Shaun
Wednesday, September 15, 2010
Sales 101--The Three Basic Qualifiers
In sales, there are three basic qualifiers that indicate you’re on the path to a successful sale.
The first is confirming the need for your product or service. They must have a real need in order to go through with purchasing the product.
The second is to ensure the person you are talking to can make the decision to buy. If they can’t make the decision then you have to start over again with someone else.
The third is determining if they have a budget for the product/service you have to offer. If they don’t have the funds available then you’ll be convincing someone to buy your product who has no ability to actually proceed.
Best regards,
Hall T.
Thursday, September 9, 2010
Brandon Leblanc of Texas Evening Entrepreneurs Talks About His Group
Where are you from originally?
I was born in New Orleans, but I spent the first few years of my life in the Middle East(Egypt, UAE). I moved the Dallas area in the 6th grade.
What university did you go to?
I went to the University of Texas, and I am back there now getting my MBA.
What brought you to Austin?
School, and then I just couldn’t find a compelling reason to leave.
What is your passion and strength?
Providing services or products that add value to people’s lives in forum that is an integral part of its community.
What need does it fulfill?
For me it fulfills the need to see the results of my work. To feel like I did something productive and beneficial at the end of the day.
What exactly do you bring to startups?
I’m still working on that. My natural bent is creative solutions to problems or identifying a void in a market. But I am building the skills to implement all the moving parts to an idea.
What type of startup would benefit from your strengths?
Those that need an outside perspective. Someone who can understand what they are trying to do, but may not be married to the way they are going about it.
What was the most challenging aspect of starting up a business?
I wish I had a good answer to this but I don’t.
What advice do you have for entrepreneurs?
Research. Everthing.
What Austin-based resource have you found to be the most helpful and why?
So far grad school, and taking the opportunity to work with startups through educational partnerships.
I am in the part time program, which means I am working full time while I go to school. In lieu of internships we have the opportunity to work on ENHANCE projects. These are actual projects for actual companies that the grad students work on and present findings to the company. Most of these are found through University staff and are from larger companies.
As a member and now President of the Texas Evening Entrepreneurs I have been involved in recruiting projects from small businesses in the Austin area. It allows us to work on something entrepreneurial, and provides small business owners a team of 3-5 intelligent people to work on an issue they are facing for free.
Our official website is being revamped but if there is any interest in this or the other opportunities we have for entrepreneurs through TEE please email me at Brandon.Leblanc@mba12.mccombs.utexas.edu or connect to our facebook group http://www.facebook.com/#!/group.php?gid=79967277818
I was born in New Orleans, but I spent the first few years of my life in the Middle East(Egypt, UAE). I moved the Dallas area in the 6th grade.
What university did you go to?
I went to the University of Texas, and I am back there now getting my MBA.
What brought you to Austin?
School, and then I just couldn’t find a compelling reason to leave.
What is your passion and strength?
Providing services or products that add value to people’s lives in forum that is an integral part of its community.
What need does it fulfill?
For me it fulfills the need to see the results of my work. To feel like I did something productive and beneficial at the end of the day.
What exactly do you bring to startups?
I’m still working on that. My natural bent is creative solutions to problems or identifying a void in a market. But I am building the skills to implement all the moving parts to an idea.
What type of startup would benefit from your strengths?
Those that need an outside perspective. Someone who can understand what they are trying to do, but may not be married to the way they are going about it.
What was the most challenging aspect of starting up a business?
I wish I had a good answer to this but I don’t.
What advice do you have for entrepreneurs?
Research. Everthing.
What Austin-based resource have you found to be the most helpful and why?
So far grad school, and taking the opportunity to work with startups through educational partnerships.
I am in the part time program, which means I am working full time while I go to school. In lieu of internships we have the opportunity to work on ENHANCE projects. These are actual projects for actual companies that the grad students work on and present findings to the company. Most of these are found through University staff and are from larger companies.
As a member and now President of the Texas Evening Entrepreneurs I have been involved in recruiting projects from small businesses in the Austin area. It allows us to work on something entrepreneurial, and provides small business owners a team of 3-5 intelligent people to work on an issue they are facing for free.
Our official website is being revamped but if there is any interest in this or the other opportunities we have for entrepreneurs through TEE please email me at Brandon.Leblanc@mba12.mccombs.utexas.edu or connect to our facebook group http://www.facebook.com/#!/group.php?gid=79967277818
Wednesday, September 1, 2010
Content-Based Marketing -- -5 Steps to Creating a Content-Based Marketing Campaign
To gain attention in today’s business world you need to have something relevant, informative, and interesting to say. The days of banner ads are long gone. Content-based marketing will help you establish your name in the market. Here are the five steps to creating a content-based marketing campaign:
1. Know your audience--know their interests, care-abouts, problems, and issues.
2. Create a Mantra and a Message--boil your core message down to a few words
3. Create a list of topics --these topics address what you found in step 1. Focus on what your audience wants to read or know about.
4. Write about those topics in your blog -- you need to write consistently over time to establish a presence in the market.
5. Reformat the content for other purposes -- take the show on the road with presentations, articles, etc.
As you build out your content, you’ll also find you’re niche and your target audience will become more clearly defined.
Best regards,
Hall T.
Thursday, August 26, 2010
Networking--Take Them With You on the Entrepreneurial Journey
I see many companies go through the fund raising process. Without a doubt the ones with networking skills come out with checks more often than those without networking skills. Most investors are found through the networking process and even more importantly those relationships are nurtured through good networking practices. Entrepreneurs seeking funding need to apply their networking skills to the fund raising process just as they do to other areas of their business.
In fact, even before you go out to raise funding you should begin the networking process. When you identify an investor -- ask to put him on your list to keep him informed of your progress. As you make progress send out a short email (say once a month or quarter) with an update of accomplishments.
I advised a local gaming company to do that and when I received their first status report, I was blown away by the accomplishments they had achieved in the past few months including downloads, subscribers, product developments, awards, and more. Had they not sent me that report, I would never have suspected they had as much traction as they did. That’s the key to networking -- making contact and keeping those contacts with you on the journey.
Best regards,
Hall T.
Wednesday, August 25, 2010
Guest Blogger-- Kevin Ready 10 Seconds and Your Business is Toast!
The Survival Tactic Every Company Needs
Would you keep live hand grenades in your desk drawer?
Not unless you are Blackwater International!
That being the case, why do so many companies keep comparably deadly problems in their metaphorical desk drawer for months or even years without dealing with them?
What are we talking about here?
We are talking about Single Points of Failure!
A single key employee that has unique knowledge required to do your business. What will you do if they move on, or (in business parlance) ‘get hit by a bus?’
A single advertising medium can be a big risk too. If you depend on being on the first page of Google for most of your business, you are going to have problems if or when you are no longer at the top of the search results. Do you drive most of your traffic from Google AdWords? What would happen if you could no longer advertise there?
An outsized large client – If your company depends disproportionately on one client like Wal-Mart, then you are clearly at risk.
A Single Sales Channel - I was a partner in a company that depended disproportionately on EBay for moving physical products from its warehouse into consumer's hands. This eventually got 'em in big trouble - as Ebay.com policies frequently changed, and their systems could be unstable.
A Single Financial Pathway- This is a huge one. If you are an online merchant, what will you do if your merchant account gets yanked out from under you? (This happened to us in 1999) Depend on PayPal? What would happen if they suddenly demand over $1 million in warm, fuzzy, escrow money to continue using them? (This happened to us in 2008).
What is the magic solution, the ‘bomb squad’ that will remove that live grenade out of your desk drawer?
One word: Diversification
Diversification is a buzzword in financial markets for a reason. It makes a critical difference when things don't go as planned...and things rarely go as planned. Look through your organization and play a game of "What IF?" and consider what would happen if any of the various cogs and wheels that make your company operate should break, disappear, or stop working. If your investigation hits on any points that make you feel uncomfortable, sick at your stomach or like you want to throw up on your desk -- you've hit gold!
I know what you are saying, I have heard it before. Hell, I have SAID it before: “We know about the dependency but we are too busy working on everything else to deal with it right now.” Having two businesses that took torpedoes to the engine room by the “leave it alone for the time being, too busy to fix it” mindset gives me the right – the privilege – to tell you this:
“You DO have time to fix your dependencies if you decide that it is important to do so.”
Hire more talent and train them to know what your key people know. (This can be TOUGH to do, but should be part of your plan -- even if it is a long term goal).
Build diversification into your marketing plan. Invest in alternative methods of reaching your customers like pay-per-click, traditional advertising (if appropriate), social media, etc. Hope for the best, but plan for the worst. It will mean more business in good times and better survivability in bad times.
Establish multiple payment methods for your transactions. (This too can be hard, but you will never regret finding a viable solution to this single point of failure.)
The Takeaway (and an excellent sound-bite): Fix single points of failure before they bite you in the ass! It is less a matter of “IF”, and really a matter of “WHEN” that bite will come.
Kevin Ready blogs on business and entrepreneurship at http://KevinReady.com
Photo Credit
Would you keep live hand grenades in your desk drawer?
Not unless you are Blackwater International!
That being the case, why do so many companies keep comparably deadly problems in their metaphorical desk drawer for months or even years without dealing with them?
What are we talking about here?
We are talking about Single Points of Failure!
A single key employee that has unique knowledge required to do your business. What will you do if they move on, or (in business parlance) ‘get hit by a bus?’
A single advertising medium can be a big risk too. If you depend on being on the first page of Google for most of your business, you are going to have problems if or when you are no longer at the top of the search results. Do you drive most of your traffic from Google AdWords? What would happen if you could no longer advertise there?
An outsized large client – If your company depends disproportionately on one client like Wal-Mart, then you are clearly at risk.
A Single Sales Channel - I was a partner in a company that depended disproportionately on EBay for moving physical products from its warehouse into consumer's hands. This eventually got 'em in big trouble - as Ebay.com policies frequently changed, and their systems could be unstable.
A Single Financial Pathway- This is a huge one. If you are an online merchant, what will you do if your merchant account gets yanked out from under you? (This happened to us in 1999) Depend on PayPal? What would happen if they suddenly demand over $1 million in warm, fuzzy, escrow money to continue using them? (This happened to us in 2008).
What is the magic solution, the ‘bomb squad’ that will remove that live grenade out of your desk drawer?
One word: Diversification
Diversification is a buzzword in financial markets for a reason. It makes a critical difference when things don't go as planned...and things rarely go as planned. Look through your organization and play a game of "What IF?" and consider what would happen if any of the various cogs and wheels that make your company operate should break, disappear, or stop working. If your investigation hits on any points that make you feel uncomfortable, sick at your stomach or like you want to throw up on your desk -- you've hit gold!
I know what you are saying, I have heard it before. Hell, I have SAID it before: “We know about the dependency but we are too busy working on everything else to deal with it right now.” Having two businesses that took torpedoes to the engine room by the “leave it alone for the time being, too busy to fix it” mindset gives me the right – the privilege – to tell you this:
“You DO have time to fix your dependencies if you decide that it is important to do so.”
Hire more talent and train them to know what your key people know. (This can be TOUGH to do, but should be part of your plan -- even if it is a long term goal).
Build diversification into your marketing plan. Invest in alternative methods of reaching your customers like pay-per-click, traditional advertising (if appropriate), social media, etc. Hope for the best, but plan for the worst. It will mean more business in good times and better survivability in bad times.
Establish multiple payment methods for your transactions. (This too can be hard, but you will never regret finding a viable solution to this single point of failure.)
The Takeaway (and an excellent sound-bite): Fix single points of failure before they bite you in the ass! It is less a matter of “IF”, and really a matter of “WHEN” that bite will come.
Kevin Ready blogs on business and entrepreneurship at http://KevinReady.com
Photo Credit
Wednesday, August 18, 2010
Seed Stage Funding -- Over 200 Accelerator and Incubators in the US Today
Angel groups fund deals that have a product in the market or going to market very soon--say the next three months. Often times, start ups approach me seeking seed stage funding. They have an idea or the beginnings of a product but they need funding to finish the prototype. I call this seed stage funding because they are still fleshing out the business model and product. Formal angel groups typically don’t invest in seed stage deals. They want deals that are further along with more of the risk taken off the table.
There are several sources of funding for seed stage deals. If the entrepreneur only needs $50K to $100K this is more easily raised from family and friends. Also, individual angels will sometimes invest in seed stage deals if they like the idea, the entrepreneur, or the target market.
There’s a host of accelerators and incubator programs which offer funding as well as training. Here’s a list of over 100 accelerator programs and a similar list for for business incubators. Given the lower cost of starting a business today (it’s about 1/10 what it was 10 years ago), these accelerator/incubator programs can be quite helpful.
Best regards,
Hall T.
There are several sources of funding for seed stage deals. If the entrepreneur only needs $50K to $100K this is more easily raised from family and friends. Also, individual angels will sometimes invest in seed stage deals if they like the idea, the entrepreneur, or the target market.
