In this episode, Rob and Josef talk about a new book out about network effects, “The Cold Start Problem” by Andrew Chen.

They speak with Una Fox, who works as a Chief Global Data & Analytics Officer. Una was previously a VP at Disney and a Director at Yahoo, and is a truly data-driven leader. Una has known Rob for over a decade, and talks about personal network effects and startup communities, and gives advice to founders for getting value from their organization’s data.

 Who does Una see executing? Tripp.

Transcript:

Josef Siebert 0:09
Welcome to the execution is King podcast where we talk to successful startup founders, investors and ecosystem builders to uncover insights and best practices for the next generation of great global startups. Today, I’m talking to rob Weber, managing partner at Great North ventures. How’re you doing today? Rob?

Rob Weber 0:29
I am doing great. How are you doing? Joseph?

Josef Siebert 0:31
Good, good. I’ve been reading this new book, actually, by Andrew Chen. He runs this program called the reforge program. He’s also a venture capitalist. I applied to that program a couple times already. But I’ve been rejected, because I work for a VC and they strictly accept startups to work on all of these, like network based digital tactics, basically for growth. But it’s really great book. I know you’ve read it as well.

Rob Weber 1:00
Yeah, I think the the cold start problem, you know, I came from the consumer app, kind of social app space. And so I worked, you know, a lot with social apps and marketplaces. And of course, Andrew Chen, who wrote the book was that it’s kind of famously in the growth team at Uber, to their rapid growth, before going over to Andreessen Horowitz. And, you know, for what it did for me was, it’s a, there’s about an eight year period where we were operating these business native acts, which put us kind of in collision with all these leading consumer social apps and marketplaces and games around the world. You know, I found that book to be really clarifying in terms of a lot of the things I remember reading about learning from talking to people at conferences about, you know, how you how you, like, spin up these growth teams, how do you create this kind of growth mindset, there really is sort of a playbook for how you create these sort of multiuser kind of network driven applications. And some of the examples how people fake it are really interesting, like Tinder with college party to college party, just signing up people are, these are like, my favorite stories, because, you know, once they get big, and they scale up, and they they figured a repeatable way to do that. Okay, you know, I think people just sort of think of them for what they become, almost every one of these types of businesses have this sort of, they didn’t start out with a big network effect or a big audience. So how do they break through, you know, and become one of these gigantic successes,

Josef Siebert 2:23
they had to do things that didn’t scale? Right? To get over that the cold start problem?

Rob Weber 2:28
Yeah. And I think sometimes I really liked in there to sort of kind of reminded me, like, you know, is it just like a big launch? And you get a bunch of publicity? No, no, not really. Usually, that doesn’t work that well, like normally, it’s about this, like atomic unit, how do you create value within maybe even just two people to start with the examples of big successes generally, that’s kind of how they start. But this talks a lot about like, you know, kind of the startup world, you know, and the network kind of driven business models. But I think, in this episode, una Fox, you know, we’re going to talk a lot about kind of the network effects of just working with people and community, and how your own career can kind of take advantage of network effects. And it’s kind of a full circle moment. For me, I think I met Oona 15 years ago or so? Well, she was an executive at Yahoo, which was our largest customer at the time at my prior startup. And we did you know, millions and millions of dollars of business with the Windows team over maybe a span of, I don’t know, as five years, maybe 10 years in there. And I that put me in really close contact with Oona her leadership style and the team. And so I kind of lost touch with her. I know, she eventually left Yahoo. And Yahoo was a lot different company, you know, 15 years ago than it is today. Or certainly 25 years ago, like in the 90s, like Yahoo, people, you know, the Gen Z years probably don’t recall, like, don’t remember, they would have been around. Yahoo was like a Juggernaut and the internet in the 90s and early 2000s, you know, people before Google even came onto the scene, right? Like in the 90s. So you think about like, I kind of lost touch with Luna, she went on to Disney, where she worked on, I think, initially, she was on the E commerce team that launched marketplaces for the Disney Stores. And then I think she also worked on the Disney plus launch, which was obviously one of the most successful consumer subscription business launches of all time. And so I remember reaching out to her just to check in like six months ago, and we just started to hit it off. And I think is the trust we had built over the years. You know, while working together at Yahoo. You know, it was it was almost like not missing a beat. And I found that, you know, throughout your career, whether it’s who you partner with, with your business, who you choose to work with, and recruit to your company, like I think, I think that’s one of the opportune one of the opportunities I love about no working in businesses, you kind of get to pick and choose who you work with. And once you’ve built up that trust in, you can kind of it can be repeated in how you build teams, how you lead teams, who you work with? So there’s a lot of there’s a lot of this sort of network effects in business beyond just, you know, scaling social apps.

