This is my last day as a guest blogger for MetroMode and I'd like to use this opportunity to shine the light on the invisible army of volunteers that are cultivating, nurturing and growing entrepreneurial communities across Michigan.
I've talked about some of the resources that are available to entrepreneurs for education, networking, and other resources. Many of the organizations and events I've mentioned are sustained by virtue of generous volunteer efforts.
Let me give you some examples:
New Enterprise Forum is a 24-year-old organization operating on less than $20,000 a year thanks to an all-star, all-volunteer Board of Directors and 85-member program committee. The committee members form five- and six-person coaching teams that work with every entrepreneur before they present at the forum.
Great Lakes Entrepreneur's Quest - a 10-year-old organization with a roster of 25 ambassadors, 130 coaches and 100 judges from all corners of the state --and all volunteers. The ambassadors attend events around the state connecting entrepreneurs with information and resources, the coaches work one-on-one with business plan competition participants, and the judges --including individuals from every venture capital firm and angel network in the state -- willingly offer their advice and feedback to assist and encourage new entrepreneurs.
BioArbor, Marketing Roundtable, and Energy Technology Forum are examples of a few of the monthly education and networking events planned and executed by groups of committed volunteers.
Annual Collaboration for Entrepreneurship (ACE) is an 11-year-old collaborative event that brought together 1,000 members of our region's entrepreneurial community this January. It's planned throughout the year by a large committee of volunteers.
We call upon our volunteers to do a lot -- and too-many-to-mention continue to rise to the occasion. Just last week, I put out a request to business coaches asking them to volunteer at TechTown's FastTrac to the Future program May 25 and 26. I also asked for coaches to help critique elevator pitch presentations at evening events on May 25 and June 16.
We have enterprising entrepreneurs like Caryn Shick in Midland, and Dug Song in Ann Arbor, putting together monthly MeetUp events that bring entrepreneurs into the fold.
And I'm just touching the tip of the iceberg.
Our volunteer army is hard at work year-round. Volunteers mentor startups at Ann Arbor SPARK's Entrepreneur Boot Camp twice a year. NEF Board members coach entrepreneurs presenting at the Michigan Growth Capital Symposium every year. Volunteers are operating membership organizations such as TiE and MIT Enterprise Forum -- and they're on the Boards of Directors at every business development non-profit organization, economic development agency, business incubator, and university. The Chairman of the GLEQ Board of Directors volunteers countless hours to our organization on top of his 'real job' running TGap Ventures, a venture capital firm in Kalamazoo. He also rounds up the venture investors that volunteer their time as judges for the business plan competition.
Again, just the tip of the iceberg.
I'm not sticking my neck out when I say we wouldn't be seeing the upswing in entrepreneurial energy and activity without these valuable contributors. Let me share one example with you...
John Berkaw, Vice President Private Banker, Wealth & Institutional Management, Comerica Bank and volunteer coach with GLEQ received this e-mail from a participant in the business plan competition:
"....I did not get everything changed, corrected, and added by the deadline for the GLEQ competition, but submitted anyway to get additional feedback on what needed correction. Your help and advice has been an integral part of us making such huge changes. I really listened to your suggestions and worked with my partner to bring him to the realization that we needed to make drastic changes to get the business open. We are truly grateful for your coaching and would welcome your feedback once the plan is changed. Having the GLEQ direct us to you has been a life changing experience and I plan to stay active in the GLEQ and hopefully be able to help others one day."?
?Thank you to everyone who has pitched in and continues to share a commitment to Michigan's entrepreneurs. We owe you. Big time.
Start exploring Michigan's entrepreneurial landscape and you'll cross paths with business plan competitions (including GLEQ's) and elevator pitch competitions. They're ubiquitous -- middle schools and high schools, college and universities, business organizations and economic development agencies -- everyone's getting into the act.
I love 'em all -- they give the much-needed incentives (cash prizes, investor face time, free rent, and more!) for entrepreneurs to get off the dime and write a business plan and prepare an investor pitch.
Yeah, okay, but does having a written business plan really matter? Is talking about your business concept important?
Yes. It's just common sense. Many businesses fail. Why wouldn't you want to do everything in your power to increase your odds of success?
Believe it or not -- I've had entrepreneurs tell me that they weren't writing a business plan, because they heard or read somewhere that "investors don't invest based on what they read in the business plan --they invest in the people".
