Theory of the Gold Miner

Having done startups on both coasts, I have a theory of why people have different perceptions of an entrepreneur who has to close his company, and by extension, indicates why there are significantly more California startups. All things being equal, i.e. you worked long, hard hours, stayed current with the market and technology, and ran an honest business, there are still plenty of reason good business people close a business. Here's the difference in perception:

On the East Coast, closing your business means you are a failure. People don't want to be associated with a failure

Failure

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One the West Coast, closing your business means that you weren't able to make it work for what's likely a combination of things you can control, and things you can't control, but you learned a lot along the way. People will work with you the future because your experience can be invaluable.

Experienced

I hear this in just the casual conversations with people. East Coasters regularly used the phrase "failed", whereas the West Coast folks say "shut down". So where does this come from? I think it's from the gold miners.

In the early days of gold prospecting in California, finding gold was an inexact science that involved a lot of hard work, persistence, and a fair amount of luck. When a gold miner didn't find gold, they would only be perceived as a failure if they didn't work long, hard days. If their fellow gold miners did hit a big vein of gold, they'd look around to their peers who had not been so fortunate, and bring them into their mine. The other miner had learned the art of mining, but had just not found the vein of gold. They weren't failures, but they did have enough sense to know when to stop digging in an empty hole, and work where the better opportunity arose.

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I like to perceive closed startups as "shut down". There shouldn't be such a social stigma against an honest, smart, hard-working entrepreneur who didn't make their company soar. If they learned how to run a business, they're likely to help someone accelerate their growing business, and will likely use the experience to start and grow their own company in the future.

Wells College Entrepreneurship Dinner

Recently a few of the practicing entrepreneurs from Ithaca were invited to a dinner at the Aurora Inn in lovely Aurora, New York to meet faculty, administration, and students from Wells College who are actively teaching, supporting, and learning entrepreneurship.

President Ryerson and Wells College students thinking I look funny when I am talking
The format of the dinner was a sort of round-robin where students changed tables at each course of the meal. This gave them a chance to meet different entrepreneurs, and for us to meet different students. Since there were more tables then courses, some of the students made a point of making the rounds to meet everyone once coffee was served - a move I applaud.

The center point of the evening were the presentations by the two teams that won the Wells Entrepreneurship Week. In the not-for-profit track was a business concept to allow professors to loan their pets to homesick and stressed students. In the for-profit category, a unique new concept for a golf training aid was demonstrated and explained, with the additional good news that the team has a commitment of seed capital funding from an angel investor!

Wells College has a great entrepreneurial history, dating back to its founder Henry Wells, who was the entrepreneur who founded Wells Fargo and American Express. This tradition has been continued this year with the announcement of a $5MM donation from Wells College alumni Susan Wray Sullivan to endow the Susan Wray Sullivan '51 and Pike H. Sullivan Center for Business and Entrepreneurship. As a liberal arts college, business and entrepreneurship has not been a traditional focus, but students and educators are keen to the changing winds and now see these skills as part of a well rounded education.

$85K Ithaca College Business Idea Competition

This Fall Ithaca College launched their inaugural Business Idea Competition. This competition is designed to encourage and accelerate the new company formation for all of their students, in all parts of the school.

Get your good ideas reved up!

This competition was made possible by Ithaca College alum J. Christopher Burch. Chris is a wildly successful entrepreneur himself, who successfully launched his first multimillion dollar company while a student at Ithaca College, and is now well known as the cofounder of Tory Burch. He has also made a number other successful investments, including Jawbone, Voss, and PowerMat .

The competition format is simple to explain, but hard to do: You have 4 minutes to explain your entire business idea to a panel of judges that will include Chris Burch. You then get 4 more minutes to answer their questions. 8 great minutes is all it takes to get the seed capital needed to start a business.

Good luck students!