There’s a host of accelerators and incubator programs which offer funding as well as training. Here’s a list of over 100 accelerator programs and a similar list for for business incubators. Given the lower cost of starting a business today (it’s about 1/10 what it was 10 years ago), these accelerator/incubator programs can be quite helpful.
Best regards,
Hall T.
Friday, August 13, 2010
Intellectual Property--The Four Elements of Intellectual Property
Almost every entrepreneur has heard that it’s important to protect the idea and most have heard about patents. But in addition to patents there are other forms of protection that come under the name of Intellectual Property. They are
Trade Secrets--information about your product/service that is not publicly known
Trade Patents--protection based on legal means through the US patent office
Copyrights--set of exclusive rights granted to the author or creator of an original work
Trademarks-- a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services.
A robust intellectual property strategy for your business includes all of the above. Some recommend you start with trade secrets and only move to patents if necessary. Using copyrights and trademarks you can add additional layers of protection around your business.
For a software business many startups talk about their patents, but most angels know that patent protection is weak at best in the software world since there are many ways to work around a patent if someone wants to duplicate the idea. A better measure is to calculate the cost of duplicating the software including design, coding, build out, and most importantly data set build out.
Best regards,
Hall T.
Thursday, August 12, 2010
Startup Weekend will be coming to Austin at CoSpace
Startup Weekend will be coming to Austin at CoSpace (http://cospaceatx.com/) the weekend of September 10th-12th, 2010.
Startup Weekend (http://www.startupweekend.org) recruits a highly motivated group of developers, business managers, startup enthusiasts, marketing gurus, graphic artists and more to a 54 hour event that builds communities, companies and projects. It is an amazing opportunity to connect with other passionate and skilled individuals, and perhaps even find a co-founder or two to transform your idea into reality.
Featured in Forbes, TechCrunch, NY Times and more, Startup Weekend continues to make the buzz with success in more than 100 cities world-wide. Thanks to Joey Pomerenke (http://www.twitter.com/joeypomerenke) of Startup Weekend for bringing the event to Austin for the first time.
“Startup Weekend is a perfect opportunity for entrepreneurs and the local tech scene to network, but also meet potential co-founders and hopefully leave the weekend with a new startup. It is a must attend event if you want to network, find co-founders or just spend the weekend with some passionate and smart people. –Joey Pomerenke”
If you want to be a part of Startup Weekend Austin you should act fast and buy a ticket because participation is limited to the first 75 and tickets are selling fast! Tickets are $75 and include meals and beverages for the entire weekend.
To register now, click here: http://austin.startupweekend.org/tickets/
When: September 10th-12th, 2010
Where: CoSpace (http://cospaceatx.com/)
For more information visit http://austin.startupweekend.org/
Startup Weekend (http://www.startupweekend.org) recruits a highly motivated group of developers, business managers, startup enthusiasts, marketing gurus, graphic artists and more to a 54 hour event that builds communities, companies and projects. It is an amazing opportunity to connect with other passionate and skilled individuals, and perhaps even find a co-founder or two to transform your idea into reality.
Featured in Forbes, TechCrunch, NY Times and more, Startup Weekend continues to make the buzz with success in more than 100 cities world-wide. Thanks to Joey Pomerenke (http://www.twitter.com/joeypomerenke) of Startup Weekend for bringing the event to Austin for the first time.
“Startup Weekend is a perfect opportunity for entrepreneurs and the local tech scene to network, but also meet potential co-founders and hopefully leave the weekend with a new startup. It is a must attend event if you want to network, find co-founders or just spend the weekend with some passionate and smart people. –Joey Pomerenke”
If you want to be a part of Startup Weekend Austin you should act fast and buy a ticket because participation is limited to the first 75 and tickets are selling fast! Tickets are $75 and include meals and beverages for the entire weekend.
To register now, click here: http://austin.startupweekend.org/tickets/
When: September 10th-12th, 2010
Where: CoSpace (http://cospaceatx.com/)
For more information visit http://austin.startupweekend.org/
Monday, August 9, 2010
Legal Structure—What does an Angel Investor Look for in a Startup’s Legal Structure?
Most startups use an LLC structure when they form the business. This is okay for starting a company but when it comes time to raise funding, it needs to be converted to a C-Corp. In general, angel investors don’t like LLCs. Tax laws dictate that owners in an LLC must submit a K-1 tax form each year which is a hassle. The other drawback is that there’s typically not a proper board formed in an LLC so the oversight by investors is not as solid it needs to be from the investor’s point of view. S-Corps limit the number of investors and so doesn’t work well in an angel funded company.
The next question is should it be a Texas-based C-Corp or a Delaware C-Corp? If you raise funding only in Texas then a Texas C-Corp is sufficient for most investors. If you plan to raise funding on the West Coast or East Coast, then a Delaware C-Corp is better. For those who are not familiar with company legal structures, Delaware provides the most advantageous legal environment for companies.
I’m not an attorney and so advise you to seek professional counsel on these matters.
Best regards,
Hall T.
Wednesday, July 28, 2010
Market Positioning-the Five Ps of Marketing but they Start with Positioning
Understanding your position in the market goes a long ways to determining the rest of the marketing decisions you must make. The five Ps in marketing are
1. Positioning
2. Product
3. Place
4. Promotion
5. Price
If you’re going to be the low-cost provider in a niche market, then that will dictate the product must provide the basic value and not much more. Promotion will focus on low-cost and good-value functions. The price must be the lowest and the place will be those marketing channels that cost little or nothing. The place or channel to promote/sell the product must be trafficked by bargain hunters.
On the other hand if you’re going to pursue a product differentiation strategy and you want to position your product as a highly differentiated one, then the product must have additional features, the price can be set at the upper end of the range that customers will pay for it and the promotion will focus on the unique features offered. The place or channel must be trafficked by premium buyers.
By determining your position in the market, the other decisions become clearer.
Best regards,
Hall T.
Monday, July 26, 2010
The Business Model – The Nine Models for Making Money
After you validate the market, the next step in the process of starting a company is to identify the business model. The business model in short answers the question: how do you make money? The following site outlines the nine business models:
Brokerage Model—bringing buyers/sellers together.
Advertising Model—promoting products/services to an audience
Infomediary Model—gathering information about an audience and monetizing it
Merchant Model—selling goods/service either wholesale or retail
Manufacturer (Direct) Model – selling goods/services directly to the user without an intermediary
Affiliate Model – providing purchase opportunities wherever people may be
Community Model – selling ancillary products/services in a community
Subscription Model – charging for ongoing usage of a product/service
Utility Model – charging based on how much of a product/service is used.
In today’s web-based world, it’s common to use two or more of these models in the same business. Before fund raising, it’s important to identify the business model. The business doesn’t have to generate a great deal of revenue but it needs to have a clearly defined business model that is scalable.
Best regards,
Hall T.
Wednesday, July 21, 2010
Market Validation—the Five Steps to Identifying Market Validation and the One Criteria that Counts
Angel investors look for market validation in a startup before investing. Fundamentally, it means the entrepreneur has found a market with a need. Here are the five steps to validate a market segment and the one key criteria that provides the acid test indicating you have found one.
1. Identify the target market—write out a specific definition of your target market segment and how it fits in the overall market. Set up a list of objectives you want to learn from the research.
2. Build the Question Set—in a web/email survey ask no more than five questions. In an interview, ten questions form the basis of a good interview. Match each question to your objectives.
3. Test the question Set—send the question set to five friends and ask them to fill it out and then give you feedback on the wording. You can also check their responses to see if it addresses your question. Rollup the responses and see if the results answer your objectives.
4. Conduct the interviews/surveys – in an email survey you will receive most of the responses you’re going to get in about 2 to 3 days. After that the responses drop off dramatically. In the survey you may want to ask if you can contact them for further questioning. This may give you additional contacts to interviews.
5. Analyze the data—review the raw data yourself. It’s surprising how often the same set of data can generate completely different results from different reviewers.
While surveys and interviews can help validate the market, the one criteria that counts more than anything else is will the customer buy the product/service. Generating revenue even at a small scale says a great deal about your market’s need for the product. This is important because when angels review deals, one of the first questions that come up is “Do they have revenue?” If the answer is “yes” then you’re in the “to be considered” category.
Best regards,
Hall T.
Friday, July 16, 2010
Are you an Expert in Your Market?—Three Ways to Know Your Market Better
One of the key criteria in funding startups is the entrepreneur’s knowledge of the target market and customer. Size of market, growth rates, and segmentation are key components the entrepreneur should know well. In this post we’ll look at three ways to know your market better.
The first place to look is on the web. The Virtualpet website offers a one-stop shop to find out more details about your market segment. You’ll need to first identify which industry(s) you’re in. From that you can find out several facts about your target market size.
The next step is to find out what trade associations and conferences are related to it. You can contact the trade association and find out more about the market. Usually, the director of the association has the key market information you’re seeking and will make that available to you in an email or phone call. Their job is to foster the growth of their industry segment by informing others about it.
The third step is to attend a trade conference. You’ll learn more from those on the exhibit hall floor than you can from articles or other means. It’s worth a day walking the show to get the details.
Finally, avoid market research reports. These reports cost anywhere from $2000 to $25000. Most of these are simply a compilation from a direct mail campaign that is far from comprehensive. While they can be helpful they certainly aren’t worth the money.
Best regards,
Hall T.
Friday, June 25, 2010
Josh Rabinowitz of Articulate Labs talks his Startup
Josh Rabinowitz of Articulate Labs talks his Startup
Where are you from originally?
I'm originally from the Metro Detroit area – Farmington Hills. Go Hawks.
What university did you go to?
I'm a proud Spartan alum from Michigan State University. Like many other college graduates of my generation, though, I'm not doing anything related to my degree in Political Theory & Constitutional Democracy.
What brought you to Austin?
My partner and co-founder, Herbie Kirn, moved to Austin from the Detroit area when his first start-up needed to have access to silcon design engineers. The choices were Austin and San Jose, and Austin looked more enjoyable. I followed shortly thereafter and began working in the political realm, then later in non-profits.
What is the idea behind your startup?
The driving force behind Articulate Labs is to integrate tried-and-true solutions from a variety of engineering fields into health-focused medical devices and technology to fulfill unmet medical needs. Our first invention to go to market is StimBrace, an adaptive, motion-sensitive muscle stimulator that may reduce pain-induced muscle inhibition in osteoarthritic knees. Here, Herbie has taken the current functional electrical stimulator and added modern digital signal processing ability and adaptive real-time algorithms from engine control to create a self-customizing, effective knee care solution.
What need does it fulfill?
StimBrace handles an unmet need for practical, non-medicinal osteoarthritic knee treatment, a need that is going to grow as the number afflicted increases to approximately 35 million in 2030. This population needs something that can compliment and compensate for current treatment options that have limited duration, poor efficacy, and/or potential drawbacks. For instance, a StimBrace user could cut back on their use of certain anti-inflammatory medications, reducing both financial expense (~$275/yr.) and risk of side effects ranging from dizziness up to gastrointestinal bleeding. The latter point is a huge issue – in 2008, over 100,000 were hospitalized for anti-inflammatory-related internal bleeding, of which over 16,000 died.
We believe StimBrace may also help postpone knee replacements. Over 700,000 knee replacements occur each year, 90% of which were related to osteoarthritis. However, many who develop knee osteoarthritis are too young to have a knee replacement. Someone who has their knee replaced at 55 will likely need another replacement at 70, if not earlier. If you can put off a knee replacement, then you've sidestepped the risks inherent with surgery at an advanced age, saved over $20,000 in the surgery alone, and potentially skipped weeks of rehabilitation and inaction.
What exactly does your product do?
Herbie has been using muscle stimulation for osteoarthritic knee rehabilitation, a direct result of a motorcycle accident six years ago in which he lost his right foot. As it turns out, studies show that quadriceps strengthening is the best prognostic indicator for knee osteoarthritis – the stronger the quadriceps muscles are, the greater the load they can distribute away from the degraded weight-bearing surfaces of the knee. If you can reduce that pressure, you can reduce the painful mechanical grinding within an osteoarthritic knee.
However, current e-stim units are only designed for use in a clinical setting, not for use while ambulant. Using his background experience as a systems design engineer, Herbie created hardware and real-time operating software that can adapt to unique motions and activities of each user. To this, he added a simple single-button user interface which prompts StimBrace to remember painful conditions. Thereafter, when StimBrace's motion sensors detects these conditions, it contracts the patient's musclature to offload the joint. The patient, rather than a pre-programmed gait sequence, determines when StimBrace becomes active and what painful motions should be precluded in the future. Now we want to help the 13.5 million people with knee osteoarthritis in the country to enjoy similar benefits.
Who is it for?
Right now, we see this device benefiting people who need non-medicinal knee osteoarthritis relief and are too young to get a knee replacement. Specifically, we're looking at people aged 55+ who need knee pain relief to stay mentally, physically, and professionally active. We're still evaluating the market to determine whether direct end user sales or physicians' prescriptions would be more attractive.
It is going to take a couple years to handle everything related to FDA approval and insurance reimbursement, so we're also looking at different populations that we could assist in the meantime. One option includes muscle rehabilitation and retraining for high-level athletes. Consider someone like Lamar Odom, the Lakers' forward who suffered a torn meniscus during NBA playoffs. If we could help someone like him with pain relief, to speed rehab by even as much as a week, it could be worth hundreds of thousands to him and to the team. (Not that they needed the help this time around)
What was the most challenging aspect of starting up a business?
It's been difficult to change my work approach from focusing on short-term problems to planning ahead and prioritizing projects over the next 18 months. With every action, I need to ask myself how this leads toward our larger goals or if this just keeps me busy. Staying busy doesn't move you forward by default, and it can actually disguise critical tasks that you are ignoring.
It's also been surprisingly difficult to work from home offices and to turn places where I would relax into places where I put my nose to the grindstone. It's good now, but it took a long time for me to figure out how to carve out time and physical space for both actions.
What is the next step for you and your startup?
Biggest priorities for this summer include completing our medical advisory board and putting in a SBIR grant proposal with the National Institute of Health to support some physician-directed trials.
We also need to track down someone who would be willing to serve as our CEO or BizDev VP. We need someone more experienced with fundraising and marketing. We have an excellent base of market and technical research as well as a relatively developed product, but need to complete a team to really get this company off the ground.
What advice do you have for entrepreneurs?
Every person you meet does something better than you and is worth learning from. Even if you feel that someone's interests or skill-set are unrelated to your work, listen and understand anyways. You never know when what you learn becomes useful in another conversation, or when someone you speak with turns out to be someone who can help you down the line. You can't pull this off, though, if you're not genuine in your interest and if you're not humble enough to acknowledge the lesson's value.
What Austin-based resource have you found to be the most helpful and why?
The friendly and helpful nature of Austinites has been extremely beneficial to us. It's not a place where people look at you and say, “If you're not helping me right now, what good are you?” It's a place where we can ask questions, take people out for coffee, network, and generally gather the knowledge we need because people are forthcoming and willing to take that time. It's also a place where we can offer our help to others in turn with no reservations. . I love this town and hope that spirit never changes.
Where are you from originally?
I'm originally from the Metro Detroit area – Farmington Hills. Go Hawks.
What university did you go to?
I'm a proud Spartan alum from Michigan State University. Like many other college graduates of my generation, though, I'm not doing anything related to my degree in Political Theory & Constitutional Democracy.
What brought you to Austin?
My partner and co-founder, Herbie Kirn, moved to Austin from the Detroit area when his first start-up needed to have access to silcon design engineers. The choices were Austin and San Jose, and Austin looked more enjoyable. I followed shortly thereafter and began working in the political realm, then later in non-profits.
What is the idea behind your startup?
The driving force behind Articulate Labs is to integrate tried-and-true solutions from a variety of engineering fields into health-focused medical devices and technology to fulfill unmet medical needs. Our first invention to go to market is StimBrace, an adaptive, motion-sensitive muscle stimulator that may reduce pain-induced muscle inhibition in osteoarthritic knees. Here, Herbie has taken the current functional electrical stimulator and added modern digital signal processing ability and adaptive real-time algorithms from engine control to create a self-customizing, effective knee care solution.
What need does it fulfill?
StimBrace handles an unmet need for practical, non-medicinal osteoarthritic knee treatment, a need that is going to grow as the number afflicted increases to approximately 35 million in 2030. This population needs something that can compliment and compensate for current treatment options that have limited duration, poor efficacy, and/or potential drawbacks. For instance, a StimBrace user could cut back on their use of certain anti-inflammatory medications, reducing both financial expense (~$275/yr.) and risk of side effects ranging from dizziness up to gastrointestinal bleeding. The latter point is a huge issue – in 2008, over 100,000 were hospitalized for anti-inflammatory-related internal bleeding, of which over 16,000 died.
We believe StimBrace may also help postpone knee replacements. Over 700,000 knee replacements occur each year, 90% of which were related to osteoarthritis. However, many who develop knee osteoarthritis are too young to have a knee replacement. Someone who has their knee replaced at 55 will likely need another replacement at 70, if not earlier. If you can put off a knee replacement, then you've sidestepped the risks inherent with surgery at an advanced age, saved over $20,000 in the surgery alone, and potentially skipped weeks of rehabilitation and inaction.
What exactly does your product do?
Herbie has been using muscle stimulation for osteoarthritic knee rehabilitation, a direct result of a motorcycle accident six years ago in which he lost his right foot. As it turns out, studies show that quadriceps strengthening is the best prognostic indicator for knee osteoarthritis – the stronger the quadriceps muscles are, the greater the load they can distribute away from the degraded weight-bearing surfaces of the knee. If you can reduce that pressure, you can reduce the painful mechanical grinding within an osteoarthritic knee.
However, current e-stim units are only designed for use in a clinical setting, not for use while ambulant. Using his background experience as a systems design engineer, Herbie created hardware and real-time operating software that can adapt to unique motions and activities of each user. To this, he added a simple single-button user interface which prompts StimBrace to remember painful conditions. Thereafter, when StimBrace's motion sensors detects these conditions, it contracts the patient's musclature to offload the joint. The patient, rather than a pre-programmed gait sequence, determines when StimBrace becomes active and what painful motions should be precluded in the future. Now we want to help the 13.5 million people with knee osteoarthritis in the country to enjoy similar benefits.
Who is it for?
Right now, we see this device benefiting people who need non-medicinal knee osteoarthritis relief and are too young to get a knee replacement. Specifically, we're looking at people aged 55+ who need knee pain relief to stay mentally, physically, and professionally active. We're still evaluating the market to determine whether direct end user sales or physicians' prescriptions would be more attractive.
It is going to take a couple years to handle everything related to FDA approval and insurance reimbursement, so we're also looking at different populations that we could assist in the meantime. One option includes muscle rehabilitation and retraining for high-level athletes. Consider someone like Lamar Odom, the Lakers' forward who suffered a torn meniscus during NBA playoffs. If we could help someone like him with pain relief, to speed rehab by even as much as a week, it could be worth hundreds of thousands to him and to the team. (Not that they needed the help this time around)
What was the most challenging aspect of starting up a business?
It's been difficult to change my work approach from focusing on short-term problems to planning ahead and prioritizing projects over the next 18 months. With every action, I need to ask myself how this leads toward our larger goals or if this just keeps me busy. Staying busy doesn't move you forward by default, and it can actually disguise critical tasks that you are ignoring.
It's also been surprisingly difficult to work from home offices and to turn places where I would relax into places where I put my nose to the grindstone. It's good now, but it took a long time for me to figure out how to carve out time and physical space for both actions.
What is the next step for you and your startup?
