Kentucky Startup Blog

Comparing entrepreneurial cultures

Richard Stump — Fri, 06 Nov 2009 15:39:43 +0000

Below are some excerpts from an article on xconomy about the startup scenes in Boston, Boulder and Seattle. I highlighted the statements I thought were important to or resembled Kentucky and other areas trying build high-tech ecosystems.

Brad Feld of TechStars and Foundry Group gave a brief history of the startup scene in Boulder, CO—useful for any city with entrepreneurial aspirations. “When I showed up in ’95, what I found was on the software side you had a lot of smart engineering talent but you didn’t have much else. A handful of entrepreneurial companies in storage and cable infrastructure. Not much in the way of entrepreneurial executive leadership other than from these pockets. In the mid-90s, because of the counter-culture community—and the Internet was purpose-built for places like Boulder—you had a lot of people who were independent, very smart, doing their own things suddenly intersecting with a medium that allows you to be anywhere. It’s 100,000 people plus 25,000 college students. A pretty small town, but it has the largest percentage, per capita, in the United States of computer scientists and PhDs. Yet there wasn’t a broad wave of entrepreneurial experience,” Feld said.

“In the mid-to-late 90s, there was huge activity around the Internet. Anybody with a pulse could get a company started. The predictable thing eventually happened, there was a lot of wreckage. But from ‘95-2001, Boulder had imported a lot of executive talent—CEOs, VP sales, engineering leadership. We also had a lot of entrepreneurs who had one or two companies in that cycle. So by 2003, people were starting to come back and get re-engaged in entrepreneurial activity. There were probably 50-plus people that made $10 million or more, so there was enough of an angel community. There was critical mass around this. But what was missing was something that tied the community together. There was the endless cocktail party circuit of entrepreneurs. Eventually people got bored and stopped going….“The other thing was that one of the hardest things for first-time entrepreneurs is to have an engaged relationship with an experienced entrepreneur. We found we were creating this thing that integrated the whole value chain of entrepreneurs. It really energized the existing entrepreneurial activity.”

Chris Sheehan of CommonAngels then gave his thoughts on the Boston innovation scene. [Disclosure: Chris is on Xconomy’s board.] “In the IT ecosystem in Boston, there are a number of things going on,” Sheehan said. “It’s a wonderful place for universities and colleges. MIT has been the granddaddy in terms of the entrepreneurial ecosystem. But what I’m seeing is a fresh set of energy coming through the other universities—Harvard, Boston University, Babson, Brandeis, the list goes on and on. They’re all embracing startups. There’s a deep bench of entrepreneurs around Boston. On the larger companies, we’ve been lacking there at times, but I’m seeing renewed vigor from companies in terms of your ability to go in and get experienced executives. And Google and Microsoft have finally made a big commitment to Boston.

“There’s been a lot of wealth created in Boston from startups, most of it from the computer, hardware, telecom, networking industry. You’ve seen the rise of angel groups in the last 10 years in Boston. We were the first back in ’98. Today in New England there are 23 or 24 angel groups, representing 800-1,000 angels. The venture community, there are probably 20-25 active firms doing IT investments. But I think we can do more on the seed and early-stage side.

“The final building block is startup resources. Part of the challenge in Boston is, you’ve got this very dispersed ecosystem. You overlay that with a conservative culture. Trying to make connections there and get in and see the right people can be challenging, can be time-consuming.

On the Seattle front, Greg Gottesman of Madrona Venture Group pointed out the importance of anchor companies like Microsoft and Amazon. “I think the most exciting thing going on in Seattle on the entrepreneurial scene is actually Amazon and the wealth it’s creating for a lot of people who’ll be the next generation of angels and entrepreneurs,” he said. He also stressed the importance of wins in establishing an entrepreneurial culture at the University of Washington—his example was Farecast, the travel search startup co-founded by UW prof Oren Etzioni, which Microsoft bought for $115 million last year.

Steve Hall of Vulcan Capital stirred the pot a little by pointing out some of the shortcomings of Seattle. “The first is the question of whether Seattle has enough capital. It’s a very short list of funds. You need a critical mass of capital to drive entrepreneurs’ willingness to quit their jobs and burn the midnight oil to start businesses. While I think it’s good for us VCs to have the market to ourselves, you need a little more activity to jumpstart the system. The good news is there are a lot of Bay Area firms spending a lot of time up here. But I think there’s room for another fund or two, probably in the $100 million range,” Hall said.

Are celebrity investors/advisors/board members worth it?

Richard Stump — Wed, 04 Nov 2009 01:07:17 +0000

I recently read two posts on this subject, one from Altos Ventures and one from Chris Dixon and I agree with the key theme that celebrity (the term that i would use is “big name” not necessarily famous but known like a politician or well connected person locally) are not worth it:

“ In our experience, celebrity investors and board members do little to help entrepreneurs do what they need to get done. They offer little in the way of strategic or practical advice about hiring, firing, product development, closing deals and financing. Even worse, sometimes the advice can be out of touch with what is going on in the industry or company but due to their celebrity status, some off the cuff comments can carry too much weight.”

I would go one step further and say that the number of “big name” people on a board probably has a inverse relationship with the quality of the start-up, the more “big names” on the board the lower the caliber of the idea and team. In other circumstances I have seen, the “celebrity” board members are used for fundraising only. Look Mr. Rich, former Mayor so and so is on our board as well as former university standout such and such, If they are in shouldn’t you be?

“No matter how big your board or how well connected your advisors are they will NEVER produce the quantity or quality of leads your own team will produce”

Project Management Training

Richard Stump — Mon, 02 Nov 2009 14:45:01 +0000

If anyone is interested in project management training, The Solarity Group & the Bluegrass Business Development Partnership (BBDP) are hosting a two day workshop for 15-20 people on November 16th and 17th. The BBDP will offer a scholarship (50% off) the already discounted registration fee of $1,000. This means that the first respondents to this offer will be able to participate in the two day workshop for only $500.

To Register

Two Companies Awarded Funding

Richard Stump — Fri, 30 Oct 2009 18:10:02 +0000

The Kentucky Economic Development Finance Authority (KEDFA) today awarded two high-tech Kentucky companies, Louisville Bioscience, Inc., and Laboratory and BioDiagnostics, LLC, (LabDx), state funding of up to $250,000 each from the Cabinet for Economic Development’s High-Tech Investment Pool.

LabDx is employing technology to permit transferring lab results directly from the company’s new medical laboratory to customers’ electronic medical records systems. Their laboratory and reporting services will be marketed to physicians and medical facilities to help eliminate errors while improving reporting speed. LabDx is employing technology to permit transferring lab results directly from the company’s new medical laboratory to customers’ electronic medical records systems. Their laboratory and reporting services will be marketed to physicians and medical facilities to help eliminate errors while improving reporting speed.

Louisville Bioscience employs a proprietary lab technique that profiles a patient’s blood plasma proteins to help detect autoimmune and infectious diseases, as well as cancer in their early stages. The new platform technology is also expected to have other applications, including identifying biomarkers and targets for new drugs.

Louisville’s Potentia Pharmaceuticals inks deal

Richard Stump — Mon, 26 Oct 2009 14:31:24 +0000

Potentia Pharmaceuticals signed a deal with Alcon Pharmaceuticals for licensing its drug candidate, POT-4, for use in macular degeneration. Terms of the deal are confidential, but Potentia Pharmaceuticals said it expects to receive hundreds of millions of dollars if the drug for age-related macular degenerationf the drug is approved for widespread use.

The deal announced Friday, gives Alcon licensing rights to the drug and an option to buy the Louisville company. Potentia will receive an undisclosed payment now, and is promised a series of payments if it achieves certain milestones including successfully completing a clinical trial and receiving FDA clearance.

The deal may be the largest ever signed by a Louisville biotech company and the largest coup to date for the University of Louisville’s efforts to establish a life-sciences industry here.

It would dwarf the city’s previous biggest life-sciences success story, the $21.4 million acquisition of Aptamera, a Louisville company that developed cancer drugs, by British company Antisoma.

Communications: Three avenues for growth

Richard Stump — Wed, 21 Oct 2009 14:53:11 +0000

The following is another guest post in a series from Matthew Henderson and the folks at Peritus PR

Below are a few growth themes to consider. Some are new, others are tried and true:

Social Media: Social media is about strategy, not tools. The key to developing a successful social media platform is organic growth. Push your content out, share a wide variety on your profile / page to see what works. Social media means giving up control and letting others drive the conversation.

Here is a link to the top 50 social brands

Public Relations: The basic premise of strategic public relations (at least the proactive kind) is to do good works and get credit for it. Typically, the credit you get comes in the form of higher sales, more event participation, or increased traffic to your Web site – all measurable benefits tied back to your public relations efforts. But, PR is more than sending news releases when the need arises. Efforts should specifically target your key audiences—whether they’re consumers, executives, employees, the media, or the community at large. A long-term PR strategy can tell your story, capture your organization’s brand, initiatives, personality and values far into the future.

Public Policy: Always keep a keen eye to local, state, or federal legislation. Hopping onto the coat-tails of a massive policy push could pay big dividends, or help to further engage your target market. In addition, it’s also important to stop dangerous policy. For example, one of our current healthcare clients has concerns about the Medicare reimbursement rates under the proposed healthcare reform in congress. If enacted, Medicare reimbursements would be cut in half and devastate our client’s industry. Always be mindful of policy pitfalls and windfalls.

What are your thoughts on growth? Do you have a success story?

Lexington & Bowling Green featured as Best Cities to launch

Richard Stump — Wed, 14 Oct 2009 15:17:05 +0000

Fortune Small Business Ranked the top 50 metros according to the following criteria: per capita income, hourly wages, workforce quality, crime rates, taxes and foreclosures.

Lexington was ranked 6th in the medium sized city category (number one was Huntsville, AL)

Bowling Green was ranked 12th in the small city category ( number one was Billings, MT)

What put Lexington and BG high in these rankings were that they graded in the middle on most categories, not a leader and not a laggard.

One of the negatives was tax climate. Kentucky was rated to have the 16th worst tax climate for business in the country

Company Profile: ASAP Analytical

Richard Stump — Wed, 07 Oct 2009 14:12:48 +0000

Don Harris is the founder of ASAP Analytical. I put a few questions to him about his covington based company.

What is your company’s 30 second elevator pitch?

ASAP Analytical is helping crime labs worldwide win the war on illegal drugs. The new designer drugs are described as substances created by drug dealers to get around existing drug laws by using various degrees of molecular modification. The new IRD just introduced by ASAP Analytical allows the forensic chemist to look at the molecular structure of each new designer drug.

What has been your company’s funding & growth so far?

Conventional funding using banks and line of credit.

What is the outlook for your business in the next eighteen months?

Very good because we are filling a need in the industry.

What attracted you to entrepreneurship?

Saw an opportunity and went after my dream.

What have been the advantages and disadvantages of starting a high tech business in Kentucky?

The advantages has been the excellent support from the City of Covington & the Commonwealth. The only disadvantage has been finding qualified people.

Start-Up Slam Louisville

Richard Stump — Wed, 30 Sep 2009 14:33:38 +0000

The Start-up Slam is a great way to form a company for little cost to you – if you are ready to start your company. If you company is in the early stages, then you will benefit from some very useful information for free.

Ouiwrite, re-writing the rules on research papers

Richard Stump — Mon, 28 Sep 2009 13:47:31 +0000

I caught up with Peyton Fouts Friday afternoon for a demo of his Ouibox platform and first product Ouiwrite. Anyone interested in being a beta tester, send me an e-mail to rstump at insightbb.com.

1) What is your 30 second elevator pitch?

OuiWrite is a web application that redefines what it means to “write a paper”. It formats in MLA, APA and a couple other formats automatically, and as the user is writing, OuiWrite will actually find resources that the user is writing about and make it available for 1-click annotations as well as bibliography entries without any research at all making writing less about the idiom and more about the idea.

2) Tell me about Ouiwrite and what inspired you to develop it?

Well all great ideas come from God, but you know, I think it was necessity. I think it’s the classic “find a need and fill it”. Children are born curious creatures with big imaginations and somehow through the educational process, which is all about learning and understanding curious things, or at least it should be, we regiment learning in such a way that is no longer fun. OuiWrite serves to remove the drudgery of writing and concentrate on creativity which is really the true identity of a good paper anyway

3) What are the features of the Ouibox platform that makes it unique?

OuiBox is a huge website with innumerable features but the best way to describe it is taking Facebook, Myspace, Skype, iTunes, Google Maps, all email accounts, Blogger, Youtube and more and putting them all in a centralized place where all the functions interact with one another. The scope of the site is unique as well as the 3D fixed-interface. I’m really excited to show the world.

4) What are your development plans for the company over the next 12 months?

OuiWrite is just the first of many patentable automated services I hope to bring out over the next set of years. I have a new major module scheduled each month for the next 5 years, all of which are on the OuiWrite level as far as innovation goes, it should be interesting.

View the Ouiwrite demo: