The healthcare heroes that are part of a growing community in Austin taught me just enough about their worlds to be dangerous (thank you, Gary Sabins, Dennis McWilliams, Timothy Sullivan, Jack Henneman). Thankfully, jumping back into that world on the East Coast recently proved that the best entrepreneurial advice really is timeless. The following gems offered by a stellar panel of LaunchBio investors seem to ring a bell from years past: 1. Don’t be too focused on valuation- it can be your undoing. Do your homework, look at the market, be flexible. 2. Make sure you’ve built your (IP) moat 3. Hit your milestones 4. Know where the puck is going 5. Communicate- clearly (harder than it sounds) 6. Go for non-dilutive funding- or at least have a plan to pursue it (see larta dot org) 7. Companies fail when bad things happen and there’s no money in the bank. Make sure these things don’t happen at the same time. 8. Hiring the best management team is your single most important function 9. Be careful about choosing your investors & advisors. Those outside of tech find it hard to understand the blinding pace of change entreps face while building company infrastructure, while facing regulatory and investor scrutiny. While the pace might be fast, it’s nice to know that least the rules for success remain constant.
A last-minute trip to Cambridge last week turned out to be eye-opening. Over the past year, Waymaker’s focus has been on serving markets in the middle part of the U.S. But, I’m discovering, even the most advanced markets need support too. Hosted by @BioLabs, led by good friend and colleague @Joan Siefert Rose, the experience was an ironic reminder by one of the most revered life sciences markets in the country. A wake up call that even the most mature ecosystems make continued investments in their own development—even when you suspect they could evolve organically.
It was beyond refreshing to be dropped into an environment where investors & entrepreneurs led with a desire to “have an impact on human health” and “develop a solution that will have an impact on society”. It was also refreshing to know that the principles for building a successful life sciences company have stayed the same—despite the tumultuous environment the industry has had to endure over the last decade. More on that topic soon…Thank you Joan & co. for providing a much-needed breath of fresh air. Witnessing Cambridge’s investment in growth & continued learning, all while still endeavoring to save the world, are principles all markets regardless of region could stand to be inspired by.
I’ve spent a great deal of time recently thinking about the rate at which people are ready to adopt new ideas and new possibilities, and therefore big changes. Back in 2008, stepping into my new role as CEO of the Austin Technology Council, I heard every excuse as to why tech was not and would not be an impactful part of the Austin economy. As we brought forward data suggesting the exact opposite, we were still met with resistance. We were told we were going too fast. That Austin wasn’t Silicon Valley. That we didn’t have a startup scene. Or simply, “Our city is too small.” What I learned from the Austin economic transition, was that human nature, and our fear of change, can often cloud our ability to see the bigger picture, to think outside the norm, and in many cases, can keep us comfortably stagnant at a time of great potential and urgency. There is an art to pacing the development of a community, its economy, and its transformation; to acknowledge this aspect of human nature, and then respectfully choose to reject fear and become visionary leaders of innovation.
Over the years, I have found that the pace of technological transformation can be so fast that it gives instant rise to fear. Many people feel as though they haven’t kept up or that they haven’t felt able to keep up. Technology and the rapid pace of innovation can be overwhelming in how it changes us and changes our environment. As a result of this fear, people have a tendency to try to move slower, to take back control at times of uncertainty. Ironically, it is in these times of great transformation that we need to trust ourselves and our peers and take the leap into the unknown; we need to move quickly to keep up and stay ahead.
But what I often see when doing this work, is the debilitating fear of the unknown future. We fear what we can’t see or haven’t experienced. People fear change, in part, because of our assumption that change is disconnected from the past. That if we accept and adopt new change, we are leaving the past behind and becoming disconnected from it. This is simply not true. We always bring the past with us and incorporate the learnings into our successes in the future. But how easily we remember our defeats and our failures instead of honoring our successes. It’s a harmful habit we have developed and must work hard to overcome it. We need to have the confidence to trust in the future, in our own capabilities and successes, and take a leap of faith to stretch ourselves and lean on our learnings from the past to affect positive, intelligent change in the future.