Josef Siebert 5:08
When a fox is the chief global data and analytics officer at Aristocrat, welcome to the podcast Duna.

Una Fox 5:15
Hey, Joseph, it’s great to be here. Thanks for having me.

Rob Weber 5:19
So soon, I know you’ve been a part of launching some really impressive digital businesses, and initiatives at some larger companies like Yahoo, and Disney, can you kind of walk us through some of the leadership lessons that you’ve learned throughout your time kind of scaling these kinds of digital businesses,

Una Fox 5:35
I’ve been doing this now for over for almost 20 years. So there’s lots of different use cases and different experiences that I’ve been through. So when I was at Yahoo, it was really all about the Ad Tech experience and building out new digital products. And I was having a conversation with somebody and at a Silicon Valley conference a few years ago, and talking about ideas. And really, what I have seen over the course of 15 to 20 years working with different companies is that sometimes there is a product that you’re working on, that you have aspirations for that product, but maybe the timings just not right. You know, either it’s a b2b product or a b2c product. But even though you’re making progress on building that product, the timing might not be right for the market. And then at some point, years later, you see that product evolve, or it appears and the timing is right, and you think, Oh, my goodness, this is this is what we were waiting for. So when I was working at Yahoo, back in Oh, six, and oh seven, we started to build out a display network like we had for search. And at the time, we were trying to cobble together all of the systems that would allow us to do that, right. So basically, what we were doing was building partnerships with publishers to extend inventory, add inventory, and impression inventory, for Yahoo, and also for those publishers, so that we could reach consumers, either if they were on Yahoo, or at the publisher site, or somewhere else, I think it was a great idea was a great concept. And we were working really hard to make it happen. And then I think a lot of those people, technology people left and they ended up starting the DMP framework in products less than 10 years later. And then they showed up as DMPS. And when I was a Disney, I ended up being a client and onboarding Blu Kai, which is one of the biggest DMPS that was out there at the time. And I really understood the technology very quickly, because I had worked as an executive in the team at Yahoo. So I don’t know if that’s something that resonates with you.

Rob Weber 7:51
I mean, I think about timing, and you have these examples of like, you know, in the late 90s, as a teenager watching things like web van explode in the.com box, and then many years later, you know, seeing what happens when you have a mobile device with a capacity of an iPhone web ban wasn’t a bad idea. You know, maybe the timing was bad. To your point. I think we talked about this in the prior episode, Joe Stryver, a friend of ours, who’s the first UX hire at Google. And he talked about going through these compute paradigm shifts from like, the web to mobile. And now we’re headed everyone’s buzzing about Metaverse, and AR VR for all wearing 3d glasses in two or three years. How might that change some of the ideas from 10 or 20 years ago? Because there’s probably going to be some new things that maybe the the timing wasn’t right before. But with some new compute paradigm, maybe the timing will be better,

Una Fox 8:41
even 10 years ago, right? So 10 years ago, it was all about QR codes. So everyone was talking about QR codes needed to have a QR code. And then it got to a point where when you see it has a business that had a QR code, you’re like, what is the point of the QR code? Well, COVID COVID, changed all of that, right? The use of the QR code and the digital device, and how ubiquitous that has come and the restaurant and bar industry or any other services that are using QR codes, they become essential. It’s just what is old is new always. And I think you’re right about the glasses, actually. And I think that we’re going to see an explosion now and in the use of headsets, but it may not be in the way that we think it is it’s going to evolve VR is going to really evolve very quickly. Now there’s, I have a very good friend too. She’s done serial startups in the gaming space. And she has a company called trip, which the product is really using VR experiences for depression for mental health. And it’s been extremely successful. They’ve been working on this for a few years, but they’ve now really, you know, hit their stride. Yeah, that’s another example. Right? It’s just going to evolve very quickly. And look what happened with streaming and due to COVID as well, right? Everybody’s at home, no one could go to the movie theater. And so then suddenly it accelerated movies being released straight to streaming.

Josef Siebert 10:08
Yeah, it was interesting, not just how the technologies come back around, you know, as the circumstances change, but also how the people in the companies like, like these new initiatives that came on to what you were working on how that circled back when you move to Disney, and then suddenly you’re a client of, of these people you’ve been working with before?

