Education

Extra Credit

I have always loved listening to stories. 

At home, my parents used to tell me stories whenever I’d go to sleep. In school, I enjoy listening to friend’s and telling my own stories as well. Lately, my growing interest in entrepreneurship has me listening to people discuss their entrepreneurial journeys. These stories of solving problems and building a business have captured my attention, but I had to go beyond the status quo to find them.

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This caffeinated contribution was written by Ani Soni. Anirudh is a student who is becoming indispensable as he explores entrepreneurship within a startup community.

As a student in high school, there are a few classes, programs, and clubs that hint at what entrepreneurship is all about, but they lack heart, let alone the realities that come from actually building a startup or small business. I enjoy hanging out with my friends, but they don’t share the same interest I have in building my own company. My family is supportive too, but I really haven’t had a way to consistently share stories about building a business.

To fill this storytelling gap, I started looking for ways to meet other entrepreneurs. While it took a little research, I found many ways to meet people who own their own business. I’m eager to continue exploring “entrepreneurial ecosystems”, but I feel lucky to have chosen to first attend a weekly program called 1 Million Cups. Attending 1MC has allowed me to listen and learn from the stories of entrepreneurs, but showing up wasn’t easy.

I was so nervous at first! As a high schooler, I wasn’t sure if or how to show up. I assumed everyone was more qualified and successful. I didn’t think I would be able to understand, let alone contribute to the conversations. In my own mind, I didn’t belong and it was like I didn’t deserve to be there. It would have been easier to say, “maybe someday”, but I’m glad I decided to take the training wheels off.

When I arrived that first Wednesday morning, everybody was welcoming, kind, and incredibly interesting! I was thirsty to return after experiencing the generous energy this room of fellow students, entrepreneurs, intrapreneurs, and community builders exuded. Attending 1 Million Cups week after week, I now realize that people of all ages enjoy sharing stories just like me. Entrepreneurs sure like helping one another as well!

It’s only been a few months, but I already feel connected to this community of entrepreneurs. In fact, I’ve offered to join the volunteer 1MC organizing team, because I’ve seen how stories create a bond, and perhaps that’s what it’s all about. No matter where you’re at within your own journey, I’ve learned we are not alone. Everybody helps everyone grow. Now I’m on a mission to learn from more entrepreneurs, to build into my own ideas, to ask for help, and to accelerate others however I can within the entrepreneurial ecosystem.

By Ben McDougal, ago

Tenured

Recognize, connect, and support those who consistently delight those they serve over a prolonged period of time. Rewarding such an initiative makes sense, but at what point does the comfort of a rewarded role devolve into a willingness to sail into the sunset?

When starters run into the aloof, misaligned energy can lead to a standoff. Time is the ultimate release, but what if progress is needed now? Every situation is different because of the complexity of an environment and the people/organizations involved, but here are tactics that seem to work no matter the circumstance.

The first uses social currency. It requires a change maker to set their ego aside, and instead, celebrate all that’s been achieved by the accomplished, yet tired gatekeeper. Use respect, kindness, and appreciation to form a bond. Relationships that feel less transactional often create leniency toward new ideas. When a crack in the wall of inactivity is created, be glue that maintains the integrity of the existing system. For example, “I’m too busy” is a common qualm, so lean into that pain by offering to execute on the idea that has sparked mutual interest. It’s important to be realistic in these moments, because when promises are made, credibility is on the line. As you not only light a path toward progress, but also champion change by evolving ideas into reality, trust is gained and your ability to continue making a ruckus increases. Want to extend your leash further? Take responsibility for failures, but give all the credit away when success is achieved.

If a larger organization is involved, another interesting tactic invites the tenured leader to level up the team by activating a colleague. This provides a new hire the chance to get involved within the entrepreneurial ecosystem, while the organization is seen as engaged within their community. It’s hard for some to understand that time spent in the wild is often more valuable than clocking time in the office, but if the organization allows this person to show up without limitation, everyone wins. The new community member feels the innovative energy and brings more intrapreneurial vibes into the organization, while the community benefits by having another trusted organization in the mix.

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“The way we make things better is by caring enough about those we serve to imagine the story that they need to hear.” -Seth Godin

If you’re reading this, you may be tenured, but it’s unlikely you’re tired. That said, we’ve all found ourselves in a motivational rut or lacking a clear sense of purpose. Along with a few solid sleeps, when I feel the urge to settle, it helps to have fun, build into other areas of your career portfolio, take a few days to rest if necessary, and then get back into the startup community. This creates opportunities to #GiveFirst, ask for help, or get extra curious about the creative work of others. Soon you’ll find new opportunities to collaborate.

New connections that emerge can bring you out of the motivational rut. They can boost your care meter and will add fresh personality to your work. Along with sparking fresh direction(s), you’ll be motivated by others and soon find new ways to be generous with your art. If you’re still thirsty for motivation after tapping into the entrepreneurial ecosystem, I’m here for you as well. Together, we can refuel the idea machine to avoid wasting any more time with being tenured, but tired. Sleep when you’re dead, my friends. Let’s keep building.

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“There will come a time when you believe everything is finished. That will be the beginning.” -Louis L’Amour

By Ben McDougal, ago

Venture Studios

Venture studios work with different startups to activate a portfolio of ideas into reality.

They invest financial capital, then use a long-term lens to enhance the chance for traction by pouring resources into each startup they invest in. A compounding collection of services are provided within these funds and full access helps everyone building together, often in sprints.

The compressed nature of the building process makes venture studios somewhat comparable to accelerators, yet with an extended, almost open-ended timeline. This emerging model can also be used as a form of due diligence for venture capital funds. While there’s still a lack of standardization and wonky economics have some investors questioning the long-term mechanics of such an approach to investing in startups, it’s no surprise that the innovation economy continues to drive fresh approaches to raising financial capital through the art of supporting entrepreneurs.

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This caffeinated contribution was written by Miles Dotson. I met Miles through mentor madness with Techstars. We bonded over our shared interested in this emerging approach to supporting entrepreneurship. Miles co-founded Devland, which is an investment company that focuses on new innovative ventures with brilliant technologists and wildly underestimated entrepreneurs. Devland provides an alternative mix of investment pathways for committed entrepreneurs with program guidance and direct funding through Series A.

The builders venture studios can attract, do not always have familiarity with venture capital and the language of finance. Whether you call them venture studios or startup studios, the word “studio” gives them the sense that there is a seat for them, regardless if they have a passion for a new idea or if they have formed initial traction. Terms, timelines, and investment theses vary between venture studios, as they should, knowing each company and fund provide different strategic values. After years of experimentation, our team is currently using the venture studio approach to conduct due diligence over an average of 14 months, working alongside builders, getting in the trenches with them, and advocating for their growth. This provides a much better gauge of the entrepreneur as a corporate builder, leader, and team builder — further validating our cause to invest and market them to firms upstream from us.

To bring this short intro to venture studios together, we can think about this as a validation-led approach to venture capital. The intention is to discover outsized returns from potentials who do not generally have network into the world of capital, relationships, and resources needed to build a market leading business. We are operators, product leaders, and venture capital thinkers who understand the role startup creation plays in the market. Our goal is to illuminate repeatable paths that often result in early acquisitions, stable long-term growth, or public market entry while improving the average cost required to create that outcome.

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This has been a fun little series, brewed around a few interesting actors within entrepreneurial ecosystems. There are many more key actors, factors, and instigators throughout any startup community, but we hope you’ve enjoyed this sip of awareness around Accelerators + Incubators + Coworking + Venture Studios. As always, subscribe to Roasted Reflections and stay tuned for what’s being poured next week!

By Ben McDougal, ago

Incubators

Incubators warm you up until it’s time to hatch.

They are similar to coworking spaces, but incubators often focus on entrepreneurial education. This developmental focus attracts newer entrepreneurs and has incubators most often found in educational environments, with semester or year-long programs. Incubators can also be found outside educational environments. Public incubators may have less rigidity, but there’s still urgency that most entrepreneurs benefit from. The timelines of an incubator are not as compressed as accelerators, but there is usually a beginning and an end to these programs.

This rotational nature of incubators provide a cyclical, yet stabilizing effect within startup communities. Entrepreneurs working through incubator programs become stronger founders eager to stay connected. As founders transition out of an incubator, they add human, intellectual, network, and cultural capital to the entrepreneurial ecosystem. Their departure also makes room for the next class of entrepreneurs eager to develop a business within the incubator.

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Wondering how your business should evolve? Work around other entrepreneurs.

Another common draw of an incubator, is less expensive office space. Low rent alone attracts early tenants, but here lies the motive for many unhealthy incubators. If an incubator is only about cheap office space, the lack of heart will suck the cool right out. A fixation on cheap rent leads to less interest in helping entrepreneurs. This leaves floundering tenants starving for community. As cultural starvation occurs, entrepreneurs migrate and programs fail.

Incubators must be safe cocoons for less experienced entrepreneurs. They should allow entrepreneurs to repeatedly test, fail, and improve alongside their peers. With a supportive space dedicated to nurturing the entrepreneurial spirit, incubators allow connected entrepreneurs to hatch fresh ideas ready to fly.

By Ben McDougal, ago

Accelerators

Accelerators are incubators on steroids.

These programs recruit scalable companies that have shown early promise. They coordinate dramatic transformation within a compact timeline.They are like early-stage investment firms, as they provide seed funding in exchange for equity. Accelerators hedge bets by connecting entrepreneurs to resources, mentors, customers, investors, and community allies.

The rise of the accelerator model is interesting. Accelerators help entrepreneurs build stronger companies, but they need money to function. How do they support the financial investments in each company? What about staff salaries, community events, and all the resources they provide? There’s usually an initial fund raised to start these programs. Some accelerators also have financial infusions from sponsoring organizations. With this financial foundation in place, accelerators then depend on the performance of the companies in their portfolio. When a portfolio company is acquired or exits, the accelerator’s equity converts to cash or ownership options in more successful businesses.

As an accelerator’s portfolio performs, its reach widens and the program prospers. This motivates program directors to pick the right companies. It also gives founders the confidence that the experience is built for them to succeed. These complementary relationships are how accelerators make a lasting impact in less time.

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Incubators vs. Accelerators vs. Venture Studios vs. Coworking

For entrepreneurs, so much potential makes it easy to fall in love with the idea of being an accelerator-backed company. As business owners consider applying to accelerators, it’s important to understand the terms. When startup accelerators first started in 2005, they were industry agnostic. As this collaboration-based investment strategy has evolved, industry-specific accelerators have also emerged. This means there are more accelerators than ever and not all of them will be the right fit. The educational, networked, and cultural experiences matter. Entrepreneurs must vet accelerators like they would other equity investors. Do terms of the accelerator align with the long-term goals of your company? Will the implied results outweigh an intense time commitment? Even if it’s temporary, will the team be required to relocate? How deep is the network of fellow founders who have worked through the accelerator? Do portfolio companies stay connected? If so, how does that connected landscape support your work beyond the program?

The accelerator experience can be life changing for a startup. Based on a deep understanding of each company, these action-packed programs #GiveFirst and help build on what’s working. They also quickly identify areas for improvement. This empathetic support combined with a shared mission to grow allows accelerators and their portfolio companies to be more successful as everyone collectively builds to go big.

By Ben McDougal, ago