Elevator pitch: A slang term referring to the 20-60 seconds an entrepreneur has to interest a venture capitalist in his or her business idea. – Dictionary.com
Most rookie entrepreneurs couldn't tell an elevator pitch from a roof pitch, but it's an integral part to Ann Arbor SPARK's entrepreneur boot camp. And back in late October, starry-eyed small business hustlers spent hours crafting, practicing and perfecting their elevator pitches in a nondescript office building on Ann Arbor's south side.
Mike Monan and Stephen Colson were two of them. The men behind Switchback, an Ann Arbor-based website development firm, are pitching a software program that allows small businesses to build websites that are more likely to rise to the top of a Google search. Usually such website services cost tens of thousands of dollars. Switchback's software would require only a few thousand bucks. The idea sounds solid enough to draw investment but the devil is in the presentation.
"We've been working on it for a while but we didn't solidify the pitch until Tuesday night (the night before boot camp)," Colson says. "You go through it just like you go through any speech or any public presentation. You just repeat it, repeat it, repeat it."
But like most other entrepreneurs, developing their business plan is not the only thing they do. Colson would repeat it, repeat it, repeat it during lulls in his normal workday --writing code and problem solving. Grabbing time whenever he could, he'd lean back in his office chair and time his delivery with his iPhone.
The Switchback partners went through their notes again and again, distilling their pitch to a few key phrases. It's not so much the way an actor memorizes lines but how a storyteller masters telling a tale. Colson stayed up until 2:30 a.m. (a few hours before boot camp started that morning) practicing to make a pitch before a crowd of nearly 50 of his peers. A little voice let him know he was ready.
"It was more my wife saying, 'You need to go to sleep," Colson says.
The elevator pitch is the first thing the entrepreneurs tackle at boot camp. Participants offer their best pitch then the audience critiques it. Colson, the more public 'face' of the team, knows exactly when it's his turn to go up because he puts off volunteering until everyone else has taken a turn.
The pitch is detailed and filled with jargon – easy for people in his field to understand, difficult for anyone who isn’t a techie. There's more work to be done.
The entrepreneurs attending SPARK's boot camp are exactly the type of people Michigan has been soliciting to reinvent our economy. The conference room is filled with tech professionals young and old, men and women, foreign-born and ethnically diverse. They're dressed in button-down dress shirts with a mix of sweaters, suit coats, jeans and the occasional fleece. There are lots of 5-o'clock shadows and tired-yet-excited expressions. Everyone has a laptop and Apple seems to be the preferred brand. They're all well-worn.
In Monan's case he needs a few notebooks, a binder and sometimes even one of the candy jars on the tables to keep down the lid of his Mac Powerbook because the latch is broken. He doesn’t dare get it fixed because it could be gone for days and at this stage in his company’s development every minute counts.
The boot campers are constantly in motion, soaking up the lectures and lessons while putting out fires and solving problems at their 24/7 jobs. The companies range from C’est Moi!, a web-based personal shopper and wardrobe management system, to In the Grove, a new concept knee brace that provides pain relief and improved mobility. There are even students from the University of Michigan's Ross School of Business.
Though their companies vary in focus and scope, these boot campers have one thing in common: they are green-with-a-capital-G entrepreneurs. A revolving door of mentors and drill instructors --successful new economy entrepreneurs or veterans in their field-- work with the start-ups for a few hours each day, giving pointers and asking questions. They're all networking, making connections and building their business plans.
"None of the businesses at boot camp have a credible business plan," says Anik Ganguly, the drill instructor assigned to Switchback. "If they did they wouldn't be at boot camp."
Switchback's Monan and Colson definitely fit into that category.
Both have resumes that ooze new economy entrepreneur. Monan has a couple of degrees in software engineering and human computer interaction from U-M, moved west to work for Apple, came back to Michigan to work for a U-M biotech firm and eventually joined some friends from grad school at a start-up called Diamond Bullet.
"When I got there there were about seven people working there," Monan says. "We got up to about 40ish and then the bubble burst and we got down to about seven by the time I left. It was a wild ride, but it was a lot of fun and I learned a lot."
Colson has mostly worked in Ann Arbor. He studied computer science at Eastern Michigan University, spent a few years doing data mining and informatics at Northern Arizona University, worked as sort of a jack-of-all-trades Head Geek In Charge at a start-up before becoming the CTO of Ann Arbor-based Pure Visibility.
They were both running their own consulting businesses when they met at a Drupal (a programming platform they both specialize in) meet-and-greet a little over a year ago. One thing led to another and they decided to start Switchback. Their consulting firm now has 16 clients, keeping the two busy just about every waking hour. Which is easy to do since both work out of their homes. An easy week means 50-60 hours. Most weeks aren't easy.
The dream is to build a successful company or line of successful companies that are self sufficient. The type of company that does things their way and lets the founders work when they want. Monan and Colson's visions for Switchback are pretty similar, yet surprisingly unique.
"What's the dream in having a kid?" Colson says. "What do you look for there? You raise them, you teach them, you grow them and the ultimate goal is for them to be self-sufficient and stable. I think there are a lot of shared metaphors there."
Monan cuts a little more to the chase.
"I'll go one step further," Monan says. "I like to scuba dive in warm water a lot. My ultimate dream is for the company to be running itself and I could take a lot of vacation time down in the Caribbean."
The voice of experience
Anik Ganguly is already there. The soft-spoken boot camp instructor has a long and impressive resume of innovation and start-up success.
The University of Wisconsin-Madison graduate got his start building software that supported medical research. By 1991 he came to Ann Arbor as a software developer and eventually started his own company, Campbell Services. He turned that into a $10 million company with about 100 employees before selling it.