Una Fox 10:26
Yeah, it’s another aspect of the network effect, right? You need a network effect around a product to make it successful. But then you also need a network effect and in your community to build relationships to business, hire talent, right?

Josef Siebert 10:41
Yeah, you need a network effect around your product and your business and your and yourself. Yeah, absolutely.

Rob Weber 10:47
That really resonates with me, I come to really appreciate being able to work with people that I built a trusting relationship with. Also just seeing people who can execute when you work in like in the world, there’s a lot of people who make promises and under deliver, and they don’t really hold up to their commitments. And so I think reputation really is earned. And I think that’s why I think the network effects of kind of building a career around relationships, at least certainly resonates a lot with me.

Una Fox 11:15
Everybody enjoys working on a mission together and getting things done. And I think if you are able to work in a team, you’ve got a harmonious bond together, you’re getting products out the door, you’re getting things done, you have a mutual feeling of success together, then when you when you leave that experience, you go work in other places, my experience is that I have maintained those bonds and those relationships with people through the course of my career. And they still call me we call each other, we refer each other, we advise each other. I don’t know how I could exist in my career without that, right. I mean, the fact that you and I and Ryan work together, you know, over 15 years ago now, and we’re still connected and can call each other and, you know, I think it’s a pretty good easy conversation, right? We have, we have a trusted relationship. So it’s absolutely critical. It’s all about having good positive relationships with people.

Rob Weber 12:14
I think we talked about that. I can’t remember which episode but someone was talking about, like recruiting maybe that was also the Joe Stryver episode, who was at Google and how one of the things he observed in the Bay Area was how you had these like clusters of people in like product and engineering teams, kind of going from company to company, but together, because, you know, the company was kind of less important to them than just the who they worked with. And I think that was kind of an interesting thing, when you’re if you’re scaling a business really fast, you know, if you get a certain group of people, they’ll probably helped bring other talented people.

Una Fox 12:45
Absolutely. Yeah, for sure. Are you both familiar with the Maya Angelou quote, which is, maybe nobody will remember exactly what you say, but they will remember how you made them feel? You know, there’s such a huge conversation now. Everybody took time and took stock of their lives during the pandemic and during COVID to evaluate what they want to do. And people absolutely do not want to be working in toxic work environments, right? So it is it’s very important to have, first of all, for yourself a good understanding of what you want, as an employee, and what kind of relationships you want to have with people around you. And then as a manager and a leader, you really have to have an empathetic perspective, when it comes to working with people understanding every individual situation, people are not going to want to work in toxic workplaces. So I just think it’s really important for managers to think about how they make people feel, right? They’re working together on a day to day basis. It’s just critical.

Josef Siebert 13:50
As a leader at a big company or at a startup, do you have any input for people who might be leaders, when it comes to setting a great company culture?

Una Fox 14:00
I actually think that there’s a lot that big corporate cultures have learned from startups. You know, there’s many different examples, but one of the things where it has impacted us in a very positive weight is the importance of offering people flexibility, it seems to have been easier to create more flexible working environments for people in startups. But it has allowed bigger employers to offer the same flexibility to their employees as well. In fact, I would say it’s it’s really influenced a lot of the ways big corporates work now. And big corporates want to offer these different types of tools because they’re competing for talent in the same marketplace. The one thing that I would say though, that’s maybe easier for a larger company with more funding or more infrastructure is to be able to provide all the functions like training and people and culture programs. So managers are taught how to lead and manage people, what’s acceptable to do what not to do. I didn’t know that there isn’t that type of infrastructure, typically in a startup right away. So if it’s all down to one leader, and they’re not really thinking through how people are feeling burned out or ignored or not valued morale, I know component pretty quickly, we could think about that is just what’s been happening during COVID. Write with everyone working at home, we had to think about how we reinvented meetings, make them shorter, so that people weren’t getting completely burned out. So we went back into exploring what we’ve learned over the years in tech development, which is doing stand ups. So instead of having a one hour meeting, in person meeting, normally in the office, you do a 15 minute stand up, instead of sticking these one hour meetings on the calendar, giving people short breaks between meetings, so that they’re not getting that Zoom burnout. So that’s one example of leadership. But the other thing I will say is that there’s been research and not just the Zoom burnout, but it’s being on camera versus being on audio, and particularly for women. There is some research that was showing that not everyone wants to be on camera all the time, I think women do feel a pressure in particular to look good. And I do think as a leader, it’s important to show the way and say, if you don’t want to be on camera, you don’t have to be on camera, you can have your camera switched off. And once you’re participating in the call, and you’re actively engaging, that’s fine. I think that’s the type of leadership we need to show up with today. I know Rob, what about you? What’s going on in the startup world?

Rob Weber 16:35
Well, I have to say, you know, for us, when we have a portfolio of something like 30 companies, I think, you know, early on, I’ve always been fairly flexible in my approach. So I would let the founders kind of guide how they wanted communication to flow a little bit. But then over time, I start to feel, you know, where was communication, you know, being managed most effectively. And what I found, I use board meetings as an example, the best boards that I’m on for startups have like a one hour monthly call. There’s not a lot of heavy handed governance, when you’re in a startup, usually, you’re being agile, you’re responding to customer feedback, you’re constantly thinking about prioritization with limited resources, I found like the best run boards for startups are usually kind of that kind of monthly cadence where it’s one hour, check in, talk about where you know, where you been, where you’re going, versus like, maybe the more typical, like mid market board meeting is like three hours once a quarter, four hours, maybe all day, it’s just not effective in especially, I mean, this is, I think, also part of being just remote. I think it’s much better to have more frequent, shorter check ins, at least as an investor, what do you start? You lose people’s

Una Fox 17:48
attention? Right? I mean, you lose people’s attention, especially if I mean, I have been on all day, like you, I have been on all day QBRs. Those are tough. Those are tough days, right? Yeah. And I assume that I as I am not the only person that finds that to be a tough day, I just don’t know how on Zoom, everybody can be focused for a full day. That’s, that’s a tough one.

Rob Weber 18:19
Kind of going in a different direction. I know, your current role, you’re kind of leading analytics. I know, when we worked together while you were at Yahoo, in digital advertising, analytics are so much in performance are so tied together that it’s hard to find a digital media or digital advertising kind of business or product that is that isn’t really analytics, or strong from an analytic standpoint, or probably wouldn’t be a very good digital media technology or product. Right. But when you think about, you know, you know, I guess I’m not as familiar with your work while you’re at Disney or not, in your current role, you know, how does analytics kind of play a role when you’re thinking about scaling digital businesses?

Una Fox 18:57
First of all, if you take businesses like and particularly for, for founders that are in the digital space, if you if you’re looking for direction, the companies like Uber, Meza Netflix, Amazon, Airbnb, their entire business process is mostly is digitized. And so therefore, it’s mostly trackable, and scaling using analytics. And companies like that is a lot easier than doing it in a more traditional business that doesn’t have the whole process, digitize maybe like manufacturing, or traditional retail, or automotive, aerospace, etc. And the reason is that there are still certain elements in those business processes that aren’t completely digitized. They have elements that rely on a lot of manual data input. And so in those organizations, there’s a huge amount of effort that has to go into harmonizing all of the data, streamlining processes to go with that And even then, you know, uh, now this is this is all rapidly changing as we’re having this conversation because companies such as Amazon, they’re reliant on AI processes to provide services. And the traditional world is transitioning to that, too.

Josef Siebert 20:17
So what kind of practical advice do you have for founders who really want to be data driven? And like build that into their startup?