Milwaukee, for example, has successfully transitioned into very different economies many times over the centuries. From fur trading, to agriculture and farming, to manufacturing, Milwaukee’s past boast numerous successful economic shifts. I see the potential of this city, of the Midwest region as a whole. The talent, grit, and resources here give Midwesterners an advantage to become the next leading region for technological innovation. Unfortunately, if we don’t move with urgency at the pace of technological advancement, we will lose this opportunity to be innovative leaders to other regions or countries who have more focus than us, specifically China. The alternative to moving quickly with intention is getting left behind. We must be intentional about the future we want to accomplish.
Today, the sentiments in the Midwest are similar to those I was met with in Austin a decade ago. Understandably so, Milwaukee doesn’t want to be compared to Austin in the same way Austin didn’t want to be compared to Silicon Valley. Big change takes time, intention, and risk. We should acknowledge that our human nature requires us to take time to accept and make change, even to accept the thought of change. A decade later, Austin is proud to be one of the major tech leaders and most successful innovation economies in the United States.
Trust in the bigger picture and working towards a greater purpose is a stabilizing force in this era of innovation and uncertainty. We must get to a place to look beyond ourselves and our individual fears that are holding us back. We must do better for our children and our children’s children. We must lose the excuses and commit to our responsibility to take control of our economic development, to move forward and not get left behind.
Often I’ve found that in discussing startup culture, innovation, invention, etc., there is confusion between the varying elements required to fuel a healthy system. While we can be proud and excited that the Midwest fares well in the creation of new solutions and products, we’ll need to do a stronger job of distinguishing between the creative IP process and the culture and expertise required to commercialize inventions in the marketplace. I’ve met with numerous industry leaders this past week in Milwaukee who are ready to capitalize on the tech boom that is happening in other parts of the country. The good news is that the innovation and invention is already booming in the Midwest. As I see it, in order for successful commercialization to occur, the next big step is for industry and government leaders to shift culturally towards fostering robust startup activity. The punch line to this story is that while patent and research and development activity are high in the Midwest, most cities in the five states I mentioned rank in the bottom quartile of the Kauffman Index. Cities in these promising states will not only have to shift culture, but very seriously consider importing the entrepreneurial talent they need to shift into innovation economy gear.
As we’ve seen throughout history, the Midwest has successfully been able to shift into different economic models. In the 1800’s, the Midwest established itself as a farming and agricultural region. During and after the Industrial Revolution, they successfully added, and some shifted, to become a leader in manufacturing as well. However, what most don’t know is that in the last thirty years, the United States has lost five million jobs in the manufacturing sector. This translates to five million families– many concentrated in the Midwest– that have become severely impacted and essentially lost the very simple promise that was emblematic of that era. The promise that if you work hard, you can support your family and live a happy life.
As opportunities in manufacturing have become more and more scarce, there is an overwhelming recognition in the Midwest that it is time for another industry to come forward. Midwesterners are not ready to give up. They are ready for another industry change – a shift. They are ready for tech. The timing in the region is right for a significant economic shift.
So who will lead the Midwest into this new era of tech and innovation? We are going to need cities and companies to lead people through the transformation and evolution of the region. Already, we have multiple cities in the Midwest that will step forward sooner rather than later. Milwaukee, Detroit, and Cincinnati are all stepping forward as innovative economic leaders in the Midwest. Numerous corporations in these states are investing millions of dollars in early stage tech companies both inside and outside their state, utilizing new investment models, including the Fund of Funds approach. These new approaches are the perfect example and a clear signal that the Midwest is ready to make change. They have all of the pieces needed — including grit and capital efficiency — two other critical factors setting the stage for the tech evolution in the Midwest.