He joined Ontario-based Open Text as an executive and helped build the firm's revenue from $22 million to $415 million with 60 percent compound annual growth. He left that all behind to become an angel investor in 2006.
"I got tired of sitting in seat 2A of Northwest several times a week," Ganguly says. "So I decided to focus on investing in small start-ups in southeastern Michigan."
His local investment portfolio includes the Detroit Trading Exchange, which specializes in bulk numbers of automotive sales leads. The idea is to connect web surfers looking for cars with dealers selling the cars they want... to the tune of 200,000 transactions per month. This "connecting clicks to bricks", as Ganguly puts it, lets Detroit Trading Exchange take a commission for each sale.
He is also working with an Ann Arbor-based start-up called Frontier Markets, started by a pair of former boot campers. The firm is developing pilot technology that uses prediction markets to help companies predict revenue earnings and can even predict local and national election results. The company is still pre-revenue but Ganguly expects that to change next year.
A big reason successful entrepreneurs like to participate in boot camp is to find up-and-comers like Frontier Markets. Ganguly sees a similar potential in the Switchback guys. He knows their idea has a solid foundation but only a rough idea of what to build. Ganguly has some ideas for how to help them along but tempers their expectations when crafting the elevator pitch. Angel investors and venture capitalists usually aren’t willing to write checks until they see proof of revenues. Still, developing the pitch not only prepares the company to one day attract investment, it also helps the founders hone their business plan.
"People tend to come with fairly fuzzy ideas about where their technology applies, who their customer is and what aim the customer has," Ganguly says. "That was the case with Frontier Markets. At the end of boot camp they were sharper. Having worked with them six months since then, it is far sharper now."
What it takes
Monan and Colson know they're fuzzy on their business, or at least they realized it by the end of boot camp.
That's a good thing. Ganguly not only looks for passion and work ethic in the entrepreneurs at boot camp, he has an eye for humility. "Do they know what they don't know?" Ganguly says. Boot campers who come ready to accept that they don't have all the answers tend to get the most from their mentors. And that makes it easier for pros like Ganguly to get the message across of focusing on the journey, not the end.
"Take a step. Right or wrong you're going to learn something," Ganguly explains. "There has to be a willingness to learn and learn fast, to fail fast and fail cheap and move on."
There also has to be that willingness to take challenges and criticisms in stride. Most of the mentoring sessions pair entrepreneurs with people in their field. Monan and Colson spent their first mentoring session with John Drake, an assistant professor of computer information systems from EMU. The exchange was laid back as both sides expanded on their experience and Switchback's product ideas.
The second mentoring session was strikingly different. Al Kortesoja, principal of Ann Arbor-based A K Automation Services and former partner at Ernst & Young, asked hard questions and challenged them on their technology, goals and strategy. What is the product really about? Who is the customer? How do you plan to market it? How will you separate yourselves from the pack? Who is the competition? What barriers are there?
"What's to stop a big corporation from putting 5,000 programmers toward copying this?" Kortesoja says.
The questions flustered Monan and Colson for the first hour, but defending their ideas forced them to consider things more deeply. How will the company make decisions with two owners? Who will be the leader and who will play second fiddle? How much harder will it be to find that answer a year from now as opposed to a month from now?
"There is no such thing as an equal partnership at the top," Kortesoja says. "It does not work."
Eventually, Monan and Colson began to understand why the bearded guy in the sweater vest was challenging them so forcefully. Kortesoja has been involved in building early stage software companies for decades. He has watched start-ups rise and fall. He has seen bigger firms buy, steal or gobble up smaller firms and their innovations. After about two hours of rigorous questioning the Switchback boys understood that it's much better to have big corporation take notice and write a big check for their technology than to take notice and steal it.
"Sooner or later every successful product will be attained," Kortesoja says. "Sooner or later it will be amalgamated into the big software company."
The point of boot camp is to cram a couple of years worth of business lessons into a couple of days for people who have big ideas and little time.
"This was both the absolutely best time to do this and the absolutely worst time to do this," Colson says. "But I still would do it [again]."
The days start early when the sun is just coming up and end well after it has gone done. Brainstorming, networking, mentoring and lectures fill the hours and each are filled with valuable nuggets of information for first-time entrepreneurs, such as "avoid all costs at all costs" and "strive for base hits more than home runs, because blockbusters are not a common thing."
Local-legend Roger Newton (maybe you've heard of Esperion Therapeutics) lectured on the ups and downs of start-ups and how entrepreneurs need "to be willing to put all of the marbles on the table" to move their company forward.
"Don’t stay stuck in a place you’re not thriving in," Newton offers. "Surviving sucks."
Ganguly learned many of these lessons himself in the April 2007 boot camp, when he was trying to help a U-M optomology professor develop a new device that would test for retinal diseases. He didn’t know how venture capital firms thought, what they were looking for or how to approach them. He left with a much better understanding of those things and much more.
"It was incomparable how different I was at the end of those two days versus what I came in with," Ganguly says. "More important than that is after that I made a network of very valuable contacts that I maintain to this day. That's why I come back to boot camp as a mentor and drill instructor. I think it's a fantastic institution."
Jon Zemke is the News Editor for Concentrate and Metromode. He attended Ann Arbor SPARK's two-day boot camp in October. His last story was for Concentrate was The Economic Upside Of Historic Preservation.
Monan and Colson Hard at Work-Sweetwaters Ann Arbor
Anik Ganguly at Spark Central-Ann Arbor
The Switchback Website
Al Kortesoja at Spark Central-Ann Arbor
Will Work For Food-Switchback Client
Mike Monan at Work-Ann Arbor
All Photos by Dave Lewinski
Dave Lewinski is Concentrate's Managing Photographer. He likes the dude on Switchback's homepage because he looks triumphant.