Mac Bartine is CEO of Knoxville-based Smart RIA, which markets its secure, cloud-based compliance platform to registered investment advisor firms. A startup veteran, Bartine didn’t found the company, but he’s largely been responsible for where it is today. When he started in October 2015, the company was still pre-revenue with about 40 trial users of an minimally viable product. Today, the company boasts 820 paying users, and by the end of 2018, Bartine projects the company will have $2 million in recurring revenue. Smart RIA was part of Village 36 at the 36/86 entrepreneurship and technology conference held in Nashville in June. And more recently, Smart RIA was awarded the Judge’s Choice award at the Knoxville Startup Day pitch competition, part of the Innov865 Week. The company left with a $10,000 prize. We talked to Bartine about the growth of his startup and asked him to offer a few tips to our readers. Here’s what he had to say.

What’s the origin story of Smart RIA?

In 2010, our founder Roger Kiger was getting sick of using five different software programs to manage his Registered Investment Advisor (RIA) firm, all of which used the same data, and none of which helped him to manage compliance. Roger decided to hire a team of software architects to help him solve his problem.

Several months later, he had a completed solution for his firm, and started using it. Fast forward several months: Roger was notified he was going to be audited by the state of Tennessee. After all was said and done, the auditor called him up to tell him his was one of four zero-deficiency audits she’d ever done, plus it took way less time than she was used to. She concluded that he should consider making his internal solution available to the market, that it was needed by other companies.

Smart RIA was founded in June 2011, and over the next years, Roger made some great headway with a minimum viable product and getting some firms to try it out. But it was difficult for him to manage his growing RIA firm and try to start a software business at the same time, and ultimately, he decided Smart RIA would need someone with a successful startup background to lead the company.

In layman’s terms, what problem does Smart RIA solve for its customers? Can you quantify the ROI, in terms of time or money?

The scariest problem for most RIA professionals isn’t managing their clients’ money. It’s keeping up with the literal mountain of paperwork that federal and state regulators expect them to maintain to be considered in compliance. Smart RIA eases that regulatory burden for our customers by packing in tasks, forms and organization around all the relevant rules and regulations, then condensing that down to simple workflows that can be completed in a short period of time.

RIAs spend over $2 billion a year in employee time on compliance, and our software, when used regularly, can significantly cut back on those time and salary costs, as well as reducing lost opportunity costs when RIAs are doing compliance work instead of growing their business.

Lastly, our customers tell us they’re less stressed because they feel ready for their next audit. It’s hard to put an ROI on that, but it’s a benefit that’s very important to them, and to us.

We think our readers will be interested in the structure of your startup, in which the founder is not the face of the startup. What goes into a decision like this and SmartRIA’s in particular?

Ironically enough, one huge driver of Roger hiring me as CEO, and ultimately selling his majority stake in the company to me, was regulatory compliance. We couldn’t raise money as a startup that’s owned by a wealth manager, because there are possible conflicts of interest that arise. And, as mentioned before, Roger knew what he wanted as a software solution for his company, but translating that into running a software company and doing a product launch weren’t as much in his wheelhouse.

He had a choice of learning how to lead a company like Smart RIA, or hiring someone to do it, and he decided the best chance for the company was to hand the reins over to someone with tech startup experience.

I don’t know all the reasons why other companies would go through something like the leadership change that Roger and I have managed together, but I do know it was a hard decision for Roger to make; Smart RIA was his baby. We had almost two years of conversations, planning, and me proving that I was the right person to fully take over before the full transition was completed.

What does winning the Judge’s Prize mean for Smart RIA, and the investment? Ten-thousand dollars can feel like a drop in the bucket, which makes us think an honor like this really isn’t necessarily about the money, but the tangential benefits?

There are so many great startups in our region, so it was incredibly fun and exciting to win, and a huge honor. I felt like every company participating was deserving of the win that we received.

It’s true, in terms of our cash needs right now, $10,000 is a drop in the bucket, but it’s still a significant amount of money. Our company was very grateful to get it.

When I mention something like winning the StartupDay pitch competition, I try to use it as part of an ongoing story of success and recognition. We were selected for Village 36 as one of the most promising SouthEastern startups at the 2017 36|86 conference; we were selected for inclusion in The Works’ 2017 accelerator in Knoxville; we won the 2017 StartupDay pitch competition; we were one of 12 startups selected for FinTech Venture Day, from a pool of over 1,000 startup applicants from all over the world; etc.

Every new win I can put in that narrative makes the whole stronger, so our StartupDay honors really do have lasting benefits.

What can you say about being a startup in Knoxville? What benefits does the city and the ecosystem offer, and what challenges does it pose?

I’ve been working in and launching startups in Knoxville since I finished grad school in 1996, and a lot has changed over those 20+ years. The entrepreneurial community has flourished, and the Knoxville Entrepreneur Center has played a central role in that.

The cost of living here is much lower than in better-known startup cultures in major cities, but we still have a thriving downtown, a strong arts community and incredible outdoor opportunities. In short, I love living and working in Knoxville.

There is a shortage of local capital for startups, but that’s true in most communities like ours. You have to be willing to go outside your area to find capital. Some startup gurus even recommend not raising money locally at all in a place like Knoxville, viewing it as a waste of time. I don’t agree with that point of view, and we have landed a local investor through our efforts here, but it is definitely harder here than in other places.

There are many more good points and more downsides as well, so I’ll sum up by saying I wouldn’t start a company anywhere else. Knoxville has given a lot to Smart RIA, and we look forward to giving back.

You’re a tech startup veteran, so what is your best piece advice for new entrepreneurs? And what is the best piece of advice anyone ever gave you on your startup journey?

