Orchards of the Future Need Thriving Nurseries

Five hundred years ago, Martin Luther nailed to a church door his “95 Theses,” a list of propositions and questions for debate, geared toward reforming the church from the errors and institutional sins that had crept into it. Despite the immediate furor, the ideas ended up generating a new lease on life for the institution. Entrepreneurial practice needs just such a reformation today.

We are bombarded with the “age of entrepreneur.” Government programs encourage it. Business magazines focus on it, in part or completely. There is no shortage of systems supporting it. But real life tells a different story.

In the United States, the rate of business creation has declined since the late 1970s. In some recent years more companies died than were born. Minnesota has its own aging population of businesses showing stress and decline. At the same time, Minnesota has almost the worst rate of planting new seeds. What happens when these fruit-laden trees become barren in a decade or two?

Errors and institutional sins have set in. Consider:

  • The venture-capital mantra, based on software companies, is “exponential growth wipes out all sins at the time of exit.” Venture-capital companies have dumped businesses, even those with merit, that were not growing according to expectations — “If you are not growing, you’re dying.” Sub-unicorn venture is considered nothing.

This VC formula has permeated all domains and all stages — from accelerators to angel investors, service providers and even entrepreneurs. Stories from Silicon Valley have colored dreams, and entrepreneurs know of no other model than to be a unicorn.

  • Consequently, investors at all stages do not want to support true seed-level ideas. The conundrum is that healthy seedlings cannot grow without planting seeds and tending to them.
  • Startups used to focus on the personal risk of the founders and early employees. The riches came only with success. These days, executives of large firms can create just as much wealth. So why take the risk?
  • The business plan as the starting point for ideas is a flawed model. Not even the most seasoned judges can identify a potential success at the idea stage. Worthless standards such as completeness of plan, quality of presentation, etc. creep in. Even the question, “Does it have revenue?” is flawed in that, if it has revenue, the venture is way past the seed stage. Business-plan contests may be sexy, but they are diversions and don’t get to the root of the problem.
  • Calculating all the present and potential variables to ensure a rocket reaches its target is a method with a dismal record. Development of a feedback loop and consequent mid-course correction(s) is what got us to the moon. Similarly, business plans are the end product of a convoluted journey after numerous course corrections. Most entrepreneur-support programs, including college courses, cling to the completed business plan as the gold standard for initiation.
  • Traditional in-person accelerators are not scalable and can take only a few chosen ideas.

Dileep Rao, in his book “Bootstrap to Billions,” documents the stories of many Minnesota entrepreneurs who built billion-dollar corporations through a prudent mix of present profits and future prospects. This approach is both old-fashioned and contemporary. From a societal perspective, in addition to prudent financial strategies, we need a scalable, community-based solution that offers a step-by-step process with learning materials, templates, instructions and mentors at each stage of the sprouting process.

Hassan Syed has developed just such a technology-based platform, called Ideagist. The platform went through the same birthing challenges that any innovative idea does. Now it has grown to 300 communities around the world, with 26,000 people incubating over 1,600 ideas.

Syed came to Minnesota as a leader of a team of 600-some scientists from 40-plus countries to develop a complex global system, presently used at 900 aquariums and zoos, to monitor and maintain 350 standards for animals. He corralled friends from around the world to use their experiences to build this next complex platform.

An immigrant just like me, Syed is providing Ideagist free to 100 business launches as a way to give back to entrepreneurs in our new home.

Minnesotans pride themselves on their helpfulness and community spirit. If other like-minded people collaborate to build Minnesota startup nurseries, orchards for the future will surely follow.

This first appeared in Twin City Business Magazine July 2017. For other columns see Planting Seeds.

Dr. Rajiv Tandon is an advocate for the future of entrepreneurship in Minnesota. He facilitates peer groups of Minnesota CEOs and runs two programs for propelling ideas into business ventures, the Rocket Network and 100 Launches. He can be reached at rajiv@mnexecutivegroup.com.



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