Point: Business and communities can create a talent-attracting virtuous circle

Story: McKinsey & Co. partnered with the World Economic Forum to evaluate what makes a given region an “innovation hub.” McKinsey analyzed 700 variables and summarized the results in “Building an Innovation Nation.” Despite the report’s title, the principles apply to business and city regions as well.

The single common factor that drives innovation across all sectors is the availability of a well-qualified talent pool. Talent attracts talent, creating a reinforcing success cycle.

Let’s look at Boulder, Colorado to see these principles in action. Boulder is #1 in the nation for software engineers per capita. The tech community thrives largely due to the efforts of volunteers who organize regular meetings that let technologists find & talk with each other. Here are five examples. First, Rob Reich’s Boulder Denver New Tech monthly meet-ups are among the largest, attracting upwards of 350 technologists and entrepreneurs. The meetings feature presentations by new and emerging tech companies, who describe their business models and demo their software/products. Brian Tsuchiya’s Startup Entrepreneurs is another monthly meet-up, giving very early-stage entrepreneurs a chance to practice their pitch to a smaller audience and get feedback on their pitch & plan. Andrew Hyde’s Ignite Boulder events bring the community together in lighthearted events that are then livestreamed and archived. His Startup Weekend began in Boulder and is now in dozens of cities. Jeremy Tanner organizes unconferences like PodCamp Boulder. TechStars provides seed funding, office space to mingle and mentors from whom to learn. Local venture capitalists like The Foundry Group are active in sharing their insights through Boulder Open Coffees, presentations at Silicon Flatirons and mixers like StartUp Drinks. Local businesses like PR firm Metzger Associates are regular sponsors of many events. At all of these events, companies looking to hire and candidates looking for jobs can announce their presence.

Action: Help specialists in your community find each other through mixers and events. Create public calendars (such as Andrew Hyde’s Boulder.Me) to let everyone know about upcoming events. Share highlights of past events to give newcomers a flavor of them (see Rocky Radar and w3w3 Talk Radio). Participate in these events to find potential new hires and new business opportunities. Emphasize the resource-matching and idea cross-pollination opportunities of these events.

Ignite Boulder Feb 2009 by Stepan Mazurov

Point: Get to the Point Fast

Story: Jason Mendelson, Managing Director of the Foundry Group, gave the following advice last night to entrepreneurs seeking funding:

1. Send an executive summary, not a business plan – VCs are short on time. Grab their attention quickly. They don’t want to wade through a 90-page business plan at the get-go.
2. Know your business better than anyone.
3. Don’t ask for an NDA – that’s a rookie mistake. VCs look at so many business plans a year that if they signed an NDA, they’d almost certainly get sued.
4. Have a 3-sentence elevator pitch about your business ready if you meet the VC informally.
5. Be smart, but don’t be arrogant. Saying your product “has no competitors” is not believable.

Action: Do your homework before you approach the VC. VCs like Jason enjoy talking with entrepreneurs informally, such as at Boulder Open Coffees, but don’t have the fundraising conversation before you’re ready. When you are ready, be crisp and concise in your communication.

For more about Jason Mendelson, read his blog: http://www.jasonmendelson.com/wp/
Learn more about the Foundry Group: http://www.foundrygroup.com/
Join the Discussion at Ask the VC: http://www.askthevc.com/blog/about.php

“Entrepreneurism is not for the faint of heart,” said Roy Dimoff, Chairman and CEO of Viawest. Entrepreneurism requires seeing opportunity and having fortitude.

Point: Be Passionate, Positive and Practical

By their nature, entrepreneurs are passionate and positive. “Being negative about the future isn’t an entrepreneurial trait,” Dimoff said. “You have to think positive and see opportunities. A sense of humor helps, too.”

At the same time, however, Dimoff said that it’s important to contain the enthusiasm with practicalness. Many companies get in trouble because they “overextend their supply line.” For example, an optimistic entrepreneur may go on a buying spree, acquiring competitors or adjacent companies in a rush to expand, but not taking time to integrate the new companies into the fold.

Point: Do 1-2 Things Well

What opportunities does Dimoff see for small companies today? He sees many companies with good markets that aren’t being managed properly — and that spells big opportunity for small companies. “As a small company, you can do 1-2 things incredibly better than bigger companies,” Dimoff said. For example, Dimoff’s first company, Teleconferencing Systems Canada, competed with big guns like Bell Canada. “Bell Canada did a thousand things poorly. We did one thing — conferencing — well. We could deliver nuances that customers needed. People will pay a premium for that.”

Action: Pick a niche and develop solutions for that niche market.

Point: Clever Funding Ideas

If your company will be distributing a product, invite the manufacturer to fund your business — you’ll be helping them grow by distributing their product. That’s how Dimoff launched his first business.

Today, Dimoff’s Viawest follows that strategy in reverse: Viawest offers a deal to promising startups, giving them five months of free time to ramp up to application. In essence, Viawest bets that the companies will succeed and that they’ll become bigger customers. Viawest’s deal helps the young companies’ cashflow and earns their loyalty.