TheMetropreneur.com is built around providing a space to share resources and information about the extensive startup community in Columbus. The city shows tremendous support for small businesses and entrepreneurs through a variety of ever-expanding resources. As Vice President, Community Partner Ventures for TechColumbus, Rick Coplin is part of one of the top resources for startups in Central Ohio.
Coplin is an entrepreneur himself and uses his experience and know-how to offer support and guidance to Columbus startups. Through TechColumbus, he helps connect entrepreneurs with the resources needed to start and grow their business. Coplin also lends his expertise through his work with the Dublin Entrepreneurial Center.
His knowledge of the resources available to startups in Central Ohio is extensive. So, we recently asked Coplin to tell us the questions he is asked most often about what it takes to get a company or idea off the ground.
Q: What common mistakes do entrepreneurs make early on?
Occasionally entrepreneurs want to hold their ideas close, not disclosing any details, unless a non-disclosure is signed. An NDA is a no-no at early stages. The appropriate time is when a company enters due diligence with an investor. Reluctance to discuss your idea is usually the sign of an inexperienced entrepreneur and/or an idea with low potential. Hesitation to share a concept results in an idea being ignored or misunderstood. In my experience, reluctance to share is inversely related to the probability of success.
What you should do instead is talk to as many people as possible about an idea, solicit feedback from several potential customers, objectively look at competing options and consult with other experienced entrepreneurs. This vetting process reveals strengths and weaknesses and if you are attentive and coachable, the result is a refined idea with a greater probability of success.
Another mistake Entrepreneurs make is while they have great vision for their idea, they focus on the finished, market accepted product. Waiting until a product is “ready” for the market probably means it has been overthought and overbuilt. Even experienced entrepreneurs hesitate to release a less than perfect product believing they have one chance to be successful. The idea of one chance for success is simply wrong; entrepreneurs have many chances to be successful and increase their odds as they make changes in a product or service based on customer feedback.
What you should do instead is get something in the hands of willing beta customers as soon as possible to test your theory of what a customer will buy. In other words, developing a minimally viable product (MVP) that demonstrates the effectiveness of a solution or product for the lowest possible investment. Steve Blank recently wrote and article, An MVP is not a Cheaper Product, it’s about Smart Learning, which explains the purpose and concept of MVPs well. The key is to offer what customers will use, even if imperfect, and iterate improved versions that incorporate customer feedback and continuous learning.
One other mistake I commonly see is entrepreneurs who have invested substantial time and resources into building an idea without talking to any customers. This is a fatal flaw. Few ideas make it to market or enjoy market acceptance absent of customer refinements. If you are not talking to multiple customers before, during and after idea and product development, your risk of failure is exponentially higher than those who engage customers and incorporate feedback.
Successful entrepreneurs pursue customer input, seeking feedback from trusted potential customers and enlisting beta-customers. You should be constantly talking with as many customers as possible, identifying areas of acceptance and resistance to an idea. Finding out what might work for your customers is the first step in selling your product; so don’t build a thing before you’ve talked to 100 potential customers.
Q: What Funding Mistakes Do Entrepreneurs Make?
One of the most common funding mistakes entrepreneurs make is believing that funding is required to get started. The idea stage is highest risk; the likelihood of failure or non-start is highest, and investors are seldom interested at this stage. The idea stage is when an entrepreneur uses his or her own funds or funds from the three Fs – friends, family and fools. The 3-Fs are unsophisticated investors; investment decisions are made based on relationships and emotion rather than analysis or an understanding of risks. So, if you must have funds, your own pockets and the 3-Fs are the early sources. Professional investors (Angels, Venture Capitalists, etc.) will typically want to see prototypes and initial customers before considering an investment.
You should simply start pursuing your dream and figure out how to move forward without funding for as along as possible. A good resource for moving forward absent funding is Unfunded by Nick Carter, the founder of – you guessed it – the unfunded AddressTwo. Build as much as you can – proof of concept, beta product, etc. – and prove that customers will pay you for it before attempting to raise funds. When customers start paying and the number of customers begins growing steadily, investors get interested.
A related mistake entrepreneurs make is not learning how funding works or understanding regional differences in funding opportunities. For instance, investors are fairly conservative in the Midwest. Big investments in ideas like those popularized by the media really do not happen in the Midwest.
Serious entrepreneurs should invest their time in understanding the various stages of a business and the funding available at each stage. For example, setting up a meeting with a venture capitalist at a time when you have no sales and no clear path to market will not result in an investment. Similarly, approaching a bank to fund your app will be fruitless absent of collateral and business assets. Become a student of money and seek out experienced entrepreneurs. The more knowledgeable you are, the better opportunities you will make for yourself and the more likely you will be able to raise the right money at the right time.
Another common mistake entrepreneurs make related to funding is failing to construct a realistic business model, mistakenly putting the bulk of creative energy into the end product. In addition to your wonderful product, you must consider what customer segments you will reach and why they will buy. Figuring out the value proposition you offer customers, the channels you will use to reach those customers and the types of relationships you will have with customers or segments will inform how you build your business.
In addition, you need to understand the revenue streams the business will depend upon. In terms of infrastructure, consider the resources needed for success. Determine the key activities you need to engage in to reach customers, handle revenue, improve your product etc. Figure out who your key partners will be. Finally, understand the cost structure required to start and grow a business.
If constructing a realistic business model sounds like a complicated challenge, it is! It’s not an impossible challenge, but it will require serious effort. A great resource for constructing your business model is bmfiddle.com. It will help you objectively document your business and help others provide feedback. A well-constructed business model will substantially improve your odds of success.
Q: What Resources Are Available to Entrepreneurs?
One of Central Ohio’s strengths is the variety of resources available to entrepreneurs. TechColumbus is an excellent first choice. Our team of experienced entrepreneurs and investors are available to coach and mentor founders and teams developing innovative technologies. The TechColumbus team will assist and connect early stage entrepreneurs with expert service providers, experienced entrepreneurs, subject mater experts, mentors and other organizations. The team also provides guidance on growth and commercialization strategies, resource acquisition and funding options.
The Small Business Development Center (SBDC) is a solid resource with a great team capable of assisting a broad spectrum of entrepreneurs. The SBDC team assists with business start-up planning, market research, financial analysis, SBA loans, acquiring information about federal, state and local programs and a host of other early stage business needs. It also offers a wide variety of courses designed to help entrepreneurs get started and to grow their businesses.
The Economic and Community Development Institute (ECDI) offers programming designed to enable Ohioans to escape poverty and to assist entrepreneurs with education and financing. ECDI provides foundational financial training, innovative micro-enterprise development training and capitalization programs, and business incubation services that provide clients access to markets, educational access and grants.
The Columbus Idea Foundry is also a good resource for entrepreneurs, providing tools and technology access to people who want to create something. The Idea Foundry‘s tools include wood shop, metalworking, welding and blacksmithing and leading technologies such as a CNC ShopBot, laser cutter/engraver and 3D prototyping printers. It is definitely a cool place to build a prototype.
In addition to the organizations geared to assisting early stage entrepreneurs, Central Ohio is home to several funding options. First is one of the nation’s largest organized angel groups, the Ohio Tech Angels (OTAF). With over 300 members, OTAF is an excellent resource for companies on a growth trajectory. Another angel group is X-Squared Angels (XSA), which focuses on investing in startups with a woman founder and/or woman CEO/CxO. In both OTAF and XSA, entrepreneurs will find capable mentors and experienced serial entrepreneurs with deep subject matter expertise and significant connections nationwide.
Another great team, Founders Factory, provides a blend of angel funding, agile technology development, lean acceleration, management expertise and experienced mentors. Founders Factory also manages the 10X Startup Accelerator, which offers entrepreneurs close mentorship to take an idea to the marketplace in 10-week period. 10X selects 10 companies and provides $20k in early-stage funding, access to 100+ mentors and introductions to a nationwide investor network. 10X has a solid track record for launching companies that receive significant follow-on funding.
The Ohio State University is home to the Technology Commercialization and Knowledge Transfer Office. TCO exists to commercialize opportunities within OSU and pair academic resources with external opportunities. TCO’s New Venture team combines the human capital, funding and technology to create startups by providing the support, connections and resources entrepreneurs need to start a viable company.
TCO hosts the monthly WakeUp StartUp (WUSU), where founders pitch their ideas to a group of entrepreneurs, investors, students and faculty. The event is designed to encourage entrepreneurs to broadcast their needs for specific expertise, introductions and resources to move their idea forward. It is also designed to provide candid feedback for ideas and business models.
A new-in-2013 event is SunDown RunDown, which is somewhat similar to WUSU. It brings entrepreneurs, investors, mentors and talent together. The goal is to talk through ideas, pitch companies, make great connections and launch businesses.
A host of other resources is also available, entrepreneurs should check out The Dublin Entrepreneurial Center and New Albany’s [email protected]. Both offer professional development and networking opportunities, and can be a home base for entrepreneurs. Similarly, the Women’s Small Business Accelerator in Westerville offers programming and office space catering to women entrepreneurs. The Marysville Entrepreneurial Center also has programming, mentors and space available to entrepreneurs.
Entrepreneurs should check out StartUp Weekend, which is held two-to-three times per year in Columbus. Anyone can pitch their idea, receive feedback and have a chance to be “voted in” by attendees to develop their idea over the weekend. Teams form around the best and most popular ideas and then it’s a “54 hour frenzy of business model creation, coding, designing and market validation”. StartUp Weekends conclude with presentations from teams showcasing progress and business potential. A handful of teams have successfully pursued their business and raised funds following their debut at StartUp Weekend.
To learn more about TechColumbus and the services available to entrepreneurs, visit techcolumbus.org/startups.