Una Fox 20:26
Good question. I think, first of all, the term data driven from the outset, or creating a data driven culture, really what that means is, are you using the right information to make the best decision possible? You know, startup founder might be thinking, Well, there’s only two of us here. What does that mean? It means that you have to bring the data to any discussion and a stand up any meeting when you’re getting together. If you’re having stand ups, talking about how many customers you’ve signed up, or something that’s going on with your software development lifecycle, or anything, any kind of tracking, if you’re not taking that tracking data to a stand up, and you’re not using reporting or data points, when you’re having a discussion, that’s an issue. And I’ve been in organizations where everyone’s talking about how we become data driven as a culture. And yet no one is bringing a report into a meeting, you know, and looking at the end of the data. So it turns into a conversation more about gut feelings and you know, things like that, when you or your team are encountering a problem, do you look at the numbers to find solutions and validate assumptions? And if not, you need to be embedding that into the heart of your culture. That’s number one. Number two, using data to drive decision making. So when you use analytics to understand exactly how your customers interact with your product, and you’re able to see clearly, where are they finding value? And where is their friction? Where are you getting a lot of maybe emails or customer service issues with products, the right data will allow you and your team to always focus on the most important problems and opportunities, and whether you’re measuring the right things. So for example, if you’ve built a streaming product, and you are not able to have that delivered into an environment on a real time basis, so you can’t really troubleshoot a problem, because that’s something that’s happening in real time. That’s a big gap, right? Using self service analytics to make data accessible. So your problems are going to get solved faster when the information is flowing really freely. And if you don’t have the skill set, to build that for yourself, for example, your mobile app data, maybe you’ve got push notifications, maybe you’ve got a bunch of different processes that are tracking data around your mobile app experience. And they’re in different places, or maybe they’re with third party tools. And you’re struggling to bring that together and look at that maybe you’re going into different tools to look at different things, you know, the freelance economy, you should be able to get a sequel analysts to pull that together and pull some backbone reporting. So it’s easy to develop, and you can get the information when you need, it’s not holding you back, you’re spending hours manually pulling reporting together. That’s just something that you could easily outsource. And you shouldn’t be doing that yourself. So you’ve got data, then you’ve got reporting and analytics I took typically reporting and analytics, I can join together. But then you know, you need to, then there’s the sowhat moment. So with the right tools, you can look through your customer data and other information to look, find correlations that can be used to find maybe some pockets of growth or areas you’re overlooking. That’s what I would call insights. Right? So for example, do you feel you understand who your ideal customers are? Do you have the data to support that? And if the answer is no, the process of backing up some assumptions with data could be really eye opening. It could be something as simple as you’re going to launch a survey, ask a variety of questions, put that data together, and then compare that with what you’re actually seeing with customer buying patterns, put it together. And then now you’ve got some insights that allow you to validate how the your customers are interacting with your product. And maybe that’s going to open the door to opportunities that you weren’t aware of. So creating that data driven decision making culture is not a one step move. It’s have multiple steps along the way. And it really is a mindset. So it’s just, you know, always thinking about the data points, how it’s informing you moving forward, that you were able to get it quickly that you’re able to parse it out quickly. Now, those are the types of things that that you want, really.

Rob Weber 24:59
What do you think about You don’t what does it take to build a strong startup community or because you’ve been a part of some really strong startup communities?

Una Fox 25:06
Well, I guess I have been, even though I have a really strong corporate experience. I was exposed to the startup community in Ireland, probably more than 10 years ago, when I founded a coding Academy solution for kids here in Los Angeles. And we were connected to it was a grassroots organization that came out of Southern Ireland, and called Coder Dojo. And so another friend of mine and I, we set that up here in in Los Angeles, and we just started to get really connected with the tech community in Ireland because of that, the startup tech community. And we’re for over five miles apart between the west coast and an Ireland, but we had Twitter’s, so we just started to get to know all these different people on Twitter. And that’s how I discovered that Arland it’s a small and very tight community. So the tech community is extremely strong, and very tight. And then there are people there who’ve been worked as engineers, either in startups or maybe in larger corporates, and then they left and they went in, they did a startup. And once you have that community of people who are encouraging people supporting each other, then there are also several people who have been very successful. And so as they came out of there, similar to what you’re doing, you know, they set up VC, you know, and venture groups and supported and mentored other startup leaders. So Arland has this very, very, very strong networked people. I mean, Irish are great networkers anywhere. I mean, pretty much live all over the world, and we stay connected. And then it’s irresistible. When you meet another Irish person, you say, Okay, do you know, Rob, and what time does he come from? And oh, and I know the person’s mother and the father, I went to college with this first. So we’re just like, always, you know, constantly networking. But I think the the other thing that put Ireland on the map was, you know, the creation of Web Summit came out of Dublin with the work that Patty Cosgrave did. And now it’s obviously moved to Lisbon. But Web Summit has such an incredible reach across the world. I mean, it brings startups from all over the world. And it has really created a hub of huge global scale, right. So where Arland was sort of at the epicenter of that, that’s, to me a success story of what can happen in a network, obviously, I’m also part of the digital media network, and part of an entertainment and media network. And then when I had a great opportunity to go back and work in London a few years ago, I was there for three years with Disney met a whole new group in the media space there in London. And now there’s, I feel that connection, much stronger connection between London and LA. So it’s just amazing. To be able to get the opportunity to continue building those communities, right, throughout your career.

Rob Weber 28:08
Yeah, it kind of I don’t know, it reminds me of this book, I read by Brad Feld over at Foundry Group called startup communities. And he kind of went to talk about the different stakeholders and communities as you know, sometimes universities, service providers, so think college, warriors, whatever. But sort of Brad says very clearly in the book, he thinks that startup communities are best led by entrepreneurs. And I really, I kind of read that I got no, I’ve never heard anyone say that. But I think that’s right on thinking of like, here in Minnesota, a group of friends started a group called mini Starr. And one of the first things they did was launch kind of an unconference called a bar cam called mini bar, mini bars. This bar camp, I think, in the US, as far as we know, you know, eastspring, a few 1000, people will get together. And we’ll have 10 Different people speaking on different technical and entrepreneurial kind of related topics concurrently, everyone can register to speak, you’re awarded the room size based on how many people pre registered to join your talk. But it’s like the most inspiring day I can stay current with from real practitioners on topics related to design, to you know, data science, entrepreneurship, raising money, I mean, almost any topic that was started just grassroots by a couple of entrepreneurs who just said, they also started doing like a demo event where we would just start showing like a demo of what we were working on no PowerPoints is show off your software to start at around like a table. And now the thing is so big this mini star, there’s like 30,000, plus tech enthusiasts, it’s almost like grown to big words. It’s not like intimate like it was.

Una Fox 29:45
I think that’s right. I think once once these things get really big, it is hard to maintain that energy. But I do think when you’re getting people together, it’s great to have a lot of diverse topics that you can focus on. There’s one particular company that I worked at, who also will remain nameless, but they would organize a day, once every year for all of the engineering creative people meet a lot of people in the company. And the range of topics that was covered on this one day was just so fascinating. And there was no PowerPoint used, it was just all panel conversations or talking presentations. But it was across culture, from you know, music, to film, to technology to politics, science. I mean, it was just unbelievable. I remember one day going to one of these events, and I just, I just My head was exploding from absorbing all of these different experiences. It was just, it was mind boggling how you could get all that culture in one day. Yeah, it

Rob Weber 30:58
kind of gets you out of your comfort zone, when you you had the chance to kind of dive into all these areas that you weren’t even aware of, or you know that or it’s, it can be really inspiring, I think,

josef siebert 31:07
you know, when it comes to community building, that point about it having to be led by entrepreneurs. That’s really interesting, because there’s a lot of like government a lot of nonprofit involvement, because they want to see that economic value creation. They want to see that money coming in. They want to see that that value creation, the job creation, that comes with startups with new small businesses, especially technology led ones that could be around that could be creating the next big industry for a location.

Una Fox 31:37
I do think that there’s some well intended efforts that start in certain cities, because they’re trying to create business to try to create, you know, new economies for their community, which, which I’m actually in favor of, right. I mean, if there are special tax credits or tax incentives, or what have you that only government officials can create in or, you know, city officials can create in a particular city in order to, you know, create a start of economy. I think that’s always a good thing. You know, particularly when we see what happened in 2021. Obviously, the big cities like in the United States, New York and Silicon Valley, in particular, has always been the startup hub right where the majority of venture backed companies begin. And same in New York. But last year, I think it was one of the first year in several years that out of all of the venture money in the US, there’s been a slight decline in Silicon Valley, and it’s going to other cities. So now you see Miami popping up Los Angeles popping up. And I do think that there are some cities that have had venture money due to mayors or city officials, basically saying we’re going to make this a priority. So once they’re creating the environment for people to get the support that they need to create a startup, but yes, you need the entrepreneurs, you can’t do without them. Right.

josef siebert 33:04
Yeah, absolutely. It’s, there’s, there’s a balance, and I don’t know if anybody’s perfectly figured it out. And of course, the gold’s changing every time right, as technology develops, just like QR codes came around, you know? And who would have thought 10 years ago, we’d be doing this right now via zoom.

Rob Weber 33:23
Yeah, it’s funny. You mentioned that una cuz I remember exactly feeling the way you did about QR codes 10 years ago, and now it’s so ubiquitous, it’s like, oh, QR code. This is gonna save me a lot of time. Like I don’t used to be like a complete negative. And now it’s actually like I just a part of life.

josef siebert 33:39
So I’d like to ask every single guest that we have on the podcast, Oona, what’s a company or a person? You know, maybe it’s someone who’s been operating under the radar? Or maybe it’s somebody that everybody knows, like, in your case, Disney? What is somebody or a company that you really see executing right now?