Yeah, that's right... They invest in the people that have A GREAT PLAN.
I think what gets confused in that message is that a solid business plan is "a given" and that investors look for more than the sum of the parts (excellent idea, stellar technology, great market) -- they also need to see that a credible and experienced entrepreneur will be executing the plan. And that brings us full circle...because a credible entrepreneur wouldn't be out selling an idea that isn't thoroughly researched and documented.
Here's what Scott Shane, author of The Illusions of Entrepreneurship - The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By, discovered after much research:
"Despite the somewhat chaotic beginnings of many new businesses, some approaches are more advisable. The data show that writing a business plan increases the odds that ventures will undertake other organizing activities and product development, as well as continue in business. Completing a business plan also increases the pace of initiating product development, obtaining inputs, starting marketing, talking to customers, and asking for external funds."
If you're starting a business, you need a business plan. A written-down business plan. Period.
Equally important is your ability to articulate the business concept concisely, convincingly -- and very quickly. Hence the term 'elevator pitch.' If you have the attention of a prospective investor, customer or strategic partner, can you convey key information in a minute or two -- the time you have riding an elevator together or waiting in line at a coffee shop? It's not easy, it takes practice.
Practice presenting your business in 30 seconds, two minutes, and -- for when you get really lucky and they'll give you more time -- ten minutes. What you say to an investor will be different than what you say to a prospective customer, so prepare and practice pitches for both.
You don't have to join competitions and you may never show your business plan to an investor, but doing the work is essential. Statistics show people who write down their goals have an 80% higher success rate of achieving them. The business plan is the equivalent of writing down the goals for your business.
Just a couple more thoughts:
You can get help writing a business plan through the Michigan Small Business Technology and Development Centers. Check out their calendar of workshops and seminars here. Consider entering your plan in the GLEQ Business Plan Competition this fall. You'll be offered a business coach for advice and support during the competition.
Now, I'll leave you with these inspiring quotes:
"People with goals succeed because they know where they are going. It's as simple as that." -Earl Nightingale
"Our goals can only be reached though a vehicle of a plan, in which we must fervently believe. and upon which we must vigorously act. There is no other route to success."
-Vincent van Gogh
Picking up where I left off yesterday...I hope you agree that most of us have The Right Stuff to become entrepreneurs. But that doesn't mean it's smart to go it alone or go at it unprepared. And in Michigan, there's no excuse for doing either.
Our state is jam-packed with opportunities to participate in entrepreneurial education, connect with coaches and mentors, join industry and business development organizations, and meet potential investors, partners, and customers. The trick is to find those opportunities. Think I'm exaggerating?
Several years ago at the Ann Arbor IT Zone, my staff and I started developing a "Roadmap to Resources" -- just for Washtenaw County-based entrepreneurs. That seemingly reasonable task mushroomed and morphed into a never-ending project without a glimmer of hope it would ever be complete or accurate.
Imagine my glee when the Michigan Economic Development Corporation recently announced Michigan Business One Stop - Your source for doing business! Yippie! A statewide Resource Navigator for entrepreneurs. An electronic resource directory that assists entrepreneurs in identifying resources for technology, education and financial support by location. A front door to services and information. An answer to the question, "Where do I begin?"
Wait...there's more. in Michigan have another option. The recently-launched Moving Ideas to Market (MI2M) web portal features links to statewide entrepreneurship resources, training materials, articles, videos, events, and announcements. (MI2M is a C.S. Mott funded initiative managed by the Prima Civitas Foundation and led by a dynamic network of 50+ volunteers comprised of Michigan entrepreneurs and support organizations, including GLEQ.)? ?My favorite section -- the monthly calendar of entrepreneurial events. The GLEQ calendar lists 75+ educational and networking events throughout the state. We e-mail the calendar to 8,000 members of the entrepreneurial community at the beginning of each month -- now MI2M will be keeping it up to date throughout the month in an easy-to-read calendar format. You'll see a convenient link to the MI2M web portal calendar in my future mailings.
Granted, the MEDC and MI2M websites are works-in-progress and far from perfect, but let's applaud these ambitious stabs at organizing our complex and growing array of resources.
I can't leave this topic without pointing out a few resources you should know about. And I'll apologize in advance for failing to do justice to the many other events, programs and organizations around the state -- there are just too many to name (hence the need for web portals).
If you haven't already, get in touch with your local SBTDC office and SmartZone:
Michigan Small Business and Technology Development Centers (MI-SBTDC) - There are offices around the state hosting an extensive array of education programs and providing one-on-one consulting services for businesses of all types.
Michigan Network of SmartZones - A network of 15 business development organizations providing educational programs, business accelerator support, and incubator services to start-up technology ventures. Many are located near universities. SmartZones in Southeast Michigan include Ann Arbor SPARK, Automation Alley, OU Incubator, and WSU TechTown. A complete list of SmartZones is available here.
Other resources that I encourage you to explore include:
Universities and Colleges - almost all have added or are adding entrepreneurial programs.
MSU Extension - offices around the state offer advice on food product, biofuel, and agricultural businesses.
Trade Associations and Local Business Membership Organizations - Small Business Association of Michigan (SBAM), local Chambers of Commerce, Asian Pacific American Chamber of Commerce, German Chamber of Commerce, MichBio (for life sciences are bio-related businesses), Great Lakes Renewable Energy Association
Specialized Services and Education Programs - Biotechnology Business Consultants (for assistance with federal grant applications), NextEnergy (support services for alternative energy technology ventures), Ann Arbor SPARK Boot Camp, FastTrac TechVenture and New Venture programs, Tech Town Smart Start, Bizdom U, Lakeshore Advantage Momentum, GLEQ Business Plan Competition.
Business Development Forums and Organizations: New Enterprise Forum (NEF), TiE Detroit, Entrepreneurial Initiative for Southeast Michigan (EISEM), Jumpstart (part of MI2M), and MIT Enterprise Forum.
Don't worry about where to begin -- start anywhere -- and we'll help you plot your venture's best Roadmap to Resources.
Do you harbor doubts about whether you have 'The Right Stuff' to be an entrepreneur? If you've read some of the popular books on the subject or maybe taken a few profile tests to see if you have an entrepreneurial personality, you could be wondering.
Let me put your fears to rest. You DO have The Right Stuff.
Here's how I know. I've been watching people of all ages, backgrounds, and personality types launching new ventures for three decades. I've even started three myself with very different types of partners. I'm meeting and working with hundreds of people all over Michigan that are starting businesses right now. I can tell you that there's no single personality trait they all share. They come from diverse backgrounds and are exploring opportunities in every imaginable field. They're students and retirees. They're high school graduates and Ph.D.s and M.Ds. They're on farms and in downtown Detroit (soon to be on farms in downtown Detroit).
When I was in business school 30 years ago, the oft quoted statistic was that if you didn't start a business by the time you were 28, you never would. Bunk! Your father had to have started a business (not many moms did back then) for you to have the best chance of being a successful. Baloney! You had to be an extrovert. A visionary. Maniacally single-minded and driven by demons to succeed. Nonsense!
The reality is entrepreneurship is a very common vocation, with 11% of U.S. households owning a business and 13% of people in the U.S. between the ages of 18 and 74 currently in the process of starting a business. According to recent surveys, 70% of high school seniors are planning to start a business. 50% of college students believe it's a smarter career choice than getting a job. Every year, more people are starting businesses than getting married or having children. 40% of us will be self-employed at some point!
Who are all these entrepreneurs? Scott A. Shane, author of The Illusions of Entrepreneurship - The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By, draws on the data from extensive research to provide an accurate assessment about who becomes an entrepreneur and why, and which factors lead to success. I urge you to read his enlightening book, but here are some points that caught my attention:
• People are more likely to start companies in poorer and more agricultural places than in places that are richer and more reliant on manufacturing.
• People in places with high rates of unemployment are more likely to start businesses than people in places with low rates of unemployment. (Good news for Michigan!)
• Most new businesses are not started in glitzy, high-tech industries but rather in pretty mundane, run-of-the-mill industries.
• The most typical entrepreneur isn't a Silicon Valley-type, but rather a regular guy, married and in his forties, who started his business because he didn't want to work for someone else.
• Psychological factors account for very little of the difference between entrepreneurs and other people.
• The characteristics that make people more likely to start businesses aren't all desirable; people are more likely to go into business for themselves if they are unemployed, work part-time, have changed jobs often, and make less money.