Lawyers, Accountants, and Insurance Brokers I Trust for a Startup

I am often asked about which service providers I use at Mezmeriz and would recommend for other startup companies. Therefore, I have compiled my official list of the people and firms that I use and trust. Even though we're based in Ithaca, New York, I've found that not every service provider needs to be local. Furthermore, I think most of this list is applicable for startups in New England and on the east coast of the USA.

Corporate Insurance

I have been with the husband and wife led team at McManamey & McManamey for over ten years and three companies. They are based in Virginia, but do a bang-up job regardless of where you are. They now do the corporate insurance for a number of Cornell and Ithaca startups and treat you well regardless of size. They'll take good care, do all the heavy lifting of the complicated stuff, and do it at a fair price.

Legal: Corporate & Patent



We have been with the firm of Choate Hall & Stewart for a number of years. However, I would really say that we're with the firm that employs David Rickerby. I have had a number of different lawyers from small boutique firms as well as from Washington DC and Silicon Valley's elite firms. I have found that it's really about the relationship and quality of your main contact and how well they manage the people at the firm who are working on your issues. David is a great contracts and licensing guy, but he's also a great manager of corporate, HR, and patent attorneys. On an hourly basis, these guys can be expensive. The message I tell aspiring entrepreneurs is that a cheap lawyer per hour will often turn into an expensive invoice, whereas closely working with an expensive lawyer per hour results in much lower invoices.

Accounting: Bookkeeping

I use Intuit Quickbooks Online. It's a good solution for it's accessibility and universal familiarity. It's accessible because you can get to it through any browser, and that it really nice when traveling or when you need to allow access to your accountants. Its universal familiarity means that when you need to upgrade to a fancier accounting system, or have your books reviewed and audited by an outside firm, the process doesn't involve everyone relearning a brand new system.

For the actually data input and record keeping I have a contract bookkeeper, Leslie, who comes in a few times a month. I have a big box-o-bills that she sorts through, and then makes sure all the new data gets entered, checks get cut, bills get paid, and all invoices and receipts are filed in an organized manner. I do make a point of personally signing every check. It's a bit old-fashioned, but it's a good way to enforce the discipline of knowing where each dollar goes.

Accounting: Payroll

Seamlessly integrated with Intuit's Quickbooks Online is Intuit Online Payroll. They take care of all of the taxes, filing, direct deposit, and forms.

Accounting: Tax


I use the local Ithaca firm of Sprague & Janowsky to do our corporate tax work and general accounting help. They take care of all the tax issues - which in New York can be amazingly complicated - as well as help us out whenever our accounting gets complicated. For example, they made sure that our books were in a professional format prior to use sending them out to potential investors.

Banking

I am a strong advocate of having a local banker. We work with the folks at Tompkins Trust Company. A local banker is like a solid defense: They won't score you any points, but they'll make sure the important stuff gets done right. I have heard first hand of incidents where entrepreneurs had a standard banking transaction screwed up by a faceless person in a massive call center at one of the mega banks. I like to know that for the big stuff, I'm going to sit across the desk from my personal bankers Matt and Kim and they're going to get it done right.

Employee Health Insurance


The newest addition to this list is our employee health care brokers, Tompkins Insurance Agencies. Excellus BlueCross BlueShield has been the actual providers, but he had to change brokers after our first broker passed away, and the second broker ignored us. We went with Tompkins Insurances because they showed that they actually cared, and based on our positive experiences with the bank, we made the switch. So far, so good.

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If you want a formal introduction to any of these folks, please don't hesitate to ask. I don't mind helping drive business to people who are doing a good job. If you happen to contact them directly because you read this, please let them know. That sort of good will has a way of coming back around.

Text Me a Cab

Earlier this year my friend Paul launched Collegetown Cab. His goal was to use technology to make a better taxi cab company. They use mobile phones, GPS, email, text messaging, electronic meters, and credit cards. While many businesses have been using these technologies for awhile, this innovation has been slow to come to commercial taxi services in small towns like Ithaca.


You can also wave your cell phone in the air for a pick up

One of the programs that made it possible for him to launch was the Small Business Administration 7(a) loan program. This program is administered through banks, but is backed by the Federal Government. The Feds basically co-sign the loan with qualified entrepreneurs. It's like having a rich uncle, except in this case it's Uncle Sam. This program helps with the problem that most entrepreneurs have when starting: No capital and no collateral.

Things are going well at Collegetown Cab and it looks like the bank will get repaid. Paul's working long hours, and even drives a cab sometimes, but he's learning a lot about the business. Give him a hand by calling 607-588-8888 the next time you're in Ithaca and need a ride.

Why Park So Serious?

My friend Sean Neville had these signs made for the parking area at the Oakville, Ontario offices of Books for Business. I love it when a business can not take everything so seriously. Another nice perk of being an entrepreneur.





Books for Business just launched their new website, so you can see them here, and follow them at their @BritnellB4B Twitter feed.

Bankers and Students

Recently my friend Adam Fitzner came to town as a guest speaker at Ithaca College. It was an interesting juxtaposition of a Wall Street banker and bucolic Upstate New York:


Wall Street on Main Street
The students really enjoyed his visit. It was nice to see the Wall Street guys humanized and to hear specifically what they are trying to do. Adam's specialty is distressed companies. He's the guy you call when your business is faltering, and you need some banking and contractual help to right the ship. His group tries to save companies, and thus saving jobs. Often they do this using scary sounding techniques like "leveraged loan issuances", "covenant waivers", "dividend recapitalization", and "liquidity enhancing divestitures" - but at the end of the day, they're trying to save the company.

Thanks for coming to Ithaca Adam!

Orthogonal helps ZetroZ Wins $50,000

Yet another Ithaca entrepreneurial team, Zetroz, recently won a bunch of money with a little help from their friends! We've got a good track record of this sort of thing in Ithaca, so some have come to expect it. Even with our little town's track record, I think it's great that Bryant and George did such an awesome job, and probably should have won even more. That said, $50K is good money for any startup, and I think it's great that they are going be be able to use the prize money to accelerate their growth.


The things in this deck? Those things can only get better!

But that's not the whole story here. I think a wonderful untold story is of two people taking the high road, Fox Holt of Orthogonal and Bryant Guffey of Zetroz. In the picture above, you can see my living room, and you can guess that I took the picture. What you don't see is that one of the people in the room was one of Bryant's direct competitors in the finals - Fox Holt from Orthogonal.

It's amazing to think about: Fox and Bryant were 2 of the 5 finalists, yet they were working to help one another win, knowing that 3rd, 4th, and 5th place paid no money: $00.00. On two long nights leading up to the finals, these guys worked together and with other members of the Ithaca entrepreneurial community to refine their presentations, messages, and slide decks. In doing so, they knew that the were probably helping a competitor, but they also understood that what was more important was getting the messaging and strategy right for the marketplace and outside investors, and not just this competition.

So the written part of the story is that Zetroz won $50K, and Orthogonal won $0. The unwritten is that both took the high road, and both should be applauded equally for their character. This sort of help-each-other attitude may not pay off each contest year, but it will certainly pay off over the long term.

Kudos to you both!

Someone just stole my tech transfer guy!

For the past decade, through two companies, and a handful of other stalled starts, I've worked with the same patent and technology transfer guy at Cornell, Scott MacFarlane. Scott and I fought and argued and raised our voices and yelled at each over over deals. We've argued about big things like percent equity ownership, and we've fought about little things like choosing the right phrasing of a patent claim. It never came to blows, and it was always respectful, and I grudgingly admit now that every now and then he was right. Very grudgingly.

Recently Scott was hired on to lead the patent and technology transfer office at Upstate Medical University in Syracuse. We wished him well on his new adventure, and we are sorry to see a guy go who really gets it.


Somehow, they'll get the last laugh here.
While not the teary-eyed set, the local Ithaca entrepreneurs saw this as a bittersweet moment. We poured some beers, and wished him well. We'll keep fighting over the details of the patent language, it just won't be as interesting.


Cheers and Good Luck, Scott!

Name Game

Recently my friend Alex concluded that he needed to rename his startup. The business had changed direction a little, and the name they had had them metaphorically boxed in. He and I decided to have a casual afterhours brainstorming session and invited folks from the Ithaca entrepreneurial community over to my house. Alex provided the food and brought along some fancy spirits to sample too.

From one of my EIR lectures at Cornell, I had a few slides on company names:


What's in a name?

Alex put up on the walls large PostIts with some of the ideas he had been working on. From there, we added, critiqued, and debated the ideas late in the night. Probably a little too late, but we were having fun. Though it was just a name change, it felt like we were helping the company out of their box so they could explore new products, markets, and marketing opportunities.


Call it Rose? Nah, won't smell as sweet

The result is a company name that makes a lot of sense for what the company has evolved in to, and where they're going. He's not yet announced the new name, so I'll not spoil the fun. Suffice it to say, when he went back to his team with the recommendation, they loved it.

List of Ithaca startups: 2011 Edition

In what is now an annual posting, here is my 2011 list of startups based in Ithaca, NY, just in time for the Entrepreneurship Celebration at Cornell:

Adenios
Adispell
Aerofarms
Advion
BinOptics
Biophyzica
Blue Stamp
Bombyx
cheribundi
Comet Action Sports
DataPoint Labs
DNANO
e2e Materials
Energy In Common
Flex Kinetics
Fortis Wind Energy US
Incandescent Software
Finger Lakes Aquaculture
Gene Network Sciences
Glycobia
Hybrid Silica Technologies
Illuminaria
International Climbing Machines
iFyber
MADathletic
Mezmeriz
MicroGen
MiTeGen
Nanomedik
MouseCare
North Sea Resins
Nova Speech
Novasterilis
Novomer
Odyssey Molecular
Ontology2
Optigen
Orthogonal
PiXL
Primet
Red Tail Hawk
ReMarkable Paint
Rheonix
Sanmita
Sound Reading
Snappy Screen
Spider Holster
Strut Your Hut
Synairco
Tech S2
Terrenew
Tetragenetics
ThinkWorks
Veratag
VideoNote
Vybion
Widetronix
Zetroz
Zuma BioSciences

Creative Core goes to $250,000 for 2011

I'll be there rooting on the three Ithaca startups: Orthogonal, Zetroz, and Microgen. Good luck guys!

We Live NY Summit March 24-26, 2011

Live it!
I'll be there on Friday the 25th chairing a panel for the Business & Entrepreneurship Track.

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Addendum: Sorry I had to miss the event with a last-minute personal matter. Kudos to Tom Schryver for covering for me and earning rave reviews in the process. Thanks Tom!

Ordr.In

My friend David Bloom just rebranded his company, and I love the new name, look, and feel. The company is Ordr.in, and their mission is to make it easy for restaurants to connect with customers, and customers with restaurants.


.It's .What's .In

This isn't yet another food ordering portal. We have enough of those. As a veteran of that industry, David saw a problem that restaurants were constantly fighting to drive customers to their tables or their website. But marketing is time consuming, expensive and a huge distraction from actually running a restaurant. A huge struggle and a real pain in their side.

Like a good entrepreneur, he set out to solve a straightforward question about a particular pain point: "How can I make it easier for restaurants to get in front of customers where they already are?" He started with hotels by creating virtual room service thats links restaurant ordering systems directly to hotel wifi. Now he is working on other places where restaurants can find hungry customers.

I'll not go into too much minutia about how it works, so I'll summarize it this way:

If you are a restaurant who wants to get more orders from hotel guests and others, click here.

If you have a hungry audience, hotel guests or otherwise, and want a commission when someone orders, click here.

If you are a software developer who wants to build a web site or mobile app that pays a commission each time a user orders in, click here

For everyone else, it's possible that the next time you have a great experience ordering in your hotel room, you can know that Ordr.in probably made it possible.

Bam! Boobies!

My friend Kerry Gilmartin just had her third child. Her nipples are sore. It's a simple fact, and her husband Eddie's no help (though he tries!); here's the math folks:
Mom + Babies = Sore Nipples
Like a good entrepreneur, she decided to do something about it. Kerry also loves the environment (she's from Boulder, what'd you expect), so she devised a solution to ease the discomfort of nursing mothers in a way that wouldn't be bad for our planet. The solution? BamBoobies!


One Boobie. Two Boobies. BAM Boobies!!

Besides being a huge fan of the name and branding, I love the practicality behind the product. This is a great product that addresses a real need for women who are nursing. Nursing results in brilliant babies, and those babies don't want to inherit a world full of disposable non-biodegradable products. I really think she's onto something great.

If I were nursing a baby, I'd buy BamBoobies. You should too.

New Entrepreneurial Friends in Saudi Arabia

Recently I was part of a group of Cornell entrepreneurs who helped mentor/advice/brainstorm with students in business school in Saudi Arabia. Using email and video conferencing technology, we each worked with teams from King Abdullah University of Science and Technology. Mentors included Ithaca and Cornell representatives from Globe Composite Solutions, Enhanced Capital Partners, Singlebrook Technology, Adenios, e2e Materials, Widetronix, Mezmeriz, and Choate Hall & Stewart.


Jon Greene from Widetronix doing his best Oz impersonation

My team started out with a really big idea - fix all health care record keeping and dissemination in Saudia Arabia. While I loved the idea of thinking big, I wasn't sure that was the right problem for a new company to tackle right out of the gate. After talking to 52 doctors in just 3 days (WOW!), they figured out that just acquiring the data was a huge problem. They then formulated a plan - and viable business - that would focus on solving this major problem. However, they also worked into their plan how solving data collection was just the first step in many towards fixing all health care record keeping and dissemination in Saudi Arabia. That's thinking big, and thinking practical. Good stuff!

I look forward to following their continued progress as they take this plan out of the classroom and into the world.

Nice work team!

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To see more pictures of the KAUST Entrepreneurship Program, click here.

You All Aboard for Adventure?

YallAboard is a new Boston-based startup that is putting together affordable adventure travel packages for young professionals. Through a lot of work, they have been able to pull together a number of interesting travel deals that they'll be rolling out throughout the year. This is a great way to do something new and interesting, with people who are new and interesting.


Yes

Dan and Drew were students of Cornell Entrepreneur in Residence Jim Quest. After I posted a little promotion for them on Twitter, they reached out to me and introduced themselves. During a trip to Boston last fall, I had the opportunity to meet them face-to-face and walk through their business plan and offer whatever advice and experience I could. I could tell they were smart and hardworking, and I was excited to see them launch their first promotion this month, Snowkiting!

But then they went the extra mile and did something unexpected. They sent me a thank-you postcard. That's right, two young guys running a website-based business sent a piece of paper via snail mail. I love it!


That's old school, in a good way

To Dan and Drew, you're welcome. Congratulations on the launch. Keep up the good work!

Feld Good Inc.

The folks in Ithaca and upstate New York are really excited about the coming visit of Brad Feld. The reason is that we want to copy his model for entrepreneurial success. In Ithaca, we view Boulder Colorado as our brother from another mother. If they can do it there, we can do it here.


Do It in New York

Brad Feld and his entrepreneurial lessons are coming to Ithaca. And we're stoked. For those of us who are already bought in, it's time to convert the others. There's a big event at the Ithaca County Club on February 2nd. You can sign up for it here.