With unemployment soaring, small businesses shuttering, and even some large chains withholding rent, the effects of the COVID-19 pandemic are reverberating through our communities. Many people wait on relief from the government in the form of stimulus payments and unemployment benefits. Businesses scramble to secure emergency loans, payroll support, and new ways to gain revenue. Oftentimes lost among other dire news is the plight of nonprofits and charities, who languish as donations dry up and revenue-producing events are put on hold.
Cash and Equity Giving
Jack Dorsey’s $1 billion equity pledge is an eye-catching reminder of how important it is to support these causes and organizations now if you are able to. Many are dependent on revenue from events that can’t happen and donations from disposable income that has evaporated. Our Founders Pledge is built on the idea of baking giving into your venture as part of your short-term and long-term financial plans, to support your community, and to support the organizations that support you with a mix of cash and equity giving.
One nonprofit that can use your support at this time is the CentraCare Foundation. From now until May 30th, your donation to the COVID-19 Emergency Response Fund will be doubled, due in part to a gift from our partners Ryan and Rob Weber.
Time and Effort Giving
During this time many businesses and leaders have risen to the challenge to support their communities through non-cash/non-equity donations. Our portfolio companies are also active in the fight, supporting local businesses, hospitals, and healthcare workers on the frontline. Here are four examples of their work.
1. Dispatch launched same day delivery for local businesses. This service aims to help alleviate supply chain difficulties during the pandemic
2. 2ndKitchen launched a new service to offer delivery for bars and breweries. This is a lifeline for these businesses when they have to be closed, with 2go allowing bars and breweries to sell beer, food, and merchandise for pickup or delivery- for free.
Clinician Nexus partnered with MN COVIDsitters to provide the technology platform that connects volunteer medical students with healthcare workers to provide free childcare during the pandemic.
4. PrintWithMe is holding a Face Mask Drive. The face masks, unused N95 masks as well as simple surgical masks, are being supplied to Chicago-area hospitals.
Giving for a Better Future
In consideration of the pandemic, the Webers have expanded the list of colleges they support to include North Hennepin Community College (NHCC), one of the largest Minnesota State colleges serving a very diverse student body with many low-income students. Ryan and Rob are alumni of NHCC, where they gained the skills that helped them bootstrap their own startup.
The Webers have donated $10,000 to NHCC’s Foundation to directly aid Graphic Design students studying product design, a program they see as well-positioned to fill the large UI/UX design talent gap in Minnesota and the surrounding region. Their support of this program goes beyond money to include volunteering as mentors, promoting awareness of NHCC’s Graphic Design program, and using their networks to help students connect with internships and employment opportunities.
We continue to support and evolve our own educational initiative aimed at filling the gap of disciplined startup education in the region, formerly known as the Great North Labs Startup School. The programming is now known by a variety of names, and collectively as the Lean Startup School. The new iterations have come about by partnering with Red Wing Ignite and ILT Studios. These partners have allowed us to develop the programming as a white-label offering to communities around the state, with a particular emphasis on Greater Minnesota. There are two cohorts currently, in St. Cloud and Red Wing, with more planned for the future.
We will get through this crisis, one way or another. Whether or not the federal government gets behind legislation that supports startups with an influx of capital, such as the New Business Preservation Act, there is a broad community of entrepreneurial support and a healthy, growing startup ecosystem in the region. We will continue to cultivate transformative innovations, successful entrepreneurs, and tech startups in the Upper Midwest!
Valuable startup ecosystem organizations we support include MN Cup, Beta.MN, Minnestar, SCSU University Foundation, College of St. Benedict and St. John’s University, Greater St. Cloud Development Corporation, gBETA Greater MN-St. Cloud, SingularityU Minneapolis-St. Paul, and Silicon North Stars. If you also find them valuable and you are able, please consider giving to them during this time of need!
UPDATE: Signup here for St. Cloud or Red Wing locations! Or View Course Information.
Greater Minnesota has been underperforming in its formation of new startups. When we founded Great North Labs, we recognized this need, and committed to changing it before the region could fall further behind. We founded a Startup School to provide the educational components that we saw local entrepreneurs were missing. By partnering with Red Wing Ignite and ILT Studios, we will greatly expand our reach, capacity, and educational offering. This co-created, yet-to-be-named, Greater MN Startup School initiative will reach across the state to cultivate founders and startups in areas ready for the impact of entrepreneurial innovation.
The Necessity of Startup Entrepreneurship
From 2000-2017, 52% of companies in the Fortune 500 have either gone bankrupt, been acquired, or ceased to exist. Digital disruption is the primary catalyst of change. Adaptability is key to success. A key to any community, or organization, strengthening its adaptive intelligence is for it to master a disciplined approach to startup entrepreneurship. Disciplined startup entrepreneurship isn’t new but techniques have emerged the past 15 years that emphasize a more agile process for startup entrepreneurship that is needed in an environment with such accelerating changes.
One measure of the strength of startup entrepreneurship in a community is the number of first venture financings that it produces. The Twin Cities (Minneapolis-St. Paul) now have 1% of the countries first venture financings, but Greater Minnesota (generalized as non-urban MN, or specifically as all of Minnesota outside of the Twin Cities region) has lagged behind. Comparing the efficiency –the number of first venture financings per population– of the Twin Cities to the next largest markets in Minnesota is revealing. St. Cloud, Duluth, and Mankato have 50% or lower startup efficiency. Rochester (home of the Mayo Clinic) is a standout, and outperformed with a 200%+ startup efficiency compared to the Twin Cities.
The Need for Startup Education
My twin brother and Great North Labs Partner, Rob Weber, and I have previously angel invested in 25 startups from 2006 to 2017 while scaling our own startup with offices in Silicon Valley and Minnesota. I served for 10+ years as Chief Product Officer, and noticed an inefficiency in the startup teams resulting from a lack of disciplined startup entrepreneurship practices compared to Silicon Valley. I struggled finding Minnesota-based product managers trained in the more adaptive style of product management made popular by lean startups so we invested in developing a common process and trained our team on it.
As investors, too often we’d hear from a founder that they just need $300K to prove out their latest thesis. We’d meet teams that burned through $500K in angel funding that still couldn’t present evidence validating their thesis. This evidence we’d expect a product manager to answer at our company in their first two months of leading a new product idea with nothing more than qualitative research.
For most of the funded startup teams, they were immersed in the market and sought to solve a problem they thought they understood well. However, they usually struggled to identify the problem that’s the most impactful to solve, the minimal viable solution that solves that problems needs, and an offer that communicates the value proposition clearly and for a price the buyer will accept.
The Great North Labs Startup School
Great North Labs was formed in the fall of 2017. In addition to our early-stage venture fund, we started an initiative called the Startup School to invest in strengthening our disciplined startup education in the region. We led a group of practitioners who ran workshops on Digital Transformation, Lean Startups (most frequent), and Agile Development. The free or low-cost workshops attracted over 200 participants through the end of 2019. The workshop materials were also shared with many others and we gave lectures at a number of universities and conferences in cities across the Upper Midwest.
For the Lean Startup Workshop, we found that participants were engaged with low attrition rates and heard from them after the fact as they reported on their progress. We had the Executive Director of a significant non-profit mention using the process to discover a new innovation they were pursuing to commercialize, several tech founders launching their MVPs after researching, and many staying in touch to assist and support each-other but also in some cases joining forces on a startup.
We saw a greater gap in the smaller markets across Minnesota and throughout the Upper Midwest. However, one bright spot was in Iowa. There, the state had invested in programming similar to ours, and had expanded across the state with their Venture School initiative.
The Greater MN Startup School Initiative
We are taking the experience and lessons learned along the way from our initial Startup School, from Iowa’s Venture School, and from other startup education programs to expand our program to our new Greater MN Startup School initiative. This new Startup School will make the skills and training necessary for disciplined startup entrepreneurship more accessible to Minnesota entrepreneurs than ever before. It will also open up networks and possibilities for people across the state that were previously unavailable. Across the state, we hope to see this cultivation of startups drive innovation, economic activity, and value creation.
What: A new set of workshops designed to strengthen the skills in disciplined startup entrepreneurship and provide an applied learning environment that allows founders, and their supporters, to work from idea conception to commercialization.
Participants will learn innovation techniques for identifying, defining, sizing, validating, and commercializing venture scalable startups. There will be new online and in-class programming to help you learn with hands-on practical activities, mentorship, insights, and opportunities to network to help you build confidence in your startup thesis and master the art of gathering feedback, directly from your future customers.
When: The first class for Customer Driven Innovation will run from March-April. The first class for Business Model Foundation will follow in early summer. The first class for The Lean Startup will run from mid to late summer. Web-site registration will be open in February for the classes and we will follow up with additional details.
Where: Red Wing and St. Cloud will offer the same classes in parallel but on different days
Why: To teach participants about design innovation, the Lean Startup process and how to identify, develop, define, validate, finance and commercialize their ideas so they are more successful in developing their own startup as a new company or inside of an existing one.
Earn a certificate for completing each of the programs and strengthen your credentials for a career as a Startup Founder or Product Manager. Initially, three workshops will be offered and each will feature a program certificate for those that successful complete:
Program 1: Customer Driven Innovation – Gain fresh perspective that will expand your thinking and push you to bold new ideas through practice and discussion within the class and interactions with the instructors and classmates. You’ll come up with a number of potential ideas and pick one to develop as a concept pitch.
Program 2: Business Model Foundation – This program builds on the Customer Driven Innovation course to help you form a strong business thesis. Learn to document your initial business plan and quickly analyze it’s potential, advanced customer discovery interview methods, and skills needed to help gather better feedback and ensure you are solving the right problem.
Program 3: The Lean Startup Certificate– This program builds on the Customer Driven Innovation and the Business Model Foundation courses to leverage the creativity and collaboration within a startup team to develop and execute experiments that test your business thesis, synthesis key learnings, and to explore alternative thesis based on those learnings until you find a business thesis that meets your success criteria. This program will culminate with an idea pitch event where an investor panel will award cash prizes to the top pitches.
Building up the Region
The Twin Cities has emerged as a strong startup community in the Upper Midwest. There are parallels between Silicon Valley and the Twin Cities that we can learn from and try to replicate in Greater MN, and potentially the entire Upper Midwest region.
Silicon Valley benefited from an emphasis on experimenting with practical skills in emerging fields, a network of VCs, links with Economic Development Departments, local universities, and local LPs. Our vision is to partner with all the aforementioned entities to serve the entrepreneurs of Greater MN.
While this is our pilot year, we already have interest from a variety of organizations. There is strong demand from around the state. If your community is interested in our program, please contact us, and we can stay connected and help with preparations as we make plans for expansion.
As far as involved organizations go, we’d like to take a moment to thank LaunchMN in particular, for their financial and operational support. This new MN DEED initiative led by Neela Mollgaard has helped make this new Startup School initiative possible.
We have an opportunity now to transform our rural markets into strong startup communities, and improve their resiliency in a world that increasingly requires adaptive intelligence and innovation skills to succeed.