Minnesota Startup Community: The Time Has Come For Less Talk and More Walk

“I wonder what the conversations will be like a year from now.” This is a paraphrase of a statement Doug Pollei made at the recent MinneBar hosted by Best Buy, which he said to me at the end of a startup session led by Luke Francl.

I heard some folks say how they look forward to a year from now to look back and see what has been accomplished within our startup community. I did not take the comment that way.

Most days and in most ways I am an optimist — my glass is half full and usually running over. Want proof? I have been attending Gopher football games for 28 years. (Or, hmm…maybe that makes me something other than an optimist?)

During this particular session at MinneBar there were many thoughts on what could be done to support, make better, and grow our startup community.

I hate to be one the one to rain on the parade, but almost all of those things were suggested in May of 2008 at the last MinneBar, and very few if any have been acted upon, nor have any noticeable results been achieved.

Hence the title of this post: we need to stop talking and start walking.

(EDITOR’S NOTE: We welcome guest blogger Paul DeBettignies for this post.  Please tweet your questions to @Minnov8 now so we can answer them on our Minnov8 Gang podcast tomorrow,  on which Paul will be our guest.  Please add the hashtag #MNwalkthetalk.)

Oh, I hear you now. Many of you are saying, “But Paul, I do not have time. I have a day job, plus my ideas I am working on. No way can I fit something more in, to help my community.”

Here’s my reply: “You (we) cannot afford NOT to.”

Our community is fragmented and siloed. How do I know? Luke asked those in the session who were leading a startup to introduce themselves. After the session, all I heard was, “Who was that guy? I don’t know him.”  And that was if you were fortunate enough to even *hear* these entrepreneurs introducing themselves. I was in the fourth row and could not hear 80% of the people introducing themselves. For the love of Goldy Gopher, these folks were in a room of their peers — this was not a time to be shy!

Luke asked what is the difference between Silicon Valley and Minnesota startups. I tweeted something like, “In Silicon Valley, they stand up on their chairs and scream. In Minnesota, they whisper.”

What really made me almost spontaneously combust was the number of startups saying they could not find people to work with them. My response to one entrepreneur was that I needed a racquetball. He asked why and I said that, because when I throw it, someone will get hit in the head, another in the shoulder, it will land in someone’s pizza, and then tip over a Mountain Dew onto somebody’s lap.

Those were the first folks this guy should talk too.

How can you be hiring, be in a room of tech professionals, and not mention you are hiring?!  That is crazy (among other things).

Minnesota meet passive aggressive.

There are good things going on in the Twin Cities of Minneapolis and St Paul.  Here are a few:

Social Media Breakfast Minneapolis St Paul (SMBMSP)
Rick Mahn had heard about how a group of social media, PR, and marketing folks were getting together in Boston. He contacted Bryan Person and asked if an event could be done here. It was suggested to Rick that he start a group, which he has, and it’s now the longest running and largest Social Media Breakfast group in the country.

Coworking
This summer. I heard something about coworking but I had no idea what it was. Then, in November, I heard that a group led by Amy Bryant and Zack Steven had space one day a week at Crema Cafe. In the weeks since, Don Ball has opened CoCo, and Zack has started 3rd Place.

Minnov8
I am not including the guys and this site because they are posting this rant of mine.  This is a group of guys who saw a need to showcase Minnesota innovation, including our startup community, and they did it — all the way back in February 2008.

TECHdotMN
I’ve had a few conversations with Jeff Pesek, who’s also working on highlighting the local startup scene, to include a calendar and maybe a job board.

MN Lean Startup Group
I was referred to this LinkedIn group and, from what I have seen, it’s a group of local tech people who are networking and sharing experiences of bootstrapping early-stage companies.

MinneDemo & MinneBar
Back to how this rant started.  What was once a few guys doing demos has turned into must-attend tech events, where hundreds show up.

I point out these people and groups because we do not need to have a mass inflow of cash, advisory groups, etc.  We need people to take action.  We need people to better communicate with each other.  We need more meetings and events.  We need more sharing.

We need to be an actual living and breathing community.

Here’s what I want to leave you with:  If we do not take advantage of the organic activity going on in our community, if we do not help it better grow, and if we do not start working to achieve the “wish list” from the last MinneBar, we are going to lose a fantastic opportunity.

Two years from now — or whenever it is the economy will be clipping along again — we’ll all be really busy trying to maintain what we have going on.  At some point (maybe the next recession), a group of people will get together, have the same conversations we are having now, and say we really messed up by not doing this back in 2010.

So, let me start by saying here’s what I can do to help:

  • Facilitate sessions on how to recruit, hire, and retain employees
  • Facilitate sessions on networking, career, and job search
  • If someone were to build a job board, I can moderate, promote, and grow it
  • Until a job board is created, I will post tech jobs for free on my blog

My challenge to you is this: what can you do to help support and grow the Minnesota Startup Community?  Have at it — let’s hear your comments and questions!

