On Tuesday, June 18, Melissa Chipman shadowed EnterpriseCorp Executive Director Tendai Charasika and visiting author of Lean Analytics Ben Yoskovitz. This is the third in a series of articles about that visit.
After Open Coffee Lexington, Ben Yoskovitz and Tendia Charasika joined Warren Nash and members of the Lexington startup community for a chat over lunch.
People in attendance included:
- Brian Raney and Nick Such from Awesome Inc.
- Sean O’Leary from KSTC
- Grant Weherly from Control My ADHD, one of the student-led startups recently admitted to the KSTC FoundersLab accelerator program.
- Anne Nash, entrepreneur, founder of Enskri
- Lisa Bajorinas and Bill Dawson of EnterpriseCorp
Nash was the first to be able to ask a question of Yoskovitz. Her company, Enskri, personalizes eGifts. Her goal is for people to look forward to getting eGifts as much as they look forward to getting physical presents.
Nash said that in Lexington there is a lack of capital, especially for tech. She said that the local investors are just not in the tech space.
What’s the answer?
Nash’s question launched a conversation that lasted almost through the whole of lunch because she tapped into one of Yoskovitz’s passions: the Startup Travel Program.
So, what’s Yoskovitz answer to Lexington’s (and Louisville’s) lack of capital for tech companies?
“Raise it elsewhere.”
Yoskovitz’s company Go Instant was acquired by Salesforce for somewhere in the ballpark of $70million (Yoskovitz never disclosed the amount, but the Google knows)
Go Instant, he said, was funded on the West Coast.
He says, “Get on a plane. Rent an Airbnb place in San Francisco for a month. The key is that when investors say ‘Can you meet for coffee tomorrow? The answer needs to be YES.”
So when government officials ask Yoskovitz what government can do to help startups, he always says the same things: “1) Provide funds. 2) Get out of the way. 3) Start a field trip fund. I pitch that last one to every government person I meet,” says Yoskovitz.
Create a travel program, he says. Have companies vetted by local entrepreneurs. Wrap these trips around an event– a conference or a course. And send local startup entrepreneurs to San Francisco– or wherever they need to be to raise funds– so that they can make connections and develop a network.
And when they return home from their trip, send them to all the local accelerators and MBA programs and Open Coffee Groups to share their stories. There is a high value to the cultural return of this program whether they’re successful at fundraising or not.
This is not a junket, not a delegation, he says. It’s not even much of an endorsement. You’re not hooking these companies up with your network or with a network. It is much better for them to have to forge their own path anyway. It’s a low risk investment of a very little bit of money.
Check out the company’s pitch, he says. Help them with it. You have to believe in their potential, or at least in the potential of the team. Make sure they’ve done their homework and identified the key players they want to meet.
What’s the worst that can happen? asks Yoskovitz. “You give them five thousand dollars and they spend the month smoking weed in the grass in San Francisco or partying their asses off. So what?”
Sean O’Leary expressed concern that government entities may not be interested in a program that sends people away from the community. He says he worries that the program could be construed as elitist.
“Startups are elitist to begin with. Get over it. Startups leave. Get over it.”
Warren Nash said: Government doesn’t have to be involved or doesn’t have to fund it. If the state gets involved it comes with all kinds of responsibilities of reporting, etc. It’s not worth it.
Nash suggests the Travel Fund could be held as a non-profit, and provide tax incentives to people who donate. It could also take advantage of crowdfunding opportunities.
“If you want to win,” says Yoskovitz, “you’ve got to play where the pros play.” If you choose to develop your startup in a city that isn’t one of the startup centers in the U.S., “the sacrifice is that you’re going to travel a lot.”
In the car on the way from Lexington to Indiana, Yoskovitz elaborated. “This isn’t the Truman Show. You can’t build a dome over Kentucky and keep people from leaving. You can’t say, ‘Shhhh…. Don’t tell Startup X that San Francisco exists.”
Brian Raney of Awesome Inc said that a little-known story about the history of Awesome Inc is that he and co-founder Luke Murray were the beneficients of a similar act of generosity.
Then vice-mayor and current Mayor of Lexington Jim Grey sent Raney and Murray out to Boulder to visit Tech Stars to see how a successful incubator program is run. Grey gave them $2000 of his own personal money.
“If it wasn’t for Jim Grey’s $2000 check,” says Raney, “Awesome Inc. wouldn’t exist.”