Yesterday the International Business Accelerator hosted is latest roundtable for select Entrepreneurial Program Leaders in greater Los Angeles. (If you're interested in doing this in your ecosystem, we're happy to share our ideas and experiences...contact us.)
It's a special honor for us, as a non-competitive program, to host these insightful conversations. To clarify, the IBA is non-competitive as we don't invest nor take equity positions in our portfolio companies and thus don't compete with VC backed accelerators and incubators. Moreover, we are the first, and one of only a recent few, programs in the US focusing is on helping startups and high-growth companies accelerate their cross-border expansion and global growth.
The six accelerators and incubators included our own global growth focus, Make in LA the hardware/advanced tech accelerator, the Preccelerator the early stage tech accelerator, Housing on Merit affordable housing and construction program, Cross Border Labs, a US-China accelerator and LACI clean-tech incubator backed by Los Angeles' Mayor and Dept of Water and Power.
The public sector was represented by elected officials, alliances backed by the Mayor of Los Angeles and the Annenberg Foundation, and an entity charged with facilitating and perpetuating Southern California's dominant role in innovation. (Did you know Los Angeles is the largest manufacturing base in the US?)
The roundtable was hosted by Fox Rothschild, LLP, one of Los Angeles' most startup-friendly law firms with 27 coast to coast offices. I mention Fox Rothschild not only because they hosted the event and shared great insight, but have a comprehensive startup package for any US startup. It is one of several customizable tools we introduce to our foreign clients as they set up US operations.
The discussion revolved and evolved around three main themes.
The first theme was how to accumulate the tremendous resources in one repository, accessible to all our founders and entrepreneurial program leaders. Currently the startup currency of tips, tricks, tools and experts is shared almost exclusively via one-to-one interactions.
Multiple examples arose such as:
1. a water cooler conversation revealing an invaluable idea or suggestion,
2. a dashed-off email to that one industry colleague who would know, and can make an intro to, a helpful expert,
3. a post-panel or networking chat resulting in a founder learning about an alternate (non-VC) funding source.
The need for a repository is clear yet, as always, questions arise. Who hosts the repository and is that 'fair'? How do you vet and limit the knowledge base to avoid predatory programs? How to avoid the equivalent of carnival barkers eager to take advantage of desperately cash-strapped founders? What to do with programs fulfilling internal criteria and benchmarks instead of the startup's best interests? And who can dedicate the time required to regularly cull the expired and ineffective content?
The second recurring theme is the desire and expectation to maintain diversity in the startup and innovation sector.
Key findings from the full report include:
- Just 34 percent of investors are people of color
- 81 percent of investors are male
- 51 percent rarely or never volunteer with a nonprofit
- 45 percent do not have a company "give back" program
The leader of PledgeLA (backed by LA's Mayor) and the capital investment leader of Los Angeles' Cleantech Incubator or LACI (also backed by the Mayor) were both working on concurrent albeit separate diversity initiatives and only one was aware of the complementary resources available on the county level.
It was exciting to share how we at the IBA have been working on setting up a county-level pipeline of underserved and disadvantaged students into the entrepreneurial ecosystem including VC and angel firms, business accelerators, startup incubators and community college and university programs.
The third recurring theme was identifying the most common of our founders' needs. In the frenetic pace and roller-coaster emotions of any business owner, how can we best support them in their journey? The most popular responses were:
2. Product-Market fit. Too often we see passion projects burn fuel and capital before finding the fit. Too often we see founders engineering great solutions for limited problems. How can we, as program leaders, escort founding teams to the flexion point of a profitable solution and the widespread need or problem.
3. Accountability. As I always say to the founders in our cohorts, you can't read the label of the bottle you're in. You need outside (non-legal) counsel to maintain an outsider's perspective. Founders are rarely the best people to define their value proposition and strategic growth plans. Accountability is not just KPIs and benchmarks. Accountability in this sense is staying on track with what best serves the customer and stakeholders over and above the desire and ambition of the founder him/herself. Can we find the balance of keeping the founder accountable to what's best for the company itself, even if it's clouded by his/her desire to create something he/she thinks is great?
4. And here we go again relating back to the first theme; access to resources. The final commonality was when and where to ask for help. The founder's mentality is varied and, to put it mildly, curious to the outsider. Nose to the grindstone is often the most comfortable. I found myself thinking of the old tale of a drunk falling in a hole.
If you don't know it, it's about a drunk who fell in a hole, couldn't get out, and yelled for help from passersby. A businessman walked by and threw some money in, suggesting he buy a ladder, assuming it would help. A doctor walked by and prescribed pills for the discomfort, hoping the same. A psychiatrist walked by and asked many questions about how he got there and how he felt about it. A religious leader walked by and offered prayer and left literature. And still, the drunk was stuck in the hole. Then, a recovered alcoholic heard the cries for help and immediately jumped in the hole. Flabbergasted, the drunk said, 'What are you doing? Now we're both stuck here." And the recovered drunk said "It's ok. I've been here before and know many other who have as well...and I know the way out."
While we may not be recovered drunks, we should know how to get our founders out of the holes they're in. And any good program will have a roster of those who also know from firsthand experience.
And while this is not an uncommon spot for a founder to be in, it's our responsibility to encourage our portfolio companies to know when and where to ask for help before they find themselves in the metaphorical hole.
While there were many other salient and interesting points raised, these were the highlights. If you're a leader in your startup community and ecosystem of innovation, we'd love to hear your thoughts.
If you have any comments, other suggestions of salient points from your entrepreneurial ecosystem, we're eager to hear them.