(EDITOR’S NOTE: Please leave a comment below, OR tweet your questions or comments to @Minnov8 now, Friday 1/22, or tomorrow morning up until about 9:30 am — so we can address them on our weekly Minnov8 Gang Podcast, on which Paul will be our guest.  We start recording at 9:00 am. Please add the hashtag #MNwalkthetalk.)

Paul DeBettignies is Managing Partner of Nerd Search, LLC, a Minneapolis IT search firm, author of the “Minnesota Headhunter” blog, cofounder and coordinator of Minnesota Recruiters, listed as a Top 20 Minnesota Social Media Innovator, and a frequent speaker and article contributor on recruiting, career, networking, and social media topics with his related site, “Be Your Own Headhunter.”  He may be reached at paul (at) mnheadhunter (dot) com.

Comments

  1. says

    Cold Start is an effort to do 2 things:
    1) Connect members of MN tech startup community together on a regular, informal basis – in an effort to get greater exposure for all the startup projects happening locally.
    2) Publish podcasts highlighting our entrepreneurs and diving into their efforts to build our startup culture.

  2. says

    Right on Paul! Thanks for mentioning me and the 3rd place. There’s no satisfaction without action, and I’m encouraged by the activity I’ve seen/been a part of this year. One of the drivers behind opening the 3rd place (http://the3rdplace.us) was creating a space where conversations and action could happen in the tech startup community. Profound things happen when people spend time together, or happen to bump into each other, as is happening already at the 3rd place.

    I’m a proponent of the Lean Startup methodology and we have a lot to gain as a community by executing more quickly and sharing both our successes and our failures. I’d welcome the chance to host a group or conversation at the 3rd place, but what I’d most like to see is people coming in here and building things and learning from each other.

    Cheers,

    Zack

  3. says

    I’m gonna jump in right now with my main question for tomorrow’s podcast:

    Shouldn’t we be doing more to spread the word beyond our borders, to get more people *nationally* interested in the MN startup community – instead of just talking so much to ourselves?

    I mean to build bridges with other tech hubs around the country, whether with VCs, angels, media, events, et al…

    • says

      “Shouldn’t we be doing more to spread the word beyond our borders, to get more people *nationally* interested in the MN startup community – instead of just talking so much to ourselves?”

      BINGO!

  4. says

    I can’t help develop your network in Minnisota but I can offer a bit of help, advice or two cents, if you like:

    1) Make sure everyone understands clear objectives and goals for the group.
    2) Communicate to everyone that they need to think about how their day to day activities align with the groups objective & goals.
    3) AND to ask themselves how the group can help them and how they can help the group.

    Once this exercise is complete, everyone needs to develop a list of their own questions and these questions should be asked at each meeting… BRING QUESTIONS IS THE #1 RULE: How can I help you? How can you help me???

    Too often these groups end up being the same old people with the same topics of conversation. WE need to connect the dots better and great organizers always set the agenda.

    Food for thought…Cheers Ron

  5. says

    Great stuff, Ron – thanks! Asking “how can I help you?” is the classic way to end a networking meeting with a new colleague. And it can’t hurt to remind people here in MN that they should be saying that regularly…

  6. says

    I’m delighted to see this issue raised beyond the informal whispers it usually is. WE DO have a start-up culture here in MN, but it’s so drastically different from “the valley” that everyone compares anything to that many don’t realize it.

    Paul is spot-on that we don’t promote our achievements, or more specifically, our ideas for other folks within our own community to know what’s going on. We need our entrepreneurs to be more active and energetic. We need to help them build excitement around the great ideas our community develops.

    We had an opportunity to talk with Thomas Knoll on the SMBMSP podcast last night (will be posted soon) on this very topic. The main observations we came away with was the differences in culture that may be limiting us. Our Midwestern culture of holding back critical information – the Minnesota Nice aspect or fear of someone stealing our idea – that would allow our peers (the people who are most favorable as a sounding board) to give us critical feedback on ideas.

    One of the aspects of SMBMSP is the ability to connect on a national scale. This is one component of networking that Mykl Roventine and myself will be doing in 2010. Helping promote and draw attention to technical and social innovation in Minnesota.

    Already over the past two years the activities of active folks here in MSP have drawn enough interest nationally that people want to learn more. Who want’s to connect on a larger scale? I know I do.

    So guys, here’s my question for the Podcast:

    “Why don’t entrepreneurs and start-ups seek out the organizations and outlets that can help them spread the word? What can we do to help them know what we do?”

  7. says

    I’m doing it, I quit a damn good job at SierraBravo.com to start ComfyChairConsulting.com so I could work on my startup ideas and fund them through custom web development.

    My fear of failure was overwhelmed by my fear of never taking a shot.

    We’ve setup our caffeine to code conversion systems at CoCoMsp.com and it’s been great.

  8. says

    I’m lovin’ this discussion! Can’t wait for our podcast in the morning with @MNheadhunter …

    Thanks to Rick, Robert, Zack, and Justin for weighing in. And, Rick, right on about “connecting on a larger scale”!

  9. says

    I do think pockets of innovation will not just come from the coasts anymore (SFO, NYC, DC, LA, SEA, BOS) and will come to the middle including MSP, CHI, AUS. In MSP we have the largest ability to beta test anything with the amount of customers attached to the F500s here in the city.