Una Fox 33:55
Oh, yes. Actually, I mentioned her earlier. person who’s in my network, the founder and CEO. Her name is Mina Reeves. And she started a startup, which is essentially it’s a it’s a wellness platform. And it’s, it’s all about delivering wellness solutions into either companies, hospitals, clinics, and you know, the individual consumer. And what you’re doing is you’re using an interactive VR headset, with experiences developed specifically for wellness and mental health. And then he comes from the gaming she worked at EA, she was at EA for several years, she was a she sold a successfully sold a startup to Sony. She’s had a lot of different leadership experiences, either in corporate or in the startup world. She’s been very successful in the startup world, I known and a really well, because female technology leaders, we all try to support each other and prop each other up. And actually, when I was when I was running, the coding startup, was also really a great mentor during that time and helped us providing space for us to educate kids and her workspace and so on. So she’s always been super supportive. As we were talking about earlier, this could be used as a wellness, you know, device and solution. And they’ve been really successful. They’re getting a lot attraction. They have you know, partnerships, I think with all the VR companies and she’s someone to look out for and so, check it out. It’s called trip T AR IPP.

josef siebert 35:37
That sounds great. I’ll be sure to link trip in the article about this podcast episode so people can follow through and check it out. Thank you so much for coming on the podcast, Una

Una Fox 35:48
Oh, it was a pleasure. I really enjoyed coming thanks for inviting me and can’t wait to hear with it said.

Rob Weber 35:57
Thanks a lot, Una, appreciate it.

Welcome back to the Great North Labs newsletter!

With so many great startups getting acquired or going IPO lately, one wonders: What do founders do when they score these big windfalls?
 

How Do Founders Spend Their Cash?

Rob Weber was curious, so he asked other successful founders from the region about their post-exit strategies. Do they do the kind of flashy things coastal entrepreneurs do? You know, like buy an island or a 100-foot yacht or something?

From Lamborghinis to Hamm’s beer signs, traveling the world to giving back to their local entrepreneurial communities, these founders have quite the stories. 

Read the full article in BuiltIn Chicago,

The Weird and Wonderful Things Midwest Founders do After They’ve Had a Big Exit“. 
 

How University of St. Thomas Raises Up Startup Entrepreneurship


The University of St. Thomas (UST) has ~10,000 students, with over 34,000 business school alumni around the world. Recently, UST announced the end of their full-time MBA offering. At first glance, that may seem like a blow to the future of entrepreneurial development at the university. We dug into the details to get a better of picture of what’s going on at the university to support innovation, startups, and entrepreneurs. 

“We Don’t Need No [full-time MBA] Education” highlights the meaningful startup and entrepreneurship efforts at UST, as the university innovates its own educational offerings. 

Our Senior Analyst, Mike Schulte (JD/MBA ’17), shared his experience and insights into the university including these highlights: 

Events

Here is a mix of upcoming events for investors, founders, and/or ecosystem supporters. All events listed are virtual unless otherwise noted.

Portfolio News

Flywheel is new to the Great North Labs portfolio! Flywheel is the leading research data platform that provides the tools needed for data import, automated curation, image processing, machine learning workflows, and secure collaboration. By leveraging cloud scalability and automating research workflows, Flywheel helps organizations scale research data and analysis, improve scientific collaboration and accelerate discoveries.

Allergy Amulet launched their product! “The world’s smallest & fastest consumer food allergen sensor” quickly sold out. Sign up on the Allergy Amulet website to receive info on future release dates. 

“Flywheel raises $15 mn co-led by Beringea and 8VC”. Flywheel’s series-B round included Great North Labs as well as well-known global VCs.

“Venture capitalists invested a record $1.9B in Minnesota in 2020”. The $1.9B in VC included EmpowerU’s recent raise, along with Bright Health, Arctic Wolf, and Revol Greens. 

See our Job Board

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.

2ndKitchen's 2Go

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.

Lean Startup School

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!


[Due to health and safety considerations during the COVID-19 pandemic, we are canceling this year’s in-person conference. We will keep our community updated via our newsletter on any changes, as we explore virtual event options.]

Great North Labs’s Startup Summit 2020 will be on August 27th at St. Cloud State University. Every year, Great North Labs gathers stakeholders together in late summer for an annual event aimed at supporting startups in our portfolio and the startup ecosystem in general.

Sometimes there are boat rides, other times there are distinguished speakers and panels. There is always networking. And food, and fun, and new connections. Every year, without fail, people ask, “What are we doing next year?”.

And every year, I say to at least one of them, “demolition derby at the Brainerd Speedway”. It is never true, but it keeps them guessing and excited, and that is just good marketing.

Well, the cat is out of the bag early this year.

Mark your calendars for August 27th. Great North Labs’s Startup Summit 2020 will be at St. Cloud State University in the Atwood Ballroom from 1-5pm. (Investors- save the date starting at 10:30am. Details will follow.)

There will be industry-specific breakout sessions and startup ecosystem speakers, plus plenty of networking. No helmets required.

Further details and an event sign-up link will follow. Keep an eye on our newsletter to stay up-to-date!

[Due to health and safety considerations during the COVID-19 pandemic, we are canceling this year’s in-person conference. We will keep our community updated via our newsletter on any changes, as we explore virtual event options.]

Great North Labs’s Startup Summit 2020 will be on August 27th at St. Cloud State University. Every year, Great North Labs gathers stakeholders together in late summer for an annual event aimed at supporting startups in our portfolio and the startup ecosystem in general.

Sometimes there are boat rides, other times there are distinguished speakers and panels. There is always networking. And food, and fun, and new connections. Every year, without fail, people ask, “What are we doing next year?”.

And every year, I say to at least one of them, “demolition derby at the Brainerd Speedway”. It is never true, but it keeps them guessing and excited, and that is just good marketing.

Well, the cat is out of the bag early this year.

Mark your calendars for August 27th. Great North Labs’s Startup Summit 2020 will be at St. Cloud State University in the Atwood Ballroom from 1-5pm. (Investors- save the date starting at 10:30am. Details will follow.)

There will be industry-specific breakout sessions and startup ecosystem speakers, plus plenty of networking. No helmets required.

Further details and an event sign-up link will follow. Keep an eye on our newsletter to stay up-to-date!

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.

Great North Labs Startup School

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.

Read more about our startup education and sign up for courses

Who: Great North Labs, ILT Studios, Redwing Ignite and Partners.

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.


Great North Labs will be participating in a couple of events at the World Economic Forum this year, where we have been invited to talk about our work investing in early-stage companies in the Upper Midwest. The Forum (WEF) is an annual gathering in Davos, Switzerland, of business, political, academic, and other leaders.

The purpose of the forum is to engage with leaders, and to help inform and shape global, regional, and industry agendas. According to WEF:

“The Forum strives in all its efforts to demonstrate entrepreneurship in the global public interest while upholding the highest standards of governance. Moral and intellectual integrity is at the heart of everything it does.” 

Great North Labs Partner Pradip Madan will be speaking about investing in the Upper Midwest, supporting and growing the ecosystem with initiatives like the Startup School, and of course, the promise of the Upper Midwest region.

Like Steve Case said at the Greenwich Economic Forum in November, there is a tremendous opportunity for venture capital within the coasts. 

“To me, it feels a little like the Internet 35 years ago when nobody, other than a few…believed in the idea of the internet. And people, when I was talking about it, were skeptical.”

“Over time, I think you’ll see venture capital shift. The coastal investors will need to have regional investment strategies.”

-Steve Case, Chairman and CEO of Revolution, and founder of Revolution’s Rise of the Rest Seed Fund

Here are the events where Great North Labs will be speaking.

1. Global Citizen Panel sponsored by Pink Lion

PinkLionAI Panel WEF

TIME: Wednesday, Jan. 22, 5-7pm.

LOCATION: Promenade 52, 7270 Davos Platz, Switzerland.

TOPIC: “Going Off Road Innovation in Tech: Leveraging unexplored areas and geographies to increase scale and innovation in the public and private sector.”

Attend this panel to understand methods and ways you can leverage untapped resources that are sitting available to you all around the globe.  We will look at how this works from the startup innovation perspective, through funding and the venture firm perspective, and out to the large corporate entity with innovation and human capital that is an underutilized resource in many geographies.  We will highlight this example specifically in how it is successful in the US and Minnesota and demonstrate and answer questions on how it applies to your specific use case. 

This panel has plenty of Minnesota representation with Pradip Madan of Great North Labs, Jennifer Bonine and Dean Costakis of Minneapolis’s PinkLion.AI, Patricia Simmons who is on the Mayo Clinic Board of Trustees, and Maria Dayton who is the Ambassador of SingularityU Minneapolis-St. Paul.

2. The Digital Economist Night in partnership with The Caspian Week

TIME: Thursday, Jan. 23, 7:30p-midnight.

LOCATION: Promenade 61, 7270 Davos Platz, Switzerland.

TOPIC: Business models and strategies that will hallmark the next phase of global economic transformation.

Distilling the cutting edge tools from economic science, with hands-on industry experience, The Digital Economist roundtable series convenes enterprises, startups and innovators to explore, discuss and steward the business models and strategies that will hallmark the next phase of global economic transformation.

Pradip Madan will be hosting a roundtable for this, the inaugural summit for The Digital Economist, in conjunction with the 50th anniversary of the World Economic Forum in Davos.

Happy Thