Startup Vermont: How a Competition Can Bring Us Together

Vermont New Business Prescription: Second in a Series

Startup Vermont

Pulling it all Together

Tomorrow I’m meeting with Vermont House legislators as well as an official from the State Commerce department to talk about startup competitions. As I said below in “Vermont New Business Prescription: First in a Series”, Vermont would do well to create a statewide startup business competition.  The State Legislature evidently agrees: they commissioned a committee to put together a plan for a “StartUp Vermont” competition.  Why is such an event important? While the annual Invention2Venture conference and Vermont Investor Forum are terrific events aimed at the entire state, both are only 1 day affairs, and neither aims to bring together all of the elements of the Vermont startup ecosystem.  There have been a few long-running competitions (Brattleboro, St. Mike’s), but neither aim for a state-wide event.  And I have no desire to re-invent the wheel, but we are sorely lacking an event that will bring the entire ecosystem together: entrepreneurs, investors, mentors, educators, lawyers, accountants, consultants, etc. All of the aims of the committee (creating jobs, promoting the state, jump-starting the economy) are spot on. However, if it was easy to have a well-oiled, cohesive economic infrastructure in place, everyone would have one.

A startup competition is merely a means to help create that ecosystem, and we need to recognize the need to walk before we run. So, how to do this? Let’s start with the basics: identify those who have successfully created their own profitable companies. They have the most credibility to act as mentors to the entrepreneurs. (See my post on the Mass Challenge to see some of the great mentors they attracted.) Which Vermonters should we consider? Here’s a dozen just off the top of my head: John Abele, Rich Tarrant, John Dwight, Ben Cohen, Jerry Greenfield,  Tom Evslin, Hinda Miller, Alan Newman, Nord Brue, Steve Arms, Mark Bonfigli, and Robert Stiller. And each of these people recruit two other experts each.  Now we’ve got a critical mass of talent, before even going to government institutions. Add in members from Vermont Venture Network, North Country Angels, the Vermont Business Roundtable, etc.  (Here’s more links to organizations involved.) And now bring in the service providers: consultants, lawyers, accountants, etc. Now, it’s a matter of finding one or more sponsoring organizations.  If I had to pick one, it would start with Champlain College. In my opinion, it already has the mindset of the aggressive startup. It has grown and prospered by seeking out underserviced niches, it has connected superbly with the local business community (their Board of Trustees alone would be a killer list of mentors, as almost all are CEOs and/or founders of companies), they are thoroughly up to date with I.T., social media, and other growth sectors, and they continuously offer a great entrepreneur speaking series. (Coming up in April, noted entrepreneur and angel Will Herman.) But wouldn’t it be great if they could share the event with UVM?  Think of the synergies of improving the working relationship between the strengths of Champlain with the terrific backlog of technology coming out of the UVM graduate schools?  Perhaps Norwich could go across the river and do an “Upper Valley” event that links in with Dartmouth, while St. Mike’s and Middlebury explore teaming up. But before I would try to get 6 schools together, perhaps just get each school to do their own.  Let’s start with baby steps in 2011, with the goal of something meaningful by 2013. Clearly there are many other players to get involved, including state-funded colleges, VEDA, etc. Perhaps best would be to find one larger corporation (National Life, GE Healthcare, IBM?) to host finals, as that would be considered a “neutral” party rather than singling out any one school. And then we could get a national level speaker–Fred Wilson, are you reading this–to bring out the community and get some national buzz.

Formats, prize money, all of these are unimportant.  What counts are people willing to stand up and say they can help. I’m willing to judge, mentor and recruit, but I’m not an organizer by nature. Any takers?

Judging Success

Startup Vermont Business Competition

How to measure success? First, getting started. Second, the number of volunteers you can assemble. Third, the number of interactions that are created.  And then, after a few years, we can start counting jobs.   Let me end with one concrete example. Dr. Peter Zvara of Sonouroflow is a surgeon and urologist who, via licenses from UVM’s Tech Transfer Office, has exclusive rights to commercialize his invention of “Sonourography”, a better, cheaper and more convenient way to help monitor and measure the progress of urology patients with BPH.  It is an investor’s dream: effectively, he can create a phone app that allows patients to pee in the privacy of their home but have a slew of results automatically sent to their doctor, along with analysis. There are no manufacturing costs, as patients use their cell phone to capture and transmit data via sound recordings. So, 90% plus margins, strong I.P. protection (with a patent issued last August), and supporting scientific articles published.  He has received an STTR grant, and he has a working prototype that works with any cellphone headset or carrier.  Equally importantly, this technology has a strong social benefit of being able to lower health care costs.  For Vermont, this is the type of company that could clearly go not just national, but global. So what’s the problem? Dr. Zvara is a full-time surgeon, and not a business operator. He needs to build a Board, hire management, access venture capital funding, and most importantly, help convince urologists that they should be open to changing their own practice, especially when that might result in more revenues to general practitioners at their own expense.  He has received collaboration offers from Canadian urologists and investors, but is unsure what terms he should be offering. While prize money would be nice, what Dr. Zvara really needs is to be able to spend a few hours with someone like John Abele, the legendary founder of Boston Scientific. Along with good lawyers, regulatory consultants, and software architects.  Add in easy access to the SBA, VCET, and all of the other institutions already in place, not all of which may be known to Dr. Zvara. Our goal should be to find a way to make these matches. Startup Vermont is a way to make it happen. More later after my meetings in Montpelier. If you’re reading this and want to get involved, please contact me.

This post begs a thousand questions:  should we first “let a thousand flowers bloom”, and encourage lots of little local contests? Or do we combine resources into one bigger and splashier event? Or wait for there to be winners from smaller events (typically in the spring) and put on a venture fair, where attendees rotate among the booths and then vote for their favorites?  Please add your comments.  (PS–would like to thank Cairn Cross of FreshTracks Capital and Mary Evslin of Evslin Consulting for some of their thoughts as I put this together.)

9 thoughts on “Startup Vermont: How a Competition Can Bring Us Together

  1. Mary Evslin Reply

    Vermont has all sorts of hidden fascinating companies that are working and selling so hard that they don’t have time to look at the bigger picture. I remember being there. A plan like this could help them raise themselves to the next level.

    Oh and don’t forget to add Bill Stenger from Jay Peak and Peter and Dick Dreissigacker of Concept 2 to your list of Vermont business entrepreneurs.

  2. Ty Danco Reply

    One reader already called to question why I thought prize money was unimportant. For the primary goals of the competition–that is, stirring the pot a bit, creating networks and establishing a startup community–money isn’t the draw, it’s the people you gather. Entrepreneurs (i.e., contest entrants) of course want and need money. But there can be great in-kind prizes donated. Donations could be found for free professional services, from incorporation documents to website design; winners could get press coverage, slots before any of the investment groups, a year’s membership (including rent, perhaps) at VCET, etc. But again, the most important thing we can offer is quality one on one consulting time with the mentors. So consider the lack of big money an effective filter. If a startup entrepreneur doesn’t want access to the class of mentors we can attract, they probably are too short-sighted or naive about networking to succeed.

  3. David V. Dunn Reply

    Having participated as a mentor to the Brattleboro competition for several years and working with dozens and dozens of start-ups and start-up wannabe’s, I can tell you that this would be a great event if we ask ourselves a lot of questions and make sure of a couple of things:

    1. Will this be an open or focused start-up competition, i.e. any new business from food and retail to B&B’s, etc. or focused on IP and technology and then sectored – healthcare, software, manufacturing, etc.

    2.I think that we will need to treat the entire State as a level playing field. We should not have a city-centric or regional focus to assistance. Entrepreneurs around the State should have close-by and equal access to good mentors.

    3. I think all prizes should involve money. More than anything else, start-ups need money. I see more business failures due to undercapitalization in the valley of death than from any other cause.

    4.While marquee mentors might initially bring cache to the program, from what I have found, most start-ups excel at some aspect of business but seriously lack skills in other areas. They will need a lot of hand holding on some things you/I might take for granted.

    5.Pre-screening (via a two-page draft plan) is recommended to filter out the flying car and other innovators who will throw their ideas at any opportunity for money. I suggest we accept all comers and then agree to review XX formal plans (along with presentations) based upon the number of judges available. I would be glad to discuss the methodology we used for the business plan competition down here that maximized everyone’s time.

    Ty, I think this is a great idea. If you would like, when we are ready, I can discuss this opportunity with my agency to see if we would commit to offer statewide assistance in whatever form or fashion that will work for this event.

  4. Curt Carter Reply

    New Agency of Commerce Miller should be very supportive of the idea. I agree that the most critical factor in turning an entrepreneur into a viable business is their making the right connections and getting the opportunity to listen. Having been involved with helping make the connections between investors and entrepreneurs for a long, long time i have always fantacized of a system of coordinated but separate events. From SBDC, to Digital Bridges, to VCET, to VVN, to VIF, to NCA, etc. Keep that in mind as this great idea develops..

  5. Don Gooding Reply

    There are some other statewide competitions you might want to look at as models.
    Rhode Island
    Minnesota Cup
    South Dakota

    I did a lot of research on competitions this past summer.

  6. Lee Bouyea Reply

    Thanks for investing the time and effort to put some framework around this idea, Ty. I think our startup community is manageable ehough, and that we would benefit from organizing a statewide effort.

    FreshTracks Capital would certainly endorse the concept, and be happy to play a part in such an ongoing event. I think a key question is whether or not this should be an expansion/extension of VIF or Invention2Venture or VVN, or if the concept should be a new conference/entity altogether that stands on its own?

  7. John Harthorne Reply

    MassChallenge would be happy to help. As you know well, Ty, we are a global competition and accelerator and are committed to supporting the entire ecosystem — regardless of geography. We are already working with innovators in a few other states and are actively investigating how we can best help others to create local competitions and activities. So, consider us willing to help and available.

    Regarding the prize money, it does have marketing value — i.e. it helps to legitimize the competition and to attract entrants and supporters. Non-dilutive funding is always good, but it does not really have much value beyond marketing within the context of a competition, i.e. although startups may think the money is very important to them, they will discover that mentorship and other resources are far more important — at least if the competition is well designed.

    Another great initiative from Ty Danco! Let us know how we can help.

    1. Ty Danco Reply

      Thanks, John. The first thing we need is for you and Akhil to move up North here to the Promised Land for v1.1.

  8. David Bradbury Reply

    good thinking Ty and thanks for raising this topic. I was on the group putting out this early model/thinking for a bus plan competition. Personally, I see the following as must have components:
    1. Cash prize coupled with mentors/professional service help (accountants, lawyers).
    2. A college like Champlain, UVM or Middlebury or both have existing programs for entrepreneurs…great way to call in Alums, area entrepreneurs, select faculty etc to judge.
    3. Commit to a few years to give something new momentum and time for traction.
    4. Worry less about selection/eligibility process and more about the relationships made, ecosystem growth and direct aid to entrepreneur participants.

    Hope something develops here…I stand ready to help and thank the working group for producing this outline for the Legislature

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