Experts share advice for Wisconsin entrepreneur programs

Some of the people who helped North Carolina and Los Angeles become havens for entrepreneurs and host to surprisingly public communities of angel investors shared their most effective practices Tuesday at the Entrepreneurs’ Conference in Milwaukee http://www.wisconsintechnologycouncil.com/win_foundation/events_programs/entrepeneur.php .

Jason Stitt

http://www.wistechnology.com/article.php?id=881

Their techniques included educational programs—but you have to be careful with that word, said Monica Doss, president of the Council for Entrepreneurial Development http://www.cednc.org , based in North Carolina’s Research Triangle Park. Entrepreneurs and investors alike may think they know all they need to and are beyond basic educational programs.

Instead, she called what CED does “building know-how.” The center eventually tries to give entrepreneurs the knowledge they need, but it must draw them in by offering something they want.

Mentoring New Businesses

One thing entrepreneurs look for, Doss said, is practical advice on breaking into certain markets or approaching investment groups. And through programs targeted at those desires, the center can teach people about business plans and the foundational skills they need for their businesses.

CED’s approach involves hands-on mentoring from experienced entrepreneurs, said Adam Smith, the center’s entrepreneurial programs director. The center provides a series of workshops, conferences, and ad-hoc training programs, which are aimed at linking budding entrepreneurs with experienced mentors and their networks.

“Those canned business-plan CDs that ask you questions and you answer them … they’re pretty worthless,” said Alan Oelschlaeger of business guidance firm Telaric Alliance. “Just a bunch of facts and data.”

A more effective approach is to tell a story, he said. That story, if compelling, can obtain money from venture or angel investors more readily than the basic facts and figures placed in a template.

A mentor could help.

Showing it All

To vet business plans before they have to weather actual investors’ critiques, CED runs a program it calls Streak, which provides entrepreneurs with critiques as they develop proposals.

“Starting a new business is like streaking,” Smith explained. “Everybody sees everything you have.”

Entrepreneurs are not the only group CED encouraged to show themselves. Angel investors, who often take on mentorship roles as well as funding companies, were reclusive in North Carolina before CED had its way with them, Doss said. Perhaps it was because they were afraid their phones would ring all night long if people knew they had money to invest. But when CED publications wanted to start featuring angel investors in stories about the companies they had helped, Doss said, they were willing.

The resulting publicity created a community of angel investors that mirrors the entrepreneurial community, she said, and which has banded together to form small syndicates. Thus safety in numbers, rather than secrecy, protects investors from odd-hours calls.

Entrepreneurial Culture

When CED launched in 1984, the Raleigh Chamber of Commerce was uninterested, Doss said. The chamber wanted to bring in established companies, mostly ignoring the upstart effort to bring an entrepreneurial culture to the Research Triangle. Now, the people who made that decision may wonder why: in North Carolina, entrepreneurs have become mainstream.

But the entrepreneurial culture does not spring to life in the same way everywhere.

Victor W. Hwang, president of the Larta Institute in Los Angeles, flew out to the conference to share his experiences bringing entrepreneurial efforts to market. Even though Larta is a non-profit organization, it refers to the companies it helps as clients. Those clients include thousands of businesspeople each year—only a fraction of the immense business community in California, the one state in the union that can claim to be an economic power on its own.

“You can drive from Santa Barbara down to San Diego without ever leaving civilization,” Hwang said.

Larta was chartered in 1993 in response to a fiscal crisis—which California seems to have once a decade, Hwang joked. The institute is now involved in capital raising and education, with Larta University teaching a mini-MBA course.

Hwang said people who want to develop technical enterprises who don’t have much business experience need that education. Otherwise, they will fall in with the chaff of ill-planned businesses.

“In Southern California, there’s probably not a month that goes by without someone trying to start their own tech organization,” he said.

Larta, too, helps its clients network, but sometimes with difficulty. Ego and the desire to have a personal niche can get in the way of people working together. Hwang said the holistic approach CED takes in North Carolina impresses him. “It’s very special,” he said. “That doesn’t happen in Southern California, I assure you.”

And Larta does not deal only with California groups. Los Angeles being a major port and a hub of international activity, conferences there can attract consul-generals from countries ranging from Japan to Switzerland, Hwang said. The region no longer has a definite ethnic majority, making it at once a place ideally suited for international networking and full of different ways of doing business.

Measuring success in an entrepreneurial environment is not always easy. Hwang said Larta looks at the amount of venture capital raised and tries to track the companies it helps, but the typical startup’s need for immediate returns and short-term advice can get in the way of doing that over the long term.

“The hardest part is, companies come to us and they don’t even know where to start … we’ve become a really good map and, I guess, tour guide for companies,” he said.

When Larta started out, it did not charge any fees for its referral services, which connect entrepreneurs with potential funding and other services. But that changed, Hwang said, because nobody remembered the referrals for long and gratitude soon faded.

“When you take a fee, people remember you, and they give you credit for it,” he said.

________
Jason Stitt is a staff writer for the Wisconsin Technology Network and can be reached at [email protected].

________

******************

Entrepreneurs get crash course for building a successful company

Les Chappell

http://www.wistechnology.com/article.php?id=885

The second annual Wisconsin Entrepreneur’s Conference got off to a dynamic start on Tuesday morning at the Hyatt Regency Milwaukee, treating at least a hundred entrepreneurs and industry representatives to a crash course in making a new company a success. The ‘entrepreneurial boot camp’ was designed serve both veteran and novice business owners, by providing a loose outline for success from a panel of seasoned industrialists.

“Our purpose is to focus on what we’re doing here,” said Ken Wanek, founder of the banking research company Datatrac http://www.datatrac.com/ and a member of the entrepreneurial panel at the workshop. “We’re trying to make a little noise so the other coasts know what great opportunities we have.”

John Byrnes, executive managing director of the venture capital company Mason Wells http://www.masonwells.com/’ target= reflected back on his 20 years of experience in providing funds to entrepreneurs looking to establish a company. Byrnes has seen many portfolio companies rise and fall and was more than willing to share his experience with the attendees.

Byrnes use of darkly humorous quotes illustrated the reality of being an entrepreneur, including “Life is hard, and then you die”. He stressed the fact that the road toward becoming rich through your own company is not for the easily discouraged, as no entrepreneur can expect to succeed instantly. He stressed tenacity and stubbornness as vital to success, as failure is an effective tool to developing skills.

“There is no prescription, there is not formula, there is no textbook,” Byrnes said of starting a new company. “You become an entrepreneur by trying things and failing at things and trying again and failing again…you will find the way or you will make one.”

Byrnes did not define an exact blueprint for success, but rather presented attendees with a list of “meta systems” – models for the best general strategies – and illustrated how to avoid common pitfalls. The major point emphasized was the fact that creating a system is not the ultimate solution, and there is no way to make a method failsafe unless it is able to adapt.

“You have to distinguish between the business plan and the business…the plan alone does not make it a success,” Byrnes said.

Byrnes illustrated that for a plan to succeed, it must have its goals and accomplishments defined in a way that is “sustainable and scalable”. It must be designed first and foremost to solve an existing problem, and do so in a way that guarantees a constant payment from customers. Repeat business was stressed as the key ingredient to profit, as it creates an established base for feedback and a keystone product, both of which lead to further revenue and development of new merchandise.

From a market perspective, the most important thing is to recognize the cost inherent to actions, and understand where you want to fall in the system: producing high- or low-cost products, and serving a broad or narrow customer range. Byrnes pointed out that the most successful products are those which choose one of these four combinations and stick with it, placing effort into this specialization.

Byrnes noted that high-tech companies are often most difficult to get established, as the products are often so new that customers don’t know they need it. The key point is to find the market for a product early, to aggressively hunt down the ‘early adopters’ and turn them into a majority.

“Most customers are lemmings…finding early adaptors is the challenge, and making room for the pioneers,” Byrnes said.

Finally, Byrnes emphasized the importance of ‘venture assets’ in a company, those resources such as designs and alliances which are not profit but its components. Development of these investments guide a company through its first stages, as these resources are what lead to a steady growth of capital in the long run.

“Most of building a business is common sense,” Byrnes concluded.

Following Byrnes’ speech, two panels of entrepreneurs with considerable experience spoke to the audience and shared the knowledge they had obtained through starting their own companies and working with others. The panelists shared general tips for growth, including a healthy line of communication with the customers, remaining passionate about the goals of the company, and choosing a staff which is both gifted and trustworthy.

Chief among them was again the fact that failure always haunts an entrepreneur and the trick is to take what it teaches you rather than how it harms you. “Some of my greatest opportunities were also some of my biggest failures,” said Kelly Hansen, CEO of Neohapsis and a self-proclaimed ‘serial entrepreneur’. “Other than tenacity, the greatest gift is the ability to adjust.”

Audience members were impressed by the information presented at the conference, especially with the firsthand experience the panelists possessed.

“It was interesting to get a variety of perspectives from those who are entrepreneurs and those who counseled entrepreneurs,” said Alan Goldenberg of RoleFlow http://www.roleflow.com/ , a firm which produces business management software. “It was helpful to hear a return to the ideas of passion and integrity, and keeping an eye on the customer.”