The vibrant community of Sioux Falls 1 Million Cups.

 20 years from tomorrow

Brad Feld, Venture Capitalist and author of Startup Communities, the bible for people who care about this stuff, says building a startup community is a 20-year process from tomorrow. Meaning it never ends. You’ve never made it. Feld says,

Part of Boulder’s success was in deliberately not trying to emulate Silicon Valley. The first thing any city trying to create a startup community or a vibrant entrepreneurial ecosystem should do is get rid of the idea that they’re trying to be like Silicon Valley. Silicon Valley has unique characteristics just like every city does, and every city and community should focus on their unique characteristics. They should learn from the things that have caused Silicon Valley to be such an extraordinary, entrepreneurial ecosystem. But they shouldn’t try to emulate it. Silicon Valley has been developing as a startup community for over 60-70 years. This notion that you can create something in two or five years is foolish. So, recognizing that it takes a long time, you have to go on that kind of journey.

It doesn’t matter if you’re Silicon Valley, Silicon Alley, Silicon Beach, Silicon Prairie, or Sioux Falls. Communities rise and fall, ebb and flow, grow and shrink; change is the only constant. You know what that sounds like? Entrepreneurship.

Entrepreneurs are in a constant state of change and growth. They have to be, or their companies won’t survive. So it should come as no surprise that elements that support our startup community (coworking spaces, code schools, angel funds, and startups) will come and go. But the element I believe we all need to focus on and talk about is the entrepreneurs themselves. The people.

We need to change our approach

Any good entrepreneur knows that execution > idea. Ideas are a dime a dozen. Everyone has an idea, but it is the entrepreneur who makes it a reality. I believe our current approach is backwards. Sioux Falls is taking a “build it and they will come” approach. We think if we have a coworking space, code school, and angel fund, the entrepreneurs will emerge out of the woodwork or flock to Sioux Falls. I believe if we have great entrepreneurs building great companies, those other elements will become necessities and fall into place.

Invest in our people

In May 2009, my brother Scott and I were awarded a $15,000 grant through the N2Tec program at SDTBC (which is now Zeal). There were only two conditions to receiving the funding:

1. Start a technology-based business.
2. Start it in South Dakota.

So at 23, I quit my $50,000/year consulting job in Minneapolis and moved back to South Dakota to start my company. I didn’t think I’d be back in SoDak, at least not at 23, but there I was in June of 2009 getting an apartment in downtown Sioux Falls and starting my entrepreneurial career.

My brother Scott and I on the first day of the N2Tec Accelerator program in 2009. We did not know what we didn’t know.

The irony of that N2Tec program was that Scott and I thought the $15,000 grant and office space were the big wins. We thought, hey this validates our idea and now we have a runway to start! We have a space to cowork and an investment, what else would we need?

We were way off.

The true value of that program were the connections it gave us to key people who would help us along the way. We were introduced to people who would become our first customers. We met Tim and Vonnie and the Enterprise Institute who helped us rework our go-to-market strategy. I remember Rich Naser telling me to double what we were charging. A fellow member of the program invited us to share an office with him at 8th and Railroad where we met the guys starting an up-and-coming digital agency called Click Rain.

The people, the introductions, and the mentorship were far more valuable than any grant or coworking space. And that $15,000 grant turned out to be money well-invested. Coming out of the N2Tec program, Scott and I launched 9 Clouds, which two years later spun out Lemonly, and today the two companies employ nearly 40 people. Not bad for $15k.

Back to SoDak

This weekend, the good folks at Workforce Development are holding an event called Back to SoDak, inviting former South Dakotans to come back home and see how Sioux Falls has changed and all the great things going on here. It’s a well-timed event on JazzFest weekend with hopefully beautiful weather that will really help make our city shine. And I believe it’s the right approach.

As a business owner, I’ve experienced the challenge of recruiting folks with no ties to this state to move here. It’s very difficult, but not impossible. Back to SoDak focuses on people just like me––people who grew up planning to get out of SoDak. This group of people know and love South Dakota, they just need to come witness the great community we’re building. It’s a great food community, outdoor community, entertainment community, and of course a great entrepreneurial community.

Entrepreneurs over ideas

We don’t have to wait for all the great people who have left to move back to SoDak––we already have a ton of great people here! My point: Our focus should be on the people, not the places and things for them to use. How do we build out a network of mentors to help entrepreneurs with the challenges they’re facing? How do we encourage those who’ve “made it” to give back and share not just their wins, but their losses too? How do we as an entrepreneurial community remember to celebrate our successes (through content, press, 1 Million Cups, etc.) but also celebrate our failures and encourage our peers to get back up and try again?

Investing in people, professional development, and leadership training will yield results for our startup community now and 20 years from tomorrow.

I wanted to be an example of a special company, particularly in our home of Sioux Falls, where there are fewer examples of these “new age” or Silicon Valley-type of companies. I wanted to inspire other Sioux Falls entrepreneurs and businesses to build people-first companies.

I have always been inspired by Basecamp and the company that Jason Fried and DHH have created. In fact, Rework is the first book I recommend people read when they join the Lemonly team. Last year, I bookmarked a post by Jason about employee benefits at Basecamp and was inspired to do the same this year. I couldn’t agree with Jason’s comment more…

“Everyone’s looking to know what everyone else is doing — as are we — so I figured I might as well post our current benefit list publicly.”

Lemonly benefits as of January 1,  2017

Work anywhere: People at Lemonly can work from wherever they want. We currently have remote employees in Coeur d’Alene, Idaho, and Vancouver, Canada. In the past we have had team members in Miami, Omaha, and as far away as Serbia. This benefit isn’t just for remote workers either. HQ folks in Sioux Falls can work at home, a coffee shop, or do a workation — wherever they get their work done.

Top 25% salaries: Most job postings list competitive salary––we used to do it too––but no one ever knows what that means. We’re trying to get smarter about salary and what is appropriate in our marketplace. Honestly, we still don’t have enough data and need more research, but so far we’ve found that our salaries fall in the upper 25% for our market. We try to measure our salaries off of the local market, so Sioux Falls folks in Sioux Falls and Vancouver in Vancouver, etc.

Vacations and paid holidays: Lemonly offers 3 weeks of paid vacation (15 days), 8 national holidays every year (we have a U.S. calendar as well as a Canadian calendar for our Vancouver friends), and 2 sick days for a total of 25 paid days off per year. Employees who’ve worked five years at Lemonly get to bump their PTO up to 20 vacation days. On top of this, we offer flexibility for folks who want to take extended trips (honeymoons, trips to Europe and Asia, time with family) by letting them either go into negative PTO and make it up, work extra time, or even take unpaid days.

Summer Hours: We started doing summer hours back in 2013. The concept is simple — from Memorial Day through Labor Day we shut down the office early on Fridays. We work a 2/3 day on Fridays and many folks start their summer weekends by 3 pm on Friday. Summer Hours serves two purposes:

First, it gives folks something to look forward to. When you’re grinding it out in March and April, you can be excited knowing Summer Hours are just around the corner.

Second, it gets folks outside. We live in South Dakota and have long, bitterly cold winters. The last thing we want to do during our summer months is be stuck in an office. With Summer Hours, people can hit the road and head to the lake or get outside and grill. And guess what––we see no loss in productivity. (More about Summer Hours here)

Health, dental and vision insurance: Lemonly offers a Wellmark Blue Cross/Blue Shield PPO for health insurance and will pay $200/month ($2,400 annually) toward employee health insurance. If a Lemonhead elects not to take part in the plan (or gets healthcare via a partner or family member) he or she can simply take the $2,400 as cash toward their salary. We offer dental and vision through a supplemental Principal Insurance plan, but this cost is incurred by the employee.

100% match 401k retirement plan: After one year of employment at the company, Lemonly will match 100% dollar-for-dollar (up to 3% of the employee’s salary) that Lemonheads contribute to the plan. The past two years, we’ve also done a $20,000 end-of-year profit-sharing bonus split up to those who are in the 401k plan.

Paid parental leave: 2016 was a big year for parents at Lemonly with four new Lemonhead babies being born. We adjusted our policy at the start of 2016 to accommodate for these current and future parents.

Lemonly offers four weeks of paid leave for new moms and two weeks of paid leave for new dads. We also have three current mothers in the office that work four-day weeks to allow them to have more time at home. (More about our parental leave policy)

5-year adventure bonus: In 2017, our five and a half-year-old company will have our first employee reach five years at the company. We highly value loyalty, and in accordance to one of our core values of Adventure, we have an exciting policy addition coming for five-year employees. This is still a surprise, so we’ll explain this more later on in the year.

Continuing education allowance: If folks want to take an online course, buy a book for the Lemonly library, or attend a conference, they simply need to ask. We want our employees to continue to learn and grow.

Company retreat: Lemonly will cover an all-expenses paid trip for our annual company retreat. We choose a location (away from Sioux Falls HQ) and fly the remote folks in and drive the team to a cabin, or lake, or getaway to share ideas on how to improve the company and to get to know our coworkers better.

100% coverage of hardware/software: Lemonly will cover the total cost for hardware, software, or subscriptions team members need to do their jobs. Get the right tools, do the best work.

Revenue goal distribution: We set team goals for each quarter that are shared and measured. If we beat those goals, Lemonly shares every dollar above the goal 50/50 (half back to the company to reinvest and half to the team).

Annual 3/2/1 charity donation: At the end of the year we set aside $6,000 to be donated to local charities. Each employee nominates a charity of their choice. The team votes for their favorite three, and based on those votes we make donations of $3,000, $2,000, and $1,000 to the top three.

When employees donate money to a qualified charity, Lemonly will make a matching gift to that charity on their behalf (annual matching budget of $6,000). Charities must be a registered 501c3.

Monthly lunch and learn: Each month, we bring in a local presenter, feature a Lemonly team member with an expertise, or visit a location to learn about a topic relevant to our team––ranging from mortgages and investing to making sushi and yoga basics. Lemonly provides the lunch and the time to learn. So far, so good.

Lemonly holiday gift: We try to do exciting gifts for the holiday season. This past December, we gave each employee $80 and 90 minutes to go out and spend it on themselves. Some hopped on the Internet, some hit the streets in downtown Sioux Falls, and the Vancouver crew even got together at a mall in their area. We reconvened for lunch and a great round of show and tell. We’ll see what we come up with for next year’s gift!

I decided to rewatch that video recently, a month later, to see how my perspective might have changed. It definitely did.

1. Time Heals

Watching this video a month later was a great exercise in determination for me. The rollercoaster is real. In the 32 days since I posted this video, we’ve had at least two other lows and another three or four highs. We haven’t had a low as significant as this, but the realization that so much can happen in a month reduces the pain.

Time heals that pain. I watch this video now and chuckle. How the hell did that happen? Did it actually go down that way? Looking back, I can just say “oh well” to myself and know that we’ll get ’em next time. In business and in life, you wish you could speed up the clock during the tough times, but know that in time all will be ok. Plus, you’re not an entrepreneur without a few scars, right?

2. Pick Up the Phone

After the dust settled on the loss of this contract, my biggest takeaway for next time is to pick up the phone. In this case, the potential client never shared their phone number, but I should have pushed for it. I should have picked up the phone, called the potential client, and asked questions. When you speak to someone in person or on the phone, you remove the potential for misunderstanding that a text message or email can create.

Make an effort to understand the other person’s point of view and their position in negotiation. Talk to a person on a level where you can make a real connection, ideally in person or at least on the phone. Ask questions and push for clarity and understanding. Sometimes technology can be more of a barrier than a convenience. Pick up the phone!

3. If You’re Never Losing, You’re Not Winning

I still believe that negotiating was the right move in this situation. I also still believe that Lemonly was worth the investment we requested. We were right to hold our ground on the value of our service. This client had the potential to be a great business win, but we had to win it on our terms. By holding our ground on these aspects, we lost the business. And that’s ok. We know what we stand for at Lemonly, and we’re willing to lose for it.

If you run your business by always conceding, adjusting, and relenting, are you actually running your business?

If you’re never losing, then you’re not taking enough risks. Losses and failures are part of the game. It’s how you learn. Go ahead and lose, but make sure you learn from it.

4. Remember the Moments

I always wish that I had a picture of the first office from the company I started in 2009 with my brother. We won a business grant and a 1,300 square foot office space with nothing but a card table and two chairs around it. That was our office because it was all we had, but also all we needed. Today at Lemonly we have 4,000 square feet with tons of furniture and nearly 20 people. But I still vividly remember that first 9 Clouds office in my head, and I wish I had a picture.

Recording this video served as a reminder of this low moment which has made for great motivation. I don’t want to forget this moment. I’m going to try and do a better job of remembering both the highs and the lows. The journey is the best part of being an entrepreneur.

The best is yet to come.

The key to personal and professional growth is to push yourself, stumble and fall, reflect on that experience and learn for next time. Recording that video in the airport was a moment of reflection. Writing this post is another point of reflection on how we’ve grown since that video. I can’t wait until I read this post a year from now to see what I’ve learned.

Here’s a quick recap, in case you missed it.

In case you missed it, Lemonly turned five, we wrapped up Season 1 of “Answers to Questions,” and I wrote about maternity/paternity leave and its importance in company culture.

See what you missed here and keep up on social media:
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As always, reach out with any comments or questions — Facebook, Twitter, Snapchat, Instagram, I’m there.

In case you missed it…