• Entrepreneurship is not a young person's game; middle-aged people are more likely than anyone else to be entrepreneurs.
• Education doesn't hinder entrepreneurship; getting an education makes people more likely to start businesses.
• Studying business isn't that important to becoming an entrepreneur: studying things that correspond to occupations in which a lot of people run their own businesses is just as likely to increase a person's chances of starting a business.
• Working for someone else increases the chances that a person will start his own business.
So next time you're introducing yourself as a newly minted entrepreneur, stop imagining your listener mentally comparing you to Bill Gates, Larry Page, or Michael Dell -- and dismissing you as a wannabe. Extend your hand, smile confidently, and know that it's not the rare few that succeed -- it is and will be many of us.
Tomorrow: The Road Map to Michigan Resources
As you'd expect from someone running a business plan competition, I'm a big fan of competitions -- make that a huge fan. And it appears I'm not alone. Even the Obama Administration is using contests to spur innovation within its ranks.
I didn't always feel this way. In fact, when I first took the position at Great Lakes Entrepreneur's Quest, I firmly believed the value of the entrepreneurial education programs we offered exceeded the slightly dubious value of offering cash awards to winners in a contest. Oh boy, was I wrong. I wasn't seeing the big picture.
I had my eyes opened pretty quickly, when I met with a member of the GLEQ Board of Directors -- Bob Skandalaris. Bob is a remarkable Michigan-based entrepreneur, author, and philanthropist. He wrote Rebuilding the American Dream; Restoring American Jobs and Competitiveness through Innovation and Entrepreneurship. He's the founder of Noble International Ltd. and Quantum Associates, among other companies, and responsible for establishing the Skandalaris Center for Entrepreneurial Studies at Washington University in St. Louis. A key driver in the success of the WU entrepreneurial program is (surprise!) the Olin Cup Business Plan Competition.
Here's what I learned in my first meeting with Bob: Big Prizes are important, but not for the obvious reason. It's not because $100,000 helps a start-up more than $5,000, although it does -- it's because big prizes get attention and trigger a positive cycle of activity. I know for a fact he's right. We'll be presenting the $100,000 SmartZone Award for the first time at our awards event on June 10.
The SmartZone Award was announced when we launched this round of the GLEQ Business Plan Competition. In response, we had 302 entrepreneurs register for the competition, up from 175 in the fall. More and better plans lead to more engagements with coaches and mentors, more attendance at educational and networking events, more interest from investors, more support from sponsors, and more publicity. And if Bob's experience proves out here, we'll see the deals get done -- leading to greater participation on all fronts next time around -- and ultimately, a healthier economy in Michigan.
Done right, with a strategy to use a contest as part of a more comprehensive ecosystem of entrepreneurial support -- business plan competitions work on multiple levels. First and foremost, they work with human nature. People love to compete and win -- and most people are amazingly deadline driven. We love to win money and have our plans validated. Entrepreneurs especially, because they're passionate about their ideas and desperate for money.
Having deadlines spurs action. Think about it...at 8 a.m. Friday, March 5, 182 entrepreneurs were registered to participate in the competition. By the 5 p.m. deadline, 302 were signed up. I guarantee that those 120 entrepreneurs did not find out about GLEQ that day. Like many of us, they took action when the deadline was looming.
Contests are also a clever marketing gimmick. You don't have to spend a fortune to get the word out about all the entrepreneurial programs, organization, and events going on in Michigan. Which is a huge challenge, because there are a lot -- and the names are confusing (SBTDC, EISEM, NEF, BBC, SmartZones, to name just a few). When you announce $100,000 awards -- word gets around.
Instead of all of us desperately seeking entrepreneurs -- they self-identify. Once we know who they are, it's easy to let them know what's going on. GLEQ sends out a monthly calendar of entrepreneurial events to 8,000 addresses, we support university business plan competitions and direct our readers to membership organizations, educational programs, and opportunities to get in front of investors.
So next time you hear about a business plan competition and think it's frivolous, remember GLEQ. We'll be presenting $250,000 in awards in June -- in a competition that is engaging 302 entrepreneurs, 130 coaches, and 100 investors in a cycle of activity that's advancing entrepreneurial activity in Michigan.
Tomorrow: Do You Have 'The Right Stuff' for Entrepreneurship? You'd be Surprised.