    With the latest investment in Alvenda, I am feeling things shifting locally. On another note, I feel lucky to get to see innovative communities in action traveling to SFO, LA, and DC each month. Now the community here must share and work more together. I suggest everyone read the TechStars article of how Seattle transformed http://asack.typepad.com/a_sack_of_seattle/2010/01/why-techstars-seattle.html . It is a great read. Also watch what Calacanis is up to with his TWiST and Angel Networks crossing the country.

    Go MN.

    • says

      @Doug All due respect, but I wouldn’t read too much in to the Split Rock / Alvenda deal. First of all; it’s a stretch to call $5 Million a Series A round. The founders of the company effectively self-funded the company through typical series A financing needs. Secondly; Quick, give me the names of 5 local Internet technology startups that Split Rock (or any other VC firm/group) has done deals with in the $500K – $1M range in the last 2 years? I’m talking initial capital, not follow-ons.

      The fact is that Split Rock is interested in companies that have already wrung a certain amount of operating risk out of their business plans. And we shouldn’t be pointing fingers at Split Rock, seed stage deals are not their niche. They’re not responsible for funding MN seed stage deals if it’s outside of their internal guidelines/investment objectives.

      The MN ecosystem needs seed money, and more importantly, mentorship from what Brad Feld calls “relevant wealth”. That’s the most important element missing in MN right now. I encourage everyone to read this article if you haven’t already: Why You Should Start a Company in… Boulder http://www.fastcompany.com/article/why-you-should-start-company-boulder?partner=rss

  10. says

    Paul!

    Great kick in the pants. There is a reason the first word in startup is start!

    Honestly, the talking part is helpful. Out here in SF, I LITERALLY can’t get on a bus, sit in a coffee shop, or walk down the street without hearing a group of people talking about their startup’s ideas, their failures, their experiences, their breakthroughs. Right now, at Cafe La Boheme, I have a 58 year old guy to my right tweaking his Ad Words campaign, and a hipster couple discussing the UX of their product site, and who they know who can help improve their conversions.

    The talking is helpful. Especially when that talking is the thinking out loud process of the doing.

    What i appreciate most about this post is that you lay down the tangible next steps you bring to the table. In that spirit, here is what I can bring to the community:

    * Connect MN startups with advisors, VCs, and entrepreneurs I know in the Bay Area
    * Do what I can to tell the story of the MN startup culture to SF
    * I would *like* to co-found a MN startup in 2010 and add to the ecosystem
    * I don’t have many answers, but I’m really good at asking probing questions. I would love to help out MN startups with the services I provide to bay-area startups in the line of customer development and community cultivation.

  11. says

    Having had experience in the MN startup community and now in San Francisco I can tell you that the problems/challenges in MN are not A) Lack of exposure for existing startups, nor B) Lack of “national” attention.

    #1: There are fundamental structural components missing from the MN ecosystem that are absolutely necessary to get and keep the flywheel moving. Without addressing these issues ANY other efforts will have only limited short-term effects.

    #2: There are people that are effectively acting as barriers to progress (either actively or passively) through their desire to control groups, organizations, etc.

    This is not an entrepreneur problem, or a funding problem, or a lack of exposure problem. And neither incubators or accelerators will save the day. An entire ecosystem and mindset has to be rebuilt from the ground up in order to give local Internet entrepreneurship any chance at real success.

    The good news is that the Twin Cities has most of what it needs to make this pivot. But somebody has to absolutely OWN the effort. I’m talking about 1 or 2 talented/experienced people who are willing to make this their life’s work for a couple years.

    I am happy to contribute in any way that I can to help move this ball forward.

  12. says

    I’m going to call bull on this post. There’s no lack of ideas and sharing going on here. There’s a lack of bandwidth on execution, plain and simple. I’ve been trying to get development resources for months, but they’re tied up.

    • says

      Hey Paul, what about Odesk or Elance for that work? I can tell you for a fact that lots of startups in SF use those two as their interim dev teams. It’s often as hard to find engineering talent out here as it is in Minne.

    • says

      Paul, I think it’s largely a matter of connecting the various groups in town. I mostly run in developer circles, and I’ve had no trouble finding partners, contractors, and employees in technical or design roles. From my perspective, Minnesota doesn’t have a lack of development resources, and in fact, that’s one of the stronger areas of the local ecosystem.

      • says

        Hi Jon,

        How’s Tumblon going BTW? I agree that MN doesn’t lack in development resources. It’s more about finding the right talent that shares your vision. I’ve come full circle in my thinking about angel funding. It’s nice to have, but w/o a working prototype, very hard to get. This is where I think a Y-Combinator for MN would be the best start in vetting ideas and prototyping them quickly. Joesph Rueter suggested this at the last MinneBar. I tend to agree with his assessment.

  13. says

    I could not agree more with most of the comments on this site. I have to say that we need to get out of own way. I have to give a huge kudos to Refactr on their no more NDA policy and one for Jeff above on the let’s not keep secrets or control groups. My policy has always been to share openly and freely and tell everyone about what I am doing as that is the best way to find those undiscovered opportunities.

    I also agree that MN is lacking some serious fundamentals when it comes to fostering a start-up community. Let me list my 2-cents:

    1. Where is the University of MN? Seriously, they are no where to be found when it comes to supporting the local community let alone churning out new companies based on their research. Please, please try to model the WARF after UW – Madison.

    2. Where is our state government? Really should it be that hard to pass an angel investor tax credit? They talk about job creation, small businesses, etc but there is not one piece of legislature that supports start-ups outside of the above mentioned tax credit.

    3. Where are our companies? With 3M, Medtronic, St. Jude, Target, TCF, Cargill, General Mills, Carlson Companies, and so on and so forth?

    4. Where are our start-up mentors from those successful start-ups we do have? Those that have had success or having success, what are they doing to give back to our community?

    We seem to have a tremendous amount of engagement from our creative, marketing, PR, and Legal Communities, but how about a formal program that donates time to start-ups to assist them.

    One of the best things about TechCrunch and Y-Combinator is not the $15K you get for a summer of work, but the $100k’s you get in free advice and consulting work from those willing to give back.

    I have a small company called Activ8. It is not ground breaking technology, it is not a new idea, but I think I can outsell and out market to others to the niche that I am targeting. I would love help from our local experts on how best to structure my legal entity, how to set-up my merchant account, how to create buzz for my product, how to maximize concepts like SEO, how to generate leads, how to develop a salesforce… You name it. I would love the help. So where are our mentors?

    • says

      @Marc Agreed on all counts, you’ve called out virtually every spoke of the ecosystem wheel. The mentorship element especially re my earlier comment citing Brad Feld and “Relevant Wealth”.

    • says

      Yes some how we need the purse string holders realize the community that is surrounding them and if that means a couple of exclusive events or meetups to share ideas and they feel the passion we do that is ok with me.

      Some how we need to get to a couple of these high level purse string holders at the major universities and corps in this town to come and talk and share ideas with the grassroots start up companies, after all yes they might be competitors, but guess what we are also customers of most of these companies……

      Thank you Andrew Eklund for the discussion we had in regards to this topic. It really put into perspective that after any conference there needs to be economic or participation increase in the 20-30 percentile to be truly measured as an effective conference.

      We also need to do some high volume work with lower cost entry points for the thousands and thousands of small businesses, community organizations and non-profits in and around us…..there is a blog post coming on this actionable initiative

    • says

      @Garrick The challenge is that VCs/serious angels don’t fund side projects or lifestyle businesses. It’s ok for a project to start as a side project, but no professional investors are going to fund a guy/team that hasn’t already proven that they’re 110% committed to their project by quitting their day job and making a go of it.

      I’ll tell you from experience out here anyway, if you try to pitch a deal and you still haven’t quit your day job you are absolutely dead in the water – game over.

      I think this is where the mentorship/seed funding gap exists in MN, helping people and plans move from stage to stage. It’s a more involved challenge but ultimately solvable.

      • says

        Jeff – I don’t believe the vast majority of these projects need VC or angel funding. Nor do I believe that should be the metric of success. Many of the organizations I think the most highly of didn’t go after institutional money _until_ after year 5. After they had customers paying for an established service offering.

        • says

          Hey Garrick – good to talk to you as always. Just curious, which local organizations are you referring to? I don’t know many people that can bootstrap a company for 5+ years. And while I agree that funding in and of itself may not be the absolute best metric, without funding there are no metrics worth paying attention to at all. I think that’s primarily why we’re back talking about the same issue year after year after year.

          Also, it might also be a good idea to define what sectors we’re talking about. Bootstrapping side projects that ultimately become lifestyle businesses IMO isn’t what we’re talking about here. They’re fine endeavors, but in this context I think we’re talking about the need for an integrated local ecosystem that supports good ideas while the teams find and refine product/market fit, and then gives them relatively friction-free access to the requisite talent, mentors & growth capital they need to scale as rapidly as the marketplace adopts their products/services.

          To be clear, I don’t believe it’s smart to aspire to be “Silicon Valley lite”. It’s never going to work (as several other metropolitan areas have discovered). In the consumer Internet sector especially, here’s what you’re up against – “Why You Need to be in Silicon Valley”: http://startupboy.com/2010/01/17/why-you-need-to-be-in-silicon-valley/.

          And I agree with what Dan Grigsby said on your recent ColdStart podcast; That there are simply some fundamental human resource pieces missing in the local ecosystem at the moment – like a solid stable of Product Managers. I am 100% in agreement with Dan on this point.

          I think one interesting course of action might be to figure out what unique assets the Twin Cities has at it’s disposal, where you can create competitive advantages relative to other tech centers given those assets, and then start experimenting with a few ideas. Mpls/St.Paul has a whole lot of good people to start that process if it makes sense.

          In this respect I think there’s much to be extracted from Eric’s Lean Startup principles. Maybe the most important question that needs to be answered right now is; What is the correct product/market fit for the Twin Cities tech community as a whole in the larger national/international tech marketplace?

          Very much looking forward to the Minnov8 podcast tomorrow (Sat).

          • says

            Perhaps we can expand our view to include startups outside of internet technologies. I’m not sure restauranteurs have the same drive for venture funding or do the dozens of craft breweries that are popping up throughout this region.

  14. says

    J. Pester,

    You’ve diagnosed the illness but have’nt given any solutions to the problem. I’m interested to hear exactly what you think is holding the startup community back and how to fix it.

    I can tell you I’ve had a lot of friends who worked during the dot com boom and bust and ten years later, many are still hesitant to work for a startup. In this poor economy you’ve got to have a solid gold idea to get people to invest their time and money into your project.

    In this climate we need to develop new and innovative approaches to get companies up and running. I like the idea of coworking and shared spaces, where you can combine resources to reduce your overhead while you’re working to get your startup going. We need to get people in our community to chip in by volunteering time and energies to the startup of their choice. It’s strange to me people are willing to volunteer to help homeless people, but scoff at the idea of helping a local startup by volunteering their time to do some coding.

    p.s. There was a Gopher football game the day of MinneBar and trust me, Paul didn’t miss that game either.

    • says

      I have lots of thoughts on both the current situation as well as possible remedies. It’s just that after beating my head against the wall for several years I thought it would be better for my long-term mental health to relocate to Palo Alto and start swimming with the current rather than against it. Mission accomplished :)

      That said, I’d like to offer my help if the group might find it of value in some way.

  15. says

    Great post Paul! And I am taking this post to heart and what Amy Bryant said @missrogue’s conf at Best Buy! She said Keith pick a couple of those ideas and make um work, everyone’s got ideas. She was absolutely right. Since then I have landed on 2 of them and 1 action.

    #mspbuycar & #sxswships! The action is whenever I see 2, 3, 6, 20 people that need to be connected, they are going to be connected by me and if I have literally have to physically have to bump them into each other!

    Oh and if you are a quiet person who is in the VC community hit me up I will make noise for you, trust me ask anyone I know how to make actionable noise!

    Thank you Paul litghting the fire under this communities backside!

    Oh and people stop complaining about inclusive exclusive these people those people events, just start showing for gobsakes there is something every night of the week! Take action and get talkin, get investin, get hirin, get actionin (ok I made that last one up)

    “2010 MSP NO LONGER A FLYOVER CITY!”

  16. says

    I think the concept about trying to get a developer for a partner on part ownership only works when you have a well established relationship based on trust, a shared vision and passion. Everyone of our developers in Minneapolis are approached about the next great thing and promised ownership on the entity. I still have all 100,000 stock options given to me by companies during the .com boom and guess what they are worth? If you believe in your idea and your not a developer, then find a way to pony up cash to get a working prototype. For a $3 – $5K investment you can get a lot of code written, especially if you invest the time to create mock-ups and requirements of what you want. Many may not agree with me here, but developers deserved to get paid. Money also puts skin in the game for everyone and keeps them all motivated to make it work. When you only have sweat equity, it can be way too easy to walk away if things get just a wee bit hard… which they will!

    • says

      I think this is the most honest thing said in all the comments thus far. I appreciate it, but it also helps exposes the problems in startups. People with talent want to get paid up front, with little risk. I understand that more than anyone. We’ve all experienced failure, and it doesn’t feel good. On the other hand, it’s part of the process, and you have to find someone that you can trust. Success means something different to everyone.

  17. says

    @Karl First of all, there are no “solid gold” ideas. Virtually all startups end up with a product or service that bears little resemblance to what they started out to build in the first place. Secondly, and more importantly, if you’re not willing to jump in to the deep end of the pool then you’re by definition not a true entrepreneur. And there’s nothing wrong with that. Different strokes for different folks. True entrepreneurs in most cases literally can’t help themselves, they pursue their vision without regard to criticism, opportunity cost, or fear of failure.

    As I said earlier, this is not an entrepreneur oriented problem, it’s fundamentally the result of an incomplete ecosystem.

  18. says

    Marc your question about those big companies are dead on! Assumption two big, too much command and control, too much argoance, too many lawyers, and too much culture that is not collaborative, organic and sharing in nature! Just try going into any of those companies as well as the U and talk about coworking, incubators, sharing ideas w/o an NDA and you will get a 35 foot snowbank of push back!

    • says

      @karl It’s more involved than a few paragraphs could justifiably cover, but I think Marc Kermisch has done a great job on touching on most of the key elements in his comments above. That starts to provide a framework from which we can begin to analyze the necessary pieces of the puzzle to determine what needs to be done and in what sequence.

  19. says

    I look forward to talking about many of these thoughts, ideas, and rants. Well played Paul.

    Let’s not tap dance too much kids…it still comes down to money. Money to start. Attention investors, it’s a START up! That means there aren’t customers/traffic/an audience for the product or service yet!

    I’ve run out of fingers and toes…in my entire family…to count all of the individuals or firms in the Twins Cities who need as little as $50,000 to “start”. Perhaps investing in many small ideas and people rather than waiting to spend millions would yield more profits in the long run.

  20. says

    As a developer/entrepreneur (well I haven’t quit my day job so I guess I am not an entrepreneur) who just moved out here 2 years ago from Washington DC, I gotta say things aren’t as bad as they seem.

    Positives:

    1.) People here are nice, very nice. Everyone who I have asked to have coffee with me has, and quickly.
    2.) There are some community events that really bring everyone together (there should be more but this is a positive).
    3.) There are people willing to help (Graeme, Garrick, looking at both you guys, just for starters)

    Negatives:

    1.) Seemingly less angel money floating around (in DC I remember getting called by my alumni program for a donation and meeting a guy on the phone who was an investor, completely randomly). It maybe I am just not dialed into this kind of stuff in MSP.
    2.) Definitely a fragmented community, the community seems to be centered around several of the large dev shops in the area, and I am not sure how much devs from the different shops mix. Plus there is no one coffee shop or bar everyone goes to (which would be more silicon valley’esque where everyone has a startup).
    3.) Getting the word out nationally for Minneapolis projects seems to be difficult (building on what Graeme is saying).

    Personally my biggest problems has been either finding seed capital to build the parts of projects I can’t build (which is not a lot, b/c I am a developer), or, in the same vein finding people to help with projects where I don’t have the skillset to finish them. I don’t have the money to hire someone to help, and all my tweets and talking to folks have been in vain (in case anyone wants to know I need someone to help with UX development of a project of mine, that has held me up for almost 2 months).

    I don’t have any answers, but I think 3 things to start would be awesome:

    1.) Reliable seed funding (incubator, angel, I don’t care)
    2.) Informal hangouts for developers and web geeks (it is a big 2 cities, we need to sort of designate spots, though this ruins the informality). Maybe these are the co-working spots, I need to check them out.
    3.) A nationally recognized conference here. We need to get our name out and draw in national figures to see what is going on in MSP.

  21. says

    Love it when the comment string exceeds the value of the post, and the post was solid. I appreciate and get motivated by those weighing in here.

    Looks like we’re getting some clarity by getting things on the table with outside experience weighing in on what they see missing and locals broadcasting the challenges or successes they’ve had. Best of both worlds and maybe a true picture.

    Next steps seem to be starting here too and I can’t help but think that those involved in this conversation can help structure an attempt to do something different with it. The cry for Midwest start-up attention has been in effect down in Omaha and surrounding for a bit with http://www.siliconprairienews.com/ and a few guys (Jeff & Dusty) leading the connection and publicity charge. Maybe this is another set of pieces to learn from … and maybe that’s why things like Tech.MN come to life.

    So what person, group, meeting, location, idea can start to connect the mentor and the money end that is missing in the loop? We know a few things about snowball effect in MSP, who can get this one rolling? Or did you already Paul?

  22. says

    Back in 2008 I interviewed Dick Sommerstad, the guy running “The Front Door to U of MN” and was taken aback by his adamant position that THE problem in MN was that seasoned tech CEO’s wouldn’t come here since — if the gig didn’t work out– they’d be stuck without dozens of other startups to go to.

    Though I thought he was full of crap and diplomatically argued a counter-point, it made me think about MN’s depth of talent, how vibrant our startup community is-or-is-not, and whether VC funding is hampered by leadership talent pools.

    I throw that out not as my position, but rather for discussion.

    • says

      @Steve My anecdotal experience with the “U” 3+ years ago was a complete clusterf*ck. I started when I discovered that they had some collaborative filtering technology that I thought might be an interesting fit for my then current project. I contacted John Riedl (who was great btw) and came in for a short meeting. I mentioned that if the technology was appropriate and we could come to an agreement on licensing fees that we were also interested in employing some CS and EE students from the U to help us with both the integration and related proprietary software engineering.

      John stated that indeed this might be a good fit, but that I needed to start by contacting the “Electrical and Computer Engineering Office of Technology Commercialization & Transfer”. And then the nightmare began. You see, that department is set up to do business with large corporations, not startups. Their message to us was essentially that we were too small to be worth time. They told us to come back when we had a “meaningful revenue flow” that would guarantee a multiple year licensing deal. Needless to say that was my last meeting with them.

      • says

        @Steve With regard to “depth of talent”, it certainly can be an issue in some cases. But it’s absolutely not the reason that more startups aren’t getting spun up.

  23. Nate Kimmons says

    Another good read is Fred Wilson’s (Union Square Ventures) blog post about the same issue(s). His take is why start a company in NYC – http://bit.ly/5FuJVV.

    Also, good mention above about Open Angel Forum (Jason Calacanis). Boulder, CO is hosting the next event. Minnesota didn’t even make it on the list of initial local chapters.

    • says

      @Garrick I don’t think we’re here to talk about restaurants, craft breweries, etc. You have to decide on a vertical and focus like a laser on it if you want to achieve meaningful results. I think we’re here to discuss the early-stage, technology-oriented startup ecoysystem. Anything outside of that is a distraction.

  24. says

    1) It’s not impossible to find a very talented, experienced developer to participate for part cash, part equity. If you can’t, you either don’t have a compelling enough concept or you haven’t looked hard enough.

    2) It’s not impossible to start up here in the Midwest. I think it’s in some ways easier here with far less noise and bullshit than on the coasts.

    A big Shout Out to the guys at Minnov8, Social Media Breakfast, Garrick, Justin Grammens and all who supported our company, MixMobi, last year during development and private beta testing.

    Paying it Forward: If you’ve got a startup idea you’re trying to get going and you need an ear, a business plan review, perspective, or if you want to hear about our experiences so far, contact me at lisa@mixmobi.com. I am happy to help in any way I can. (I know that sounds sentimental and generous, but be forewarned: I have zero tolerance for WHINING.)

    Richard Branson: “Screw it. Let’s do it.” — Lisa

  25. says

    Wow, I turn in early last night and now wake up to this! What an awesome discussion Paul’s post has generated…

    Our sincere thanks to all of you weighing in! Great insights and questions.

    There’s no doubt we’ll have plenty to talk about on our (normally) one-hour podcast! Maybe this one will have to run even longer…

  26. says

    Upon further reflection, I think what we need is an increase in:

    1) Small teams of 2, maybe 3, who among them have the skills to build and sell an offering that can iterate several times and reach proof of concept or fail within 6 months (of FT+ effort) at a cost of $75k or less.

    2) Increased awareness of lean startup methodology and minimum viable products among local tech entrepreneurs

    3) Local seed stage investors willing to fund these initiatives

    • says

      @Zack Regarding your point #1: $75 is too much, neither Y-Combinator nor TechStars give out more that about $20K per team per session.

      That’s part of the reason they work, they help filter out who’s really serious. It’s like, “Hey, you compete with a bunch of other teams who think they have a good idea to get in to our program. We as experienced operators/investors will pick those that we think have the most interesting potential. You get a little bit of money and a lot of mentoring. Go.” If you’re not willing to work for something like $2k/month to live the dream then you should just keep your day job.

      So, for approx $250K you can fund your first class of 10 teams. Not including of course the time and effort of the mentors. But you have to have the right mentors. Again, back to “Relevant Wealth”.

      • says

        @Jeff Thanks for your many contributions to this conversation, and the links you’ve shared. I think your insights are right on – mentoring is key, as is skin in the game. That said, so long as the founding team has sufficient skin in the game it’s important to have the funds to focus fully on the offering and iterate a few times without having to worry about putting food on the table. $2k may go quite a ways for a recent college grad, but not so far for a home owner with kids. Maybe there’s a place for a new term: minimum viable compensation. In my experience startups underestimate their need for mentoring, and overestimate their need for funding.

  27. says

    Whoa  Mr. Kermish!  Where have you been all this time?  Good to see you hanging around these parts. :) 

    You’re dead on about your assessment of the lack of the u of MN’s, and local government support in incubating the MN start-up community.  I say, don’t rely on them anyway.  Start by surrounding yourself with like minded (entrepreneurial) people like this community, SMBMSP and Twitter for instance and you’ll find the nuggets your looking for. Many of us have different backgrounds and specialties (me Commercial Real Estate) but all have the same drive and focus. Feed off of that.  I always say “the smartest people in the world are the ones who surround themselves with smarter people than they are.” Embrace the challenges ahead.  

    Let’s do lunch again soon!        

  28. says

    Here you want a platform a voice your startup, VC, small company, looking for seed money, wanting help! Contact Andy Santamaria and let this guy interview you! His blog http://connectingmetoyou.com/ is the perfect platform for getting your word out.

    Openness is the key! If you collaborate there is enough to go around. Right now with the fragmentation and everyone trying to win alone we become a community of ideas. I have a feeling if we are adults about this we can get this community sky rocketing.

    Yes we need a national conference to come here. Why dont national conferences realize that if you have the right mix of national and local sessions and hands on connecting that they would sell out in a heartbeat.

    That is the whole concept of the #dreampanel there is a whole next generation of action leaders wanting to get their voice, ideas, and actions off the ground. Check out my list on twitter.com/keithprivette! You mean to tell me if we had that whole list of people for a conference we would not sell it out…….think about it. Yes these might not seem like the usual suspects, but that is the point these people are the 501, 601 level action leaders that would truly make a full fledged full circle interactive conference with real economic impact to their communities.

    Thanks again Paul for striking the match and throwing it on a pool of gasoline….i think I see the mushroom cloud from way out here in H20town!

    I could use something to pour my passion into……

  29. says

    Well put Paul! I couldn’t agree more.

    I have one other suggestion to offer up. It is time for the handful of local tech stars out there to start putting their money to work, and their knowledge. I would challenge fellow Minnesota tech entrepreneurs that have had serious financial success with their past or current ventures to start making angel investments to spur growth in the local tech community instead of just sitting on all of their good fortune. I would personally challenge each successful Minnesota tech entrepreneur to set aside a portion of their millions to help incubate tomorrow’s singles, doubles, triples and home runs. Most of the local tech start-ups out there need to be pushed harder to stretch their thinking. Many of the local tech start-ups are thinking too small. I have witnessed that the execution is actually not that big of a problem. Angel investors can be a guiding force to start pushing the start-ups harder. Challenge the status quo!

    Lastly, we are looking a creating a co-working space in St. Cloud on the main floor of the W3i building. If anyone has any interest, contact me. We have about 11,000 square feet of office space in St. Cloud.

  30. says

    Umm, wow is where I guess I start with this. Thank you all for takling the tome to comment and listen to the podcast. I do not have all the answers, heck I may not have many but one thing you can be sure of I want to help.

    I just did a blog post on MN Headhunter and am posting it here as well. I hope this is the beginning of a conversation and action versus a three day event.

    P.

    http://www.mnheadhunter.com/mh/2010/01/more-thoughts-on-the-minnesota-start-up-scene.html

    More Thoughts On The Minnesota Start Up Scene

    I am not exactly sure how to start this and many readers of the blog may need to be caught up on this topic.

    The short version of a long story is a I wrote a blog post that my friends at Minnov8 posted last Friday. It was an honest assessment of what I think about where we are as a tech community. I am a bit of an outsider but have a perspective that needed to be shared.

    I was really shocked at the reaction to the post which you can find by clicking Minnesota Startup Community: The Time Has Come For Less Talk and More Walk

    Lots of comments, Tweets and quite a few one on one and small group email.

    A lot of people are saying, “Way to go Paul!!!”. Well, I appreciate the acknowledgement but I already knew others were thinking this too. It just happens that I was the one to say it out loud at the right time and the guys at Minnov8 trusted me enough to post it.

    So the blog post was Friday and then the Minnov8 gang and I did this podcast Saturday morning Minnov8 Gang 64: “Less Talk, More Walk”

    Be sure to check out the comments on the first blog post as there are a lot of people weighing in with great ideas and opinions

    So now that everyone knows what I think (for better and worse) I want to lay out a challenge:

    We need to work together.

    There are a lot of strong voices who while want to get the ball across the goal line have different ways of doing it.

    To bring it back to Gopher football, some want the spread offense to come back. Others want the power run game. A few want the pro set we have now.

    Others are sitting in the press box giving commentary, a few acting as cheerleaders and a bunch of fans in the stands watching to see what happens. Some are supporting loudly, others waiting to get excited and more than a few with their arms folded, skeptical and unwilling to get involved.

    To some extent everyone has a role.

    My fear is that we have a lot of coaches, no head coach and no athletic director (these do not really exist in this scenario) and some people who would be like the board of regents who for the most part are not active, at least not visibly.

    We need the coaches to work together. We need them to play off of each others strengths and plug holes that exist. We need conversations to be productive and when we disagree we need to be civil.

    I will say this again, if we do not do this now we will in the future say we missed out on an opportunity just like many if us are now looking back saying the same thing.

    It’s time to move forward friends, are you going to play or sit in the stands?

  31. says

    You’re an asset to our community Paul, I will always appreciate your candor and passion. Thank you for mentioning TECHdotMN, although we are a bit surprised. Certainly there are others “doers” that deserve to be on that truncated list before us!

    We’re pleasantly surprised by the positive feedback we’ve received at only 23 days young. As we evolve, we’ll be rolling out new features that aim to consistently add more value to the Minnesota startup scene. We certainly have a long way to go in achieving our objectives but are all about promoting those who are “walking the walk.” For example, our “Local Startup Spotlight” podcasts feature homegrown entrepreneurs and technologists that are out there in the trenches, pushing the envelope – the ones down there on the ground level living it day in and day out. We feel that they deserve all the support they can get and strive to positively impact their initiatives – however microscopic.

    We recently started a new series focused on creating more dialogue amongst the Private Equity side of the equation. Tongue in cheek, it’s called “Unmask the VC” (props to Zach Robins for that one). Regardless of one’s opinions on the role of investment capital in our startup environment, we believe that more awareness from both sides of the equasion (entrepreneurs and investors) will advance our collective understanding of the situation.

    News, data, and actionable intelligence will be exchanged through our site on a hyperactive basis. This frequency isn’t for everyone which is why you can get TECHdotMN as it happens via Twitter and RSS, just our Podcasts, just our calendar of MN TECH events, or everything together in one monthly digest.

    We’re convinced that Information Technology will play an integral role in Minnesota’s economic viability over the next decade and we’re looking to connect with other individuals/ groups that share our passion and desire to see the Minnesota tech market achieve its potential. Those who share our values, understand intentionality, can roll up their sleeves and get dirty are welcome to join the party. Hell, we’ll even promote those in our space that don’t see value in our efforts or believe in the concepts of mutuality, reciprocity and collaboration!

    In honor of those who have come before us and those who have laid the foundation, we will bang the Minnesota Startup drum louder than ever before. I do have one question for tomorrow’s show: who’s dead serious about putting Minnesota on the startup map?

Trackbacks

Leave a Reply