Be prepared for your startup experience to be harder than any job you’ve ever had. Get ready to fail, and accept that you’re going to be stressed out and disappointed. You have to persevere through a lot of difficulties to have a chance to succeed. Related to this piece of advice, do your best to leave your ego at the door when you go to work. You may be smart and talented and have a great or even brilliant idea, but you’re one of millions who fit that description. Be humble, trainable and seek out those who have “been there, done that” to be your mentors.

The best advice I ever received was to never attempt to launch a startup alone. I made that mistake a lot early on in my startup career, and know from experience that it’s incredibly difficult to make a startup work when you’re responsible for everything.

The difficulties aside, there’s no other career path I would choose for myself. Making your own way, providing good jobs to those in your community, solving real problems for others—these are all incredibly rewarding, satisfying and insanely addictive when you get your first taste of success.

The post #MyStartupStory: SmartRIA Solves Headaches for Registered Investment Advisors appeared first on Startup Southerner.

When Christine Neely and Melanie Richardson were working together on a literacy project for families attending a federally funded program, it quickly became evident that parents needed more support than they could provide in a 90-minute class.

That’s how these New Orleans-based education veterans came to found Training Grounds, a nonprofit that provides parent learning experiences, professional development training for early childhood educators, and operates the We PLAY Center, a safe play space for young children and their parents. Last week, Training Grounds won first place and was named audience favorite at PitchNOLA: Education. The duo plan to use the prize money to expand the operating hours for the play center and launch a mobile We PLAY Center.

There’s a big gap in early childhood education across the country, but particularly in New Orleans, where more than 3,500 infants and toddlers are on a wait-list for an Early Head Start seat.

“Early Head Start and child care subsidies reach only 11 percent of children ages 0-3, leaving many families to find other solutions,” the founders explain. “If these children are not offered an alternative they likely will end up in the 60% of American children who enter kindergarten every year unprepared and lacking the language, numeracy and social emotional skills necessary to be successful in school and beyond.”

What’s more, they say, many parents lack of clear understanding of ages and stages of development and often miss key opportunities to provide the kind of interactions that are specifically geared toward their child’s needs and capabilities. That’s where the parenting workshops come in, which cover topics ranging from coparenting to helping young kids build motor skills.

As with any startup, the rise of Training Grounds, which was founded in 2016, has not been all prizes and accolades.

All startups face challenges, and of course the biggest one is usually funding. Training Grounds received seed funding from 4.0 Schools and Camelback Ventures. This month, they’re launching an end-of-year giving campaign to secure donations to support the Training Grounds mission. The company also partners with other organizations in the community to provide services to parents and educators.

Another challenge has been “knowing how to do all aspects of running a company and doing it all well,” Richardson says. “Learning how to divide and conquer tasks like fundraising, board development, marketing and program development was essential.”

Participation in programs like Propeller’s Startup Accelerator and fellowships at 4.0 Schools and Camelback Ventures has helped them develop these and other business skills.

In the end, though, success also has a lot to do with passion: “The passion you feel for your product or service comes through every aspect of your company,” Richardson says. “Your passion is your driving force and will help you to succeed.”

Photo credit: Tracie Morris Schaefer.

The post #MyStartupStory: Training Grounds Fills Early Childhood Education Gap in New Orleans appeared first on Startup Southerner.

Software product development company RevUnit may be happily based in the South, but recently it’s been seeking its fortune out west.

In late April, the Bentonville, Ark.-based company acquired Teamvvork (pronounced “teamwork”), a Las Vegas-based digital marketing agency that served big-name clients like Steve Madden and Allegiant Air.

The deal came as something of a surprise to those who remember RevUnit CEO Joe Saumweber telling Arkansas Business back in 2013 that his company was targeting Dallas and St. Louis as high-growth markets. But Saumweber can explain: In 2014, after RevUnit acquired the Las Vegas-based firm SmashMetrics, one of the principals there, Seth Waite, took on the role of chief growth officer for RevUnit. Hence, when your chief growth officer lives and works in Las Vegas, opportunities for growth tend to present themselves there.

Joe Saumweber

“We still have strong commitments in St. Louis and Dallas, but Vegas has become a big potential market for us,” says Saumweber. “We love its proximity to the west coast—as people get priced out of those markets, they tend to move in. Zappos, for instance, has their headquarters there. That’s just the kind of company we look to serve.”

Founded in September 2012, the brainchild of Saumweber and Michael Paladino, RevUnit specializes in “workplace transformation,” that is, creating custom software for front-line employees of national and multinational companies, many of which are headquartered in the South or not far outside: Virgin Hotels (Miami), AutoZone (Memphis), Mary Kay Cosmetics (Addison, Texas), Purina (St. Louis), and its Bentonville neighbor, Walmart.

The great opportunity in his line of work, Saumweber posits, is that so many employees’ digital experiences lag behind customers’ digital experience.

“People have access to the best consumer digital experiences available when they search, shop or consider travel options,” he says. “But when they’re on the clock, this same population encounters tech that is easily eight to ten years behind the curve of their experiences as consumers. Interfaces are clunky, devices are low-performance, and the overall user experience is frustrating.”

The reason for the clunkiness is that, too often in the past, companies approached their software needs from an architectural standpoint: defining the structured solution that meets all the technical and operational requirements while optimizing performance and security. Getting everything to work, in other words. What set RevUnit apart is that they start from the point of usability.

“The first thing we do is gain empathy for those front-line employees who experience the software on a day-to-day basis,” Saumweber says. “It requires a lot of observation, talking with associates, shadowing. And we have to do that in multiple locations because it’s different market to market. Then it’s a few short days building a prototype of a solution so we can take it back to those same users to see how to make it better. Every organization is different, so solutions need to be customized. There’s no ‘off-the-shelf’ product.”

RevUnit also practices what it preaches, providing a positive culture for its 50-plus employees with twice yearly weeklong retreats and emotional intelligence training sessions, as well as an open feedback environment.

What’s especially exciting for Saumweber and Paladino—as well as RevUnit overall—is that this need for user-friendly software solutions cuts across so many industries.

“The fact is, the pace of technology is not going to slow down, so it’s incumbent upon us to build tech that is easier to adopt,” Saumweber says. “Transportation, healthcare, retail—every single industry is being touched by this right now. We operate across industries for that reason.

“We like to solve big, hairy problems for some of the world’s largest companies. And we’re good at what we do.”

The post Bentonville, Ark.-Based RevUnit Takes Chance With Las Vegas Acquisition appeared first on Startup Southerner.

Startup Southerner is proud to present the Southern Startup Report in partnership with LookFar, a New Orleans software development studio committed to supporting and accelerating technological innovation in the greater Southeast. The Southern Startup Report is a twice-monthly, curated newsletter covering the latest startup happenings in the American Southeast. Subscribe here if you like what you’re reading.

Southern Startup News | June 16 – June 30:

Atlanta, GA – TechHire ATL launches off the back of $4M federal grant –

The Southern tech talent gap is one of our most consistent topics at the SSR. For good reason; Southern ecosystems often struggle to attract experienced developers or effectively develop them close to home. Even Atlanta, one of our more developed hubs, is looking for ways to widen and diversify talent pipelines. Their newest initiative, TechHire ATL, is looking to fill a class of 360 students – drawn largely from lower-income communities – for a three-year, free introduction to tech topics.

It’s an ambitious plan, but TechHire and similar programs provide an important chance to increase opportunity share in Southern cities (around 20 Southeastern cities are involved in TechHire, including New Orleans) while simultaneously improving regional talent pools. One of the other initiatives we’ve tracked, TechHire Kentucky (TEKY), has been in operation for over a year, and has already placed graduates at local tech companies.

Leading the charge for TechHire ATL is TechSquare Labs, a familiar name for SSR readers due to their involvement with The Engage Fund, a public/private/academic partnership that we’ve covered in the past. They’ll share their duties with public organization Worksource Atlanta, and Thinkful, a coding school. Again, it’s worth noting Atlanta’s consistent collaborations between local companies and local government. Also notable? The $4M federal grant powering the initiative.

Knoxville, TN – LaunchTN receives $500K from Appalachian Regional Commission –

It’s no secret that Southern and heartland states have been hit the hardest by the decline of the coal mining industry. After all, we’ve just endured an election cycle that saw coal and coal miners become a marquis political cause. A lot of recent debate has centered around bringing coal back to a place of prominence, but other (quieter) governmental agencies have been taking a different tack: funding programs that encourage the creation of a more diversified workforce. The Appalachian Regional Commission (ARC) has so far plowed over $92M in funding into various regional initiatives, with a solid chunk of that money heading to Southern states Alabama, Georgia, Kentucky, Tennessee, South Carolina, Virginia, and West Virginia.

One of the beneficiaries of the new round is LaunchTN. If that name’s a little unfamiliar, you may know them better for their banner conference, 36|86, which has steadily grown to be one of the Southeast’s highest-profile annual events. The $500K they’ve received will go toward expanding education and training programs for rural youth, building tech infrastructure, and providing general support to entrepreneurs in East Tennessee.

I do have to close this on a negative note. ARC is in danger. Recently released budget proposals put the initiative on the chopping block, despite signs that the individual who made the decision doesn’t appear to know what ARC does. While our nation’s budget remains in flux, I’m extremely worried about the cavalier way in which ARC is being treated. Watch ARC – it’s been an enormously beneficial program for innovation in numerous states, but it’s a canary in a political coal mine and it may not be around much longer.

New Orleans, LA – Two New Orleans ventures secure grants at Creator Awards South –

I was pretty excited to see two New Orleans ventures heading to the Creator Awards South stage in Austin. After all, as you may have heard, the Awards were a big deal. Produced and powered by coworking unicorn WeWork, the awards see over $20M in grants passed out to startups ranging from idea stage to rapidly scaling. Even better: both companies won grants in their respective categories. Catering venture My House Social picked up $18K in the Incubate category, while Brothers Empowered to Teach, which recruits men of color for careers in education, scored an impressive $130K in the Launch category. Huge congrats to both; it’s extremely encouraging  to see local startups performing so well on such a high-profile stage.

Lake Charles, LA – Waitr expands services to Birmingham –

We’ve got a Louisiana startup on the move! Lake Charles-based food delivery service Waitr has officially announced the start of services to Birmingham, making it their fourth Alabama expansion after Hoover, Mobile, and Tuscaloosa. While a single-city expansion might seem like a minor step for a company that already operates in 22, it’s a good opportunity to call attention to Waitr’s rapidly scaling scope. Their aggressive rate of expansion is remarkable for any company, especially given that they’re one of only a handful of Louisiana companies that have both raised a considerable round of funding and applied it almost entirely to growth. Things do make more sense when you look at their particular industry. Food delivery is an intensely competitive space, where Waitr has to jostle for room against companies including Amazon, Postmates, and Uber. They’re currently in a spot where rapid scale across the Southeast is probably their best bet on survival in this packed field. Keep an eye on Waitr. I expect them to remain one of the fastest-moving startups in Louisiana.

Charleston, SC – Blackbaud announces $121M acquisition of JustGiving –  

Yep, BlackBaud has gobbled yet another company. While the Charleston company primarily focuses on the nonprofit sector, recent years have seen them rapidly expand to cover other verticals. With 4 major acquisitions since 2015, they’re among the Southeast’s most startup-hungry large organizations, and a name that any operators in nonprofit or edtech should be intimately familiar with.

Let’s go ahead and add a new sector to the list: crowdfunding. Blackbaud’s mammoth buy-out of British company JustGiving, their largest since their $190M acquisition of Smart Tuition in 2015, makes for an interesting wrinkle in their existing offerings. JustGiving does focus on philanthropic crowdfunding, and can be thought of as a UK cousin to GoFundMe. Blackbaud’s decision to pick them up is primarily motivated by a desire to stay ahead of the curve as Americans fundamentally change the ways in which they donate. Given Blackbaud’s incredible reach and influence with the American nonprofit sector, there’s potential for this move to have an immediate impact both on causes looking for cash, and on the platforms that currently serve them.

Recent Rounds:

Atlanta, GA – Car360 – $3.55M Series A
Atlanta, GA – MessageGears – $2.75M
Atlanta, GA – Movius – $15M Series C
Atlanta, GA – Synthio – $10.5M
Miami, FL – Kairos – $347K
Miami, FL – RecordGram – $1M
Miami Lakes, FL – Hero K12 – $150M
New Orleans, LA – Pine Biotech – $1M
Tampa, FL – Homee – $15M Seed

Upcoming Events:

July 6 – New Orleans, LA – NOLA Health Innovators Community Kickoff
July 11 – Conway, AR – Conductor Mentor Network Meeting
July 14 – Birmingham, AL – Sloss Tech 2017
July 16 – New Orleans, LA – CoderCruise 
July 20 – Atlanta, GA – On the Grind with Chirag T. Patel

LookFar Updates:

Upcoming Event: July 12, a Day of Action in Defense of Net Neutrality – So, we care about net neutrality. A lot. We care about it a lot, we even blogged about it, major commitment, right? All kidding aside, this matters to us; net neutrality is one of the key tools keeping the David vs. Goliath showdown between small startup ecosystems and the coasts at least sort of even. We’re working with Fight for the Future to put on a day of action in New Orleans. We’d like you join us – duties include helping contact lawmakers, creating a solid statement on the importance of net neutrality, and consuming the free pizza and beer we’ll be providing.

The post Southern Startup Report: June 16 – June 30 appeared first on Startup Southerner.

The pulse of the startup scene in Music City has a healthy beat when it comes to healthcare. According to the Nashville Health Care Council, more than 250,000 professionals are employed locally by the industry representing over a $38.8 billion economic impact.

Vic Gatto. Photo courtesy of Jumpstart Foundry.

“Jumpstart Foundry was rebranded three years ago as a seed-stage investment fund for advanced healthcare and healthtech entrepreneurs,” says Vic Gatto, founder and CEO of Jumpstart Foundry. “There are more than 18 publicly-traded healthcare companies in Nashville and close to 4,000 healthcare-related companies.”

Gatto says forming relationships with many of them helps validate the product-market fit and path-to-market before JSF decides to invest in new healthcare-related companies.

Gatto is also still a partner at Solidus Company, a prominent early-stage venture capital firm which was featured recently on CB Insights as the most active investment arm (in the technology startup segment) for Tennessee. (According to Crunchbase, a few of their portfolio companies went through exits such as Populr, ONFocus Healthcare, Contigo Financial and RentStuff.com.)

“The accelerator model got boring,” he says. That sentiment last year was noticed across Tennessee and surrounding region and sparked conversation about how the accelerators could improve the value they offer both entrepreneurs and the investor community. “For us, we prefer to work with entrepreneurs who are having the healthcare industry guide their product development process from the onset,” he says.

While acknowledging there are some interesting conversations and infographics on the web regarding what the future of health technology may look like, Gatto says listening to what healthcare providers are pointing out as their largest pain points is where entrepreneurs should start before thinking about coming up with new products and services.

“Groups of industry partners—hospitals, physician groups, device biotech, technology providers—they’re all discussing similar themes right now,” he says. “One of those themes is just that everyone is expected to provide more value for less revenue.”

Gatto points to GreenLight Medical, one of 38 current portfolio companies at JSF, as an example of how online technology can be used to streamline a tedious process such as researching medical technology during the procurement process.

Health:Further, a health innovation conference which spun out of JSF, brings the health and wellness community together “to discuss these industry themes in greater detail,” Gatto says.

David Shifrin, community editor at Health:Further, says they’re also equally going to be focused on what he called preventive healthcare for the next event scheduled for August 22-25 in Nashville. “The attendance at the conference grew last year by over 30%. We’re expecting 2017 to be another strong year where we’re discussing not just the future of healthcare but also the future of preventive health and wellness, or public health, too.”

When he was young, Gatto wanted to be a doctor. “I loved the science behind all of it,” he says. “But being around the innovative spirit is what gets me really excited. Just as our parents’ generation went to the moon, our generation has an opportunity to innovate the healthcare industry.”

On that point, Gatto adds that he’s optimistic about Nashville being a significant innovation hub where that happens.

The post Founder of Nashville’s Jumpstart Foundry Talks State of Healthcare Startups appeared first on Startup Southerner.

“How do you balance earning money from customers versus raising money from investors? What resources have you leveraged to get ahead? What are the strategies that put you on the road to success?”

As a budding entrepreneur, wouldn’t you love to be able to ask these questions to a mid-stage startup? Well, we went ahead and did that for you. Whether you’re selling clothes, building software or doing anything, really, it helps to learn from those who’ve come before you.

That’s why we spoke with DivvyUp Socks and FullScaleNano, two Tallahassee startups who’ve survived incubation and are now ready to scale.

Topics of discussion include building the right team, getting connected with the right network, and achieving the right balance of focus between investors and revenue. Since one of these startups is bootstrapped, and the other has successfully raised a seed fund from investors (we’ll let you figure out which is which), the lessons in this episode of Startup Capital should be applicable to anyone.

Our host Lucas Lindsey of Domi Station interviewed FullScaleNano CEO Jodi Chase, and DivvyUp’s Mitch Nelson and Jason McIntosh about the decisions that helped them get to where they are today.

This podcast was brought to you by Cuttlesoft, the idea-driven developers. To find the rest of the Startup Capital interviews online, visit www.cuttlesoft.com/startup-capital.

The post Startup Capital Podcast: Life After Revenue appeared first on Startup Southerner.

Innov865 Week is a week-long series of events, taking place September 18-22, 2017, to celebrate and showcase Knoxville as a great place for entrepreneurs to start and grow businesses. We have partnered with the Innov865 Alliance to bring you stories of innovation born in East Tennessee.

In a recent cover story of Knoxville Mercury, four high-tech startups from Knoxville were featured for their potential of shaking up their respective industry.  What’s also of note is that the story was written by Brandon Bruce, co-founder of the Knoxville-based Cirrus Insight, which ranked at no. 41 on Inc. 5000 listing of the country’s fastest-growing companies.

“Knoxville is quickly earning a reputation as one of the best locations in the Southeast for entrepreneurs to start and grow a business,” says Tom Ballard, PYA’s Chief Alliance Officer.  PYA certainly paved the way for such reputation to exist now, since PYA itself started 34 years ago in Knoxville and is still thriving.

Others in east Tennessee outside the Knoxville area are also gaining traction, as well. Startup activity is also thriving several hours north on I-81. Johnson City-based BrewFund team not only are committed to building their product, they’ve been hosting pitch competitions for the community.

These startups across east Tennessee again have a chance to be part of the fifth Startup Day pitch competition for a chance to win up to $15,000 in cash prizes. Applications will be accepted from June 16 through July 7, 2017. Six startups will be chosen to participate in Startup Day 2017 on Thursday, September 21, at the U.S. Cellular Stage at The Bijou Theatre.

It’ll be the second time Startup Day will be the signature event of the Innov865 Week, a celebration of Knoxville’s vibrant entrepreneurial community, September 18-22, 2017. The week will kick-off on Monday with Future865, an event that will explore opportunities to help Knoxville leverage its many assets – social, cultural, and technical – to become the destination for entrepreneurs in the Southeast. Other scheduled activities include a technology showcase hosted by Oak Ridge National Laboratory and the University of Tennessee Research Foundation; The Works hosted by the Knoxville Entrepreneur Center; the return of the Maker Summit and Elev865, an exclusive networking event for business leaders and entrepreneurs; and the roll-out of Olli, a self-driving, fully electric vehicle that was created and manufactured by Local Motors, a Knoxville-based company that designs and builds innovative motor vehicles.

Innov865 Week is presented by the Innov865 Alliance, a collaborative effort to celebrate and showcase Knoxville as a great place for entrepreneurs to start and grow businesses and increase access to capital.

The post East Tennessee Startups Have Chance to Win $15,000 on 2017 Startup Day appeared first on Startup Southerner.

Will Anderson, Founder of Salemtown Board Co.

In the past decade, entrepreneurs have shown an interest in creating both innovative businesses and a social impact. The entrepreneurial spirit has collided with a social consciousness to create a hybrid sector of startups called social enterprises, which are “for-profit or nonprofit ventures that benefit a charitable, human or environmental cause.”  Among them is Salemtown Board Co., a skateboard shop in North Nashville that is “striving to do our part in changing our city by creating jobs for young men who need them here in Salemtown.”

Social entrepreneur and founder of Salemtown Board Co. Will Anderson found a need right in his own neighborhood of Salemtown: Like Germantown—its better-known sister neighborhood—Salemtown has experienced the devastating consequences of segregation and gentrification. Anderson explains that Salemtown Board Co. strives to “honor and respect the community members, and promote dignity where gentrification dishonors and robs.”

After looking around his community and asking, “What does Salemtown need?” Anderson saw a need for employment. Anderson believes that the young men in his community have a good sense of pride in themselves, but often don’t have the opportunity to engage with the professional world and are intimidated by it as a result. “An economic gap is a cultural gap,” explains Anderson. Salemtown Board Co. has set out to bridge that gap by providing training, jobs and professional mentorship to equip men with tools to navigate the professional world.

Serving social causes with an entrepreneurial mindset can be effective in solving problems of resources, operational costs and systematic inefficiency which inevitably arise when combatting large-scale social issues. The goal of a social enterprise is to use entrepreneurial thinking to solve some of society’s most pressing problems. Looked at a different way, the goal is to create a scalable and valuable product that also serves to better the social cause. This latter perspective is where social enterprises can face contradictions in their business and social goals.

After a social enterprise has hit the ground running, some of the biggest obstacles it faces involves scalability and growth-potential. Since its beginnings in 2012, Salemtown Board Co. has “wrestled with how to better multiply [its] impact.” Anderson explains that Salemtown Board Co. needed to find a way to accommodate waste, which for them meant hiring and training more people. He also found that people wanted to support the Salemtown Board Co., even if they weren’t in the market to buy a skateboard.

Anderson took the advice given to him by a mentor and opened a nonprofit called Maple Built, which expands upon Salemtown Board Co.’s primary goal of “creating opportunities for learning and mentorship” through woodworking. “Now we can cycle through employees and act as a bridge to other employment,” explained Anderson.

During his time in the social enterprise world, Anderson has noticed “a demand for both profitability and sustainability,” something he hopes big businesses will also notice and apply. If it were a true symbiotic relationship, every social issue would be best solved in the market place, and there would be no reason for a business not to serve a social cause. It takes creativity, patience, trial and error to start any business or nonprofit, but especially to start something that reconciles the two. For Salemtown Board Co., that has meant being attentive to the community’s needs and adapting to the changing climate of the social enterprise world.

Salemtown Board Co.’s setup at 36|86 Conference, 2017

The post Salemtown Board Co.: Scaling a Social Enterprise appeared first on Startup Southerner.

Alex Lavidge is a former startup accelerator director, entrepreneur, investor, mentor, management consultant, sales and marketing professional, and tech startup employee. His involvement spans more than 207 startups throughout his professional career. As a social entrepreneur, he participated in more than 404 different community-building events and initiatives for the startup community throughout the Southeast, but primarily in Knoxville and Chattanooga. He returned home to the Southeast from Silicon Valley in 2008.

While an Entrepreneur-In-Residence (EIR) at The Company Lab in Chattanooga, he also directed GIGTANK in 2015, an accelerator program that attracted over a dozen startups from across the U.S. and the UK whom later went on to raise over $5.6M in investment capital. He’s currently collecting stories from failed startups called Startup F.A.R.T.S., an acronym for “fire, aim, ready, trash, start over.” Combining both humor and wisdom, his thesis is that the majority of startups fail because they don’t know what they’re more product-focused than market-focused and therefore proceed to launch new ideas with misaligned tasks and goals in an illogical order.

All of this to say, he’s a quintessential Startup Southerner. We sat down with Lavidge, the newest Startup Southerner contributor, to learn more about him, why he’s so passionate about supporting entrepreneurs in our region and what he knows about starting companies that he could share with our readers.

SS: Your grandfather’s entrepreneurial story had an impact on you. Tell us about how he influenced you to get active in supporting and campaigning for entrepreneurship?

Alex: In the late 1940s with a few hundred dollars to start an advertising agency in Knoxville, Tennessee, with his partners called Lavidge, Davis & Newman. After studying best practices of other advertising agencies, and with only a typewriter and a desk in his office, he would venture to knock on doors of locally-owned companies and ask “what’s your biggest problem?” Proposals got delivered the following day. With that discipline, he later went on to launch on his own agency called Lavidge & Associates, which at its peak had 37 affiliate offices in its network spanning 11 countries.

Throughout his entire life, his path in particular was to live beneath his financial means and invest savings back into his agency, stocks and new businesses throughout the region. He seldom saw a reason to go into debt unless it was financing revenue growth as a calculated risk. It was a formulaic roadmap for life design not too dissimilar from other self-made millionaires studied by scholars like late Dr. Thomas Stanley, author of The Millionaire Next Door.

His sensibility and entrepreneurial spirit inspired me to deepen my understanding of business, investing, and the scientific method throughout my sales and marketing career with technology startups—but also drove me toward studying economic development from an interdisciplinary, entrepreneurial perspective. For the most part, this was because he would tell me often, “The challenges you’re going to confront when launching companies in your lifetime are going to be somewhat different from what I had to go through.” He’d then grin and continue, “the only thing that isn’t going to change is that to be successful you’re going to have to make sure you know how to sell and earn more revenue than you spend.”

SS: Is it really that easy? From what we understand, it’s not.

Alex: It’s not easy, but these stories offer so many valuable lessons to learn from them that get overlooked in today’s fast-paced business climate. One of those lessons, for example, is the importance of maintaining a positive mental attitude regardless of adversity.

But even with the right attitude, it is also important to point out that a lot of entrepreneurs struggle if they don’t have mentors with whom they feel connected and trust. In other words, a role model that is relatable and be able to say “I used to be like you.” Then, they are able to offer proof that success is possible for the mentee no matter what the odds. A lot of research and opinions are now published about the importance of relatable mentorship over the past few years.

Besides mentoring, to get started along an entrepreneurial path, it takes money you’re willing to lose. Otherwise, unless you receive an inheritance, or are born into a family with an appetite for investing in new ventures, or you have close friends willing to invest in your vision, becoming an entrepreneur can seem overwhelming when self-financing through savings, debt, or credit cards — even reckless. Studies conducted estimate anywhere from a half to over 75% of adult Americans are working paycheck to paycheck. When you’re in that kind of way of life, it can be very difficult to escape that routine and launch a company unless there’s personal seed capital. We don’t address this point enough in Tennessee, or even the southeast.

So one solid approach a lot of self-made millionaires studied throughout my lifetime started their entrepreneurial journey by learning the craft of brokering and salesmanship before launching a company. From there, they created side income with very little investment capital until enough cash got saved personally to test a new idea of theirs. Or, better yet, they would do this on the side while working a full-time job in the industry where they want to launch a company and learn from others before launching out on their own. As such, the psychology of salesmanship is something I continue to advocate we teach as early as high school.

SS: Talk a little bit about your interest in economic development of startup communities? 

Alex: Back in the late-2000s, there was more of an entrepreneurial “egosystem” in the Southeast where decisions, based off of assumptions and opinions, were made in closed boardrooms (and in some cases by those without a business background)—as opposed to an entrepreneurial “ecosystem” where, through a scientific process and stakeholder meditation, new metrics and milestones are identified that drive success where the greater majority benefits. As such, early on, most established entrepreneurs I came to know would just shrug their shoulders with cynicism and disregard getting involved with any new public or private initiatives. They felt like there was nothing in it for them.

These days, the shift toward the “ecosystem” model is happening in the Southeast and it couldn’t come at a better time. The wave of new companies underway faces a new set of challenges in a hypercompetitive global economy that are different, and sometimes not as well understood or discussed, as their predecessors in the last century. This means you need as much diversity of thought and perspective as possible represented in those conversations. Everyone who wants a seat at the table should have one.

However, it bears repeating that there’s also a lot more than collaboration that needs to take place, which, according to the latest research, if we’re not careful can unintentionally foster mediocrity.

SS: You’ve said the health of our entrepreneurial tradition is at risk. How, exactly?

Alex: In Tennessee for instance, we rank as being one of the most difficult states to receive a SBA-backed loan. For SBIR grants, we rank 7th out of 11 states in the southeast. Meanwhile on the plus side, we ranked 21st out of all 50 states in 2016 for venture capital investment — which has definitely improved over the past few years.

But across the country, the largest concern we face as an entrepreneurial community I think is just the trends showing a decline in levels of new business formation. Why this is happening is still up for debate — but depending on which demographic segment you’re analyzing, the reasons range from the increase in student debt in this country to corporations in America making it too competitive for certain types of small businesses or startups to compete.

Throughout the past 10 years, I’ve been watching the debate regarding how to best measure the economic impact of small businesses and startups on our economy that rise above just focusing solely on job creation. In the years ahead, I think we’ll start to see both existing and new public-private partnerships bring stakeholders together to start to identify and agree upon new metrics that incentivize supporting community programs and personal development resources that in turn foster new business formation.

SS: Beyond helping to strengthen entrepreneurial communities, you also have your own entrepreneurial background. What was the first company you started?

Alex: At the age of 16, I saved the money I made as a paperboy and started a classified newspaper called Corvallis Classifieds I sold it the following year to a local communications company in Oregon while working part-time as a book shelver at the local public library. From there, I was always experimenting and hustling.

For instance, while still a teenager, I learned about the high failure rate of new restaurants. So I’d go to auctions and purchase kitchen equipment for pennies on the dollar and then resell to entrepreneurs starting new restaurants if I had a purchase commitment ahead of time.

Or, there was the time I was catering for a corporate function before a football game and saw that they had purchased football tickets for hundreds of their employees. Only half of the tickets were picked up. Minutes before the game started, they threw them out—so I asked permission to take them and sold them on the street for around $700 in extra cash that afternoon. At the time, it seemed like all the money in the world.

All those types of experiences and lessons over the years taught me about the positive and resourceful mindset it takes to be a successful entrepreneur, and investor, as I entered into adulthood.

SS: And then you mentioned that your entrepreneurial journey took you from Iowa to Silicon Valley? How did that happen?

Alex: It wasn’t until I turned 25 studying management and entrepreneurship at the University of Iowa that while running a property management company overseeing 44 tenant accounts. After proving through taking the occupancy rate from around 70% to 100% with my marketing efforts that millennial tenants were more interested in paying more in rent for “culture and quality of life” rather than “amenities and standard of living,” I decided to go after a new challenge.

Of course, I had no idea what I was doing, but I tried to launch PayRent as a platform where tenants could pay their rent online and improve their credit score at the same time. I found myself flying out to Silicon Valley often to visit with investors, tech companies like eBay (which had a massive ecosystem of acquisitions at that point, including PayPal), and developer talent. Eventually, in 2005 I decided just to move out there. It became apparent to me how important it was to plant yourself in the right environment in order to reach success.

However, I was still over my head. The culture in Silicon Valley was unlike anything I had ever been prepared for in my entire life. After I shut down PayRent, mentors and friends encouraged me to stop blowing through what resources I had left and “get paid to learn.” It was the best advice I ever received that I tell 20-somethings all the time. It’s hard to hear when we’re young and ambitious, but no one should feel like they’re in a rush to launch a company. It’s better at first to get paid to learn. Figure out what you’re really good at and build on those strengths. Yet, exceptions will always exist. Malcolm Gladwell, in his book Outliers, points out that entrepreneurs like Bill Gates had already invested over 10,000 hours in computer programming before launching Microsoft as a college dropout. I’ve always felt that in entrepreneurial culture, we have to stop promoting these types of outliers as the norm.

SS: What a unique perspective, having lived and worked around Silicon Valley and then returning to Knoxville and Chattanooga. What did you bring back with you, in terms of knowledge or wisdom?

Alex: The entire San Francisco Bay Area felt like one massive campus. At almost anytime in the day, there was always a chance to learn, connect with others making a difference, and listen to speakers come to present on the latest trends in technology, politics, environmentalism, and more.

So when I returned to Knoxville, I dreamt everyday of a community calendar filled with similar events focused on learning, not just networking. After starting a coworking group that met every Wednesday at the Panera Bread in Bearden for professionals like myself whom could earn a living “with only a cell phone and a laptop,” we then started over Knoxville Overground, the first entrepreneurial community center and coworking workspace in the city that as a volunteer-powered organization was involved with more than 144 different events and initiatives during its first year to bring help ignite the entrepreneurial spirit in my hometown.

Knoxville Overground, like Create Here in Chattanooga, after being recognized in Fast Company magazine 4 years later as a top example of social innovation in Tennessee trailblazed and influenced an imprint on the Knoxville community (as well as the region like Nashville, etc.) that continues to this day through numerous other initiatives still going like the Knoxville Entrepreneur Center where I continue as an advisor to this day.

SS: To date you’ve been exposed to more than 207 different entrepreneurs and startups throughout your career. What usually has been the biggest challenge standing in their way?

Alex: Albert Einstein is given credit for saying, “if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.” I too think everyone is born a genius, but where an entrepreneur and their team sets down roots and decides to grow is a significant, oftentimes unrecognized factor, in either their success or failure.

Point being, unless the startup they are starting is in the same industry as some of the surrounding employers (or high-quality mentors) whom have credibility backed by a strong track record, superior market intelligence, and industry-wide strategic relationships, then it might make it that much harder to break into the market.

Entrepreneurs also need to be able to connect with the culture with their authentic sense of self. We are all more likely to help those most like ourselves.

SS: In general, do you think the culture for entrepreneurs in the South is doing them good? What’s wrong with it, and, speaking generally, how could it be better?

Alex: There’s so much to love about southern culture. We’re friendly—and loyal—to a fault. We’re also very frugal and can be adverse to risk. Yet, there’s also a “pay it forward” culture here that is rare in other parts of the country that is going to be a leading contributor to our entrepreneurial success in the years ahead.

We have our challenges ahead though. Since moving back, I’ve been passionate about promoting STEM (and STEAM) education. It’s projected that by next year, over 2.4 million jobs will go unfilled because companies can’t find the right qualified candidates. So over the years I’ve been involved with a variety of different initiatives to help improve collaboration and consensus building among the public and private sectors. Most recently, a firm I founded called Syner-G (while an EIR at Strata-G) was hired by the Chattanooga Chamber to identify how technology platforms like Workbay.net can be used to help improve communication amongst stakeholders. It helps when parents, students, counselors, teachers, and employers are all on the same page—and online platforms like Workbay we felt after our independent assessment can add tremendous value toward lowering the skills-work gap in not only Hamilton County, but across the Southeast as well.

SS: What are some of the projects you’re working on now?

Alex: I’m thinking a lot about how we can comprehensively increase deal flow for investors in the South.

At the moment I’m independently management consulting and conducting a market research through an agency I’m in the process of rebranding called The Startup Experts. Clients at the moment are mostly focused in the financial services industry like Lirio LLC, a parent company for marketing platforms like Finworx and Fiveworx that are coming up with new ways that artificial intelligence and machine learning can improve outcomes for inbound marketing. They spun out of BPV, which previously had $2 billion under management in Knoxville.

Other clients like Smart RIA, also based in Knoxville, provide online compliance software for registered investment advisors. Carlson Prospect Research based in Austin is another client that ties in here where they compile wealthy prospects for nonprofits that can be approached regarding their interest in contributing to a nonprofit cause.

Lately my interest has been in how prospecting technology and marketing automation can help regional funds attract more capital that can then be reinvested in emerging companies throughout the southeast. At the moment, most of my collaboration on that front is with Angel Capital Group. At the same time, I’m also having a lot of conversations with corporations about how they’re going about funding innovation both inside and outside of their office. Especially with online equity crowdfunding (or I perfer the term “marketplace investing”) the way companies are getting financed for growth in the future is changing.

But in the short-term, I am very much looking forward to being a weekly contributor for Startup Southerner.

The post Q+A With Alex Lavidge, a Quintessential Startup Southerner appeared first on Startup Southerner.

Growing your startup can feel like a constant battle of David vs. Goliath, no less in attracting and retaining the talent your company needs in order to thrive. When it comes to medical, retirement and other traditional employee benefits, unfortunately many startups have a benefits strategy that is scant or non-existent. However, with a few shrewd benefits hacks, your company can lay the groundwork to be competitive with much larger companies and do so without breaking the bank.

1. Self-insurance isn’t only for the Big Guys

Most small businesses that offer health insurance choose to be fully insured and pay the same rates as all other businesses in their area with that insurer. However, for businesses as small as 5 employees, there has been a recent surge toward level funding, a type of self-insurance program where you pay fixed amounts every month into a claims fund and stop-loss insurance covers any claims above a certain threshold.

This strategy works especially well for startups where employees tend to be tech savvy, as this correlates highly with adoption of telemedicine and price transparency tools that can lower medical expenses dramatically. How much does this all save? With a generally healthy group of employees and some education on how employees can avoid wasteful expenses, you can save as much as 25%-40% while maintaining the same level of benefits.

2. Don’t get fooled on 401(k) fees

All 401(k)s are not created equal, and small businesses tend to end up with the worst arrangements if the decision makers don’t know the direct and indirect fees that are involved. In fact, fees can vary as much as five times from one plan to another, with most of these fees carefully shrouded or built into investment costs.

The good news is that with proper due diligence, the fees of many small business 401(k) plans can be lowered by a full 1% of the plan’s assets—a difference which can allow you to accumulate an extra 20 percent or more in your account over the course of your career. That means that even if you can’t afford a company match just yet, you can make up some ground just by sponsoring a plan with an employee-friendly fee structure.

3. Consider a “defined contribution” employee benefits strategy

Startups need to be especially diligent in how they allocate their limited resources. While your employee benefits budget may be constrained, you can get the edge over other employers by being more flexible and transparent with your benefits contributions.

Newer benefits technology platforms make it easy to offer a broad array of benefits to employees on a defined contribution basis. Here, employees allocate their benefits dollars to what matters most to them—whether that is traditional health, dental, and vision or niche products like pet insurance or student loan repayment—and can easily supplement these with their own contributions from their paychecks.

While there are different levels of implementation to consider, having some version of this strategy in place early in your company’s development will make it easy to increasingly reward employees as you grow and are able to contribute more to the benefits budget.

With these three benefits hacks as a starting point, your startup can begin to level the playing field and offer benefits that are truly in the best interest of your employees.

The post 3 Smart Employee Benefits Hacks for Your Startup appeared first on Startup Southerner.