Biggest priorities for this summer include completing our medical advisory board and putting in a SBIR grant proposal with the National Institute of Health to support some physician-directed trials.
We also need to track down someone who would be willing to serve as our CEO or BizDev VP. We need someone more experienced with fundraising and marketing. We have an excellent base of market and technical research as well as a relatively developed product, but need to complete a team to really get this company off the ground.
What advice do you have for entrepreneurs?
Every person you meet does something better than you and is worth learning from. Even if you feel that someone's interests or skill-set are unrelated to your work, listen and understand anyways. You never know when what you learn becomes useful in another conversation, or when someone you speak with turns out to be someone who can help you down the line. You can't pull this off, though, if you're not genuine in your interest and if you're not humble enough to acknowledge the lesson's value.
What Austin-based resource have you found to be the most helpful and why?
The friendly and helpful nature of Austinites has been extremely beneficial to us. It's not a place where people look at you and say, “If you're not helping me right now, what good are you?” It's a place where we can ask questions, take people out for coffee, network, and generally gather the knowledge we need because people are forthcoming and willing to take that time. It's also a place where we can offer our help to others in turn with no reservations. . I love this town and hope that spirit never changes.
Wednesday, June 23, 2010
Richard McKinnon of Less Networks Talks about His Company
Richard McKinnon of Less Networks Talks about His Company
Where are you from originally?
I was born in the Philippines and grew up in the Bay Area after brief stints in New Jersey and Phoenix.
What university did you go to?
I took a tour of colleges beginning by flunking out of the University of New Mexico because I was having just too much fun. Then, I tried my hand at aviation at Alameda Community College. When I realized that flying an airliner was more boring than glamorous, I dropped out of that too. I was 18 and in search of a life. Next, I remediated my bruised transcripts at Chabot Community College studying Criminal Justice. It seems I had a knack for law enforcement as I finished at the top of my class. I transferred to San Jose State University in Public Administration where I was exposed to Political Science, which I loved. It was there that I was introduced to the high-tech eco-system in Silicon Valley and became involved with an actual garage start-up that would eventually IPO.
What brought you to Austin?
After receiving my MA in Political Science, I came to UT for a PhD in Political Theory. Although I still love political theory, I didn't enjoy the PhD experience in UT's Government Department. After several years of trying to make it work, I eventually dropped out. It seems my academic career went full circle! The best thing about the horrible experience at UT is that it introduced me to a really great town filled with kind and interesting people. So, like so many others, I stayed. It was difficult at first to transition from academia back to the working world, but I eventually found my place in Austin's high-tech scene. It was around this time that that Silicon Valley company IPO'd and I gained the freedom to quit my job and start my own company.
What is the idea behind your startup?
We originally started as a free wi-fi company to help small, independent businesses compete with Tmobile's for-pay wi-fi in Starbucks. Nowadays, we help these businesses make sure that their customers are aware of and engaged with the business' Facebook, Twitter, and email marketing newsletter. It's pretty obvious when you think about it. Why put up a sign in your restaurant that says "Follow us on Facebook and Twitter" when you can automatically take your customers to those pages when they get on the WiFi system. We've evolved to the point that we don't even require WiFi for the solution. If a consumer wants to use their iPhone's 4G connection, then we can fall back to in-store signage that directs them to a web page and a chance to win free food for them and their Facebook friends in exchange for an email address. Just last week, Starbucks announced that their wifi is going to become free, so now our raison d ^ etre is gone. Good thing we've continued to evolve from "free wifi solutions" to "wifi-free solutions"!
What need does it fulfill?
We're focusing primarily on the food industry--cafe's, restaurants, and bars. These folks totally understand the value of word-of-marketing and many have begun playing with Facebook and Twitter. Some have gone so far as to develop a custom iPhone app. The problem is that all of these tools take time and money, yet they have no clear path to making sure that their customers even know that these investments exist!
Recently, I attended a social media summit in Hollywood and they had high-ranking marketing guys from Mazda and Kodak as keynote speakers talking about how they were able to persuade their organizations to invest in social media. They discussed the cultural change that was necessary as well as the resources needed. But you know, at the end of the day, these huge companies are still suffering from the same problem that my much smaller customers have--obscurity. I turned to my table mates at the summit and asked how many of them had ever been to either Kodak's or Mazda's Facebook page? No one. I also asked if they even knew they existed or ever thought to look. Again, no one.. So if a company with a Fortune 500 marketing budget is having trouble making people aware of and engaged with their social media investments, what's a small restaurant or coffee shop supposed to do? That's how Less Networks can help. Put simply, we put your Facebook page in front of your customers' face.
What exactly does your product do?
When we're integrated into a business's WiFi system, we automatically take people using the Internet right to the the business' marketing assets. We can do this because we control the router. Sometimes we take them to their Facebook page where they can click the button to become a Fan. Other times we take them to the business' Twitter profile where they can become a Follower. This is much more effective than putting up a sign that says "Follow us on Facebook" and hoping that the people will see it, remember it later, and then actually do it--assuming that they even know how to find the business on Facebook. In addition to increasing the visibility of social media assets, we also build-in automatic engagement by prompting the consumers to share their location and experience with their Facebook friends. If they do this, then their picture, the business' logo, promotional link, and text is posted on the consumer's wall for 130 Facebook friends to see. That something a simple sign can't do! Since we also have the email addresses of everyone using the WiFi system, we can help integrate the consumers into the business' opt-in email marketing program such as Fishbowl and Constant Contact. Finally, we make sure that the WiFi works so that the business doesn't need to worry about it.
All of this marketing activity depends on a working WiFi system, so reliable WiFi is a bedrock benefit that we provide. I mentioned earlier that we now have a "wifi-free solution" for smart phones. Unfortunately, this does depend on in-store signage, but you can't force someone to use wifi on their iPhone if they don't want to. As a result, we've had to come up with a user experience for 3G/4G consumers. Basically, they see a sign that says something like "Win a free burger for you and your friends at some easy URL.com" Then they go there on their smart phone and it prompts them for their email address and to click to see if they win. They're told instantly whether they're a winner and that the coupon was sent to their email address. The email they receive later also contains a link to share the contest with their Facebook friends. Of course, the hope is that the promotion will spread to the consumer's friends all the while collecting email addresses, raising the business visibility, providing entertainment, and awarding free hamburgers.
Who is it for?
We believe our solution is a good fit for any retail business trying to make their customers aware of their social media, but we're focusing on the Texas food industry until we have the resources to branch out systematically.
What was the most challenging aspect of starting up a business?
Starting up was easy, keeping it going is hard. I've learned that raw intelligence is not enough to succeed and an instinct for making money is crucial. I've noticed that some of my smartest friends have created the most convoluted companies and methods for earning a living. I suspect that's because more straight-forward approaches are boring or below them. It's almost like they're too smart to make money because the businesses are based on technologies they've created to amuse themselves. I've been guilty of that. Working with my restaurant industry customers, I've acquired a great deal of respect for the straight-forward "simple" business models that don't involve much high-tech or brainy convolution---you make a product or provide a service that people want and you sell it to them, then repeat.
I remember the first time I learned that Dairy Queen stores compete on how quickly they can make their first million in annual revenues and then go up the ladder from there. It was humbling. A million bucks is a million bucks and my fancy WiFi company was a long ways from there. Maybe I should be selling Blizzards instead. At the very least, I've finally learned to focus on the money and not the gee-whiz technology and coolness factor. The question I always ask myself now is, "Would a customer want to buy this?" as opposed to "Wouldn't it be cool if we made this?" I hope that this dose of pragmatism doesn't prevent me from inventing the next Twitter some day, because an idea like Twitter definitely wouldn't pass my new litmus test for a business. That's sad, I guess. Maybe after I get out of the trenches, I'll get all starry-eyed again.
What is the next step for you and your startup?
We're in the process beefing up our advisory board with telco and food industry execs to more effectively court multi-unit franchise and national retail customers as well as prepare ourselves for partnering, licensing, and acquisition opportunities with broadband infrastructure providers such as such as phone and cable companies. Already, we've had several exciting conversations along these lines, but who knows, maybe our exit will be to another kind of buyer like a Chinese social networking company or a newspaper company looking for a new way to distribute their content.
What advice do you have for entrepreneurs?
Specifically to Austin high-tech entrepreneurs, get on a plane and fly to SF/Silicon Valley every month. Sure, we live in a great city with a great quality of life, but we're working at a tremendous disadvantage. It's like being a "mid-major" college football team. Even if you've got a great product, you're playing in a weak conference. I hate to say it, but I've learned that it's true. In SF/Silicon Valley, Austin just doesn't even register in the high-tech scene. We're in the backwater out here. The only Austin company they can think of is Dell. Telling them you have a company in Austin does not impress them, it makes them question your credibility. That's pretty infuriating because so many bad business ideas get attention and funding out there simply because they're out there. So, take some of the money you're saving on rent and mortgage, and spend it on a $300 plane trip to the Bay Area every month and start networking over there. Don't even tell them you're from Austin. Say your development team is in Austin, if you have to. Create a virtual office over there and have a California business card. Think of it as a standard business expense for all Austin high-tech companies of any size. Our biggest biz dev lead for 2009 came out of this strategy and it would have never happened otherwise. Then, come home, put on your shorts and sandals, pop open a Shiner, have some chips and salsa and be grateful that you don't have to live in the Bay everyday. This is a great place to live in, but not build a high-tech company. That's not something that many people here want to hear and I'm a bigger booster than most.
There are a lot of things that would have to change like the whole attitude of the entire local investment community from angels to VCs. But even then, we're simply lacking the critical mass of nearly everybody you need to meet and partner with to succeed is over there. It's crucial to be a part of the conversation, so that someone who can make a difference becomes aware of you. It's very similar to LA and actors. Anyway, once you get over the sting of this reality, let me know and I'll help you meet and network with the Austin diaspora that regularly travels to CA. We trade Bay Area tips and advice, talk about Austin, and even share living and working spaces while we're out there. It makes traveling so much easier and more fun when you keep a foot in your home community.
What Austin-based resource have you found to be the most helpful and why?
I benefit greatly from the advice and mentoring from the Austin Technology Incubator as well as the email list from Bootstrap-Austin. But perhaps the most helpful resource is the collective experience and talent of my Austin-based team members. It's tempting to "ask the experts," and it's awfully easy to overlook the in-house expertise you already have. We've built an award-winning venture together and I'm looking forward to finally solving the puzzle for making money with free WiFi.
Best regards,
Hall T.
Where are you from originally?
I was born in the Philippines and grew up in the Bay Area after brief stints in New Jersey and Phoenix.
What university did you go to?
I took a tour of colleges beginning by flunking out of the University of New Mexico because I was having just too much fun. Then, I tried my hand at aviation at Alameda Community College. When I realized that flying an airliner was more boring than glamorous, I dropped out of that too. I was 18 and in search of a life. Next, I remediated my bruised transcripts at Chabot Community College studying Criminal Justice. It seems I had a knack for law enforcement as I finished at the top of my class. I transferred to San Jose State University in Public Administration where I was exposed to Political Science, which I loved. It was there that I was introduced to the high-tech eco-system in Silicon Valley and became involved with an actual garage start-up that would eventually IPO.
What brought you to Austin?
After receiving my MA in Political Science, I came to UT for a PhD in Political Theory. Although I still love political theory, I didn't enjoy the PhD experience in UT's Government Department. After several years of trying to make it work, I eventually dropped out. It seems my academic career went full circle! The best thing about the horrible experience at UT is that it introduced me to a really great town filled with kind and interesting people. So, like so many others, I stayed. It was difficult at first to transition from academia back to the working world, but I eventually found my place in Austin's high-tech scene. It was around this time that that Silicon Valley company IPO'd and I gained the freedom to quit my job and start my own company.
What is the idea behind your startup?
We originally started as a free wi-fi company to help small, independent businesses compete with Tmobile's for-pay wi-fi in Starbucks. Nowadays, we help these businesses make sure that their customers are aware of and engaged with the business' Facebook, Twitter, and email marketing newsletter. It's pretty obvious when you think about it. Why put up a sign in your restaurant that says "Follow us on Facebook and Twitter" when you can automatically take your customers to those pages when they get on the WiFi system. We've evolved to the point that we don't even require WiFi for the solution. If a consumer wants to use their iPhone's 4G connection, then we can fall back to in-store signage that directs them to a web page and a chance to win free food for them and their Facebook friends in exchange for an email address. Just last week, Starbucks announced that their wifi is going to become free, so now our raison d ^ etre is gone. Good thing we've continued to evolve from "free wifi solutions" to "wifi-free solutions"!
What need does it fulfill?
We're focusing primarily on the food industry--cafe's, restaurants, and bars. These folks totally understand the value of word-of-marketing and many have begun playing with Facebook and Twitter. Some have gone so far as to develop a custom iPhone app. The problem is that all of these tools take time and money, yet they have no clear path to making sure that their customers even know that these investments exist!
Recently, I attended a social media summit in Hollywood and they had high-ranking marketing guys from Mazda and Kodak as keynote speakers talking about how they were able to persuade their organizations to invest in social media. They discussed the cultural change that was necessary as well as the resources needed. But you know, at the end of the day, these huge companies are still suffering from the same problem that my much smaller customers have--obscurity. I turned to my table mates at the summit and asked how many of them had ever been to either Kodak's or Mazda's Facebook page? No one. I also asked if they even knew they existed or ever thought to look. Again, no one.. So if a company with a Fortune 500 marketing budget is having trouble making people aware of and engaged with their social media investments, what's a small restaurant or coffee shop supposed to do? That's how Less Networks can help. Put simply, we put your Facebook page in front of your customers' face.
What exactly does your product do?
When we're integrated into a business's WiFi system, we automatically take people using the Internet right to the the business' marketing assets. We can do this because we control the router. Sometimes we take them to their Facebook page where they can click the button to become a Fan. Other times we take them to the business' Twitter profile where they can become a Follower. This is much more effective than putting up a sign that says "Follow us on Facebook" and hoping that the people will see it, remember it later, and then actually do it--assuming that they even know how to find the business on Facebook. In addition to increasing the visibility of social media assets, we also build-in automatic engagement by prompting the consumers to share their location and experience with their Facebook friends. If they do this, then their picture, the business' logo, promotional link, and text is posted on the consumer's wall for 130 Facebook friends to see. That something a simple sign can't do! Since we also have the email addresses of everyone using the WiFi system, we can help integrate the consumers into the business' opt-in email marketing program such as Fishbowl and Constant Contact. Finally, we make sure that the WiFi works so that the business doesn't need to worry about it.
All of this marketing activity depends on a working WiFi system, so reliable WiFi is a bedrock benefit that we provide. I mentioned earlier that we now have a "wifi-free solution" for smart phones. Unfortunately, this does depend on in-store signage, but you can't force someone to use wifi on their iPhone if they don't want to. As a result, we've had to come up with a user experience for 3G/4G consumers. Basically, they see a sign that says something like "Win a free burger for you and your friends at some easy URL.com" Then they go there on their smart phone and it prompts them for their email address and to click to see if they win. They're told instantly whether they're a winner and that the coupon was sent to their email address. The email they receive later also contains a link to share the contest with their Facebook friends. Of course, the hope is that the promotion will spread to the consumer's friends all the while collecting email addresses, raising the business visibility, providing entertainment, and awarding free hamburgers.
Who is it for?
We believe our solution is a good fit for any retail business trying to make their customers aware of their social media, but we're focusing on the Texas food industry until we have the resources to branch out systematically.
What was the most challenging aspect of starting up a business?
Starting up was easy, keeping it going is hard. I've learned that raw intelligence is not enough to succeed and an instinct for making money is crucial. I've noticed that some of my smartest friends have created the most convoluted companies and methods for earning a living. I suspect that's because more straight-forward approaches are boring or below them. It's almost like they're too smart to make money because the businesses are based on technologies they've created to amuse themselves. I've been guilty of that. Working with my restaurant industry customers, I've acquired a great deal of respect for the straight-forward "simple" business models that don't involve much high-tech or brainy convolution---you make a product or provide a service that people want and you sell it to them, then repeat.
I remember the first time I learned that Dairy Queen stores compete on how quickly they can make their first million in annual revenues and then go up the ladder from there. It was humbling. A million bucks is a million bucks and my fancy WiFi company was a long ways from there. Maybe I should be selling Blizzards instead. At the very least, I've finally learned to focus on the money and not the gee-whiz technology and coolness factor. The question I always ask myself now is, "Would a customer want to buy this?" as opposed to "Wouldn't it be cool if we made this?" I hope that this dose of pragmatism doesn't prevent me from inventing the next Twitter some day, because an idea like Twitter definitely wouldn't pass my new litmus test for a business. That's sad, I guess. Maybe after I get out of the trenches, I'll get all starry-eyed again.
What is the next step for you and your startup?
We're in the process beefing up our advisory board with telco and food industry execs to more effectively court multi-unit franchise and national retail customers as well as prepare ourselves for partnering, licensing, and acquisition opportunities with broadband infrastructure providers such as such as phone and cable companies. Already, we've had several exciting conversations along these lines, but who knows, maybe our exit will be to another kind of buyer like a Chinese social networking company or a newspaper company looking for a new way to distribute their content.
What advice do you have for entrepreneurs?
Specifically to Austin high-tech entrepreneurs, get on a plane and fly to SF/Silicon Valley every month. Sure, we live in a great city with a great quality of life, but we're working at a tremendous disadvantage. It's like being a "mid-major" college football team. Even if you've got a great product, you're playing in a weak conference. I hate to say it, but I've learned that it's true. In SF/Silicon Valley, Austin just doesn't even register in the high-tech scene. We're in the backwater out here. The only Austin company they can think of is Dell. Telling them you have a company in Austin does not impress them, it makes them question your credibility. That's pretty infuriating because so many bad business ideas get attention and funding out there simply because they're out there. So, take some of the money you're saving on rent and mortgage, and spend it on a $300 plane trip to the Bay Area every month and start networking over there. Don't even tell them you're from Austin. Say your development team is in Austin, if you have to. Create a virtual office over there and have a California business card. Think of it as a standard business expense for all Austin high-tech companies of any size. Our biggest biz dev lead for 2009 came out of this strategy and it would have never happened otherwise. Then, come home, put on your shorts and sandals, pop open a Shiner, have some chips and salsa and be grateful that you don't have to live in the Bay everyday. This is a great place to live in, but not build a high-tech company. That's not something that many people here want to hear and I'm a bigger booster than most.
There are a lot of things that would have to change like the whole attitude of the entire local investment community from angels to VCs. But even then, we're simply lacking the critical mass of nearly everybody you need to meet and partner with to succeed is over there. It's crucial to be a part of the conversation, so that someone who can make a difference becomes aware of you. It's very similar to LA and actors. Anyway, once you get over the sting of this reality, let me know and I'll help you meet and network with the Austin diaspora that regularly travels to CA. We trade Bay Area tips and advice, talk about Austin, and even share living and working spaces while we're out there. It makes traveling so much easier and more fun when you keep a foot in your home community.
What Austin-based resource have you found to be the most helpful and why?
I benefit greatly from the advice and mentoring from the Austin Technology Incubator as well as the email list from Bootstrap-Austin. But perhaps the most helpful resource is the collective experience and talent of my Austin-based team members. It's tempting to "ask the experts," and it's awfully easy to overlook the in-house expertise you already have. We've built an award-winning venture together and I'm looking forward to finally solving the puzzle for making money with free WiFi.
Best regards,
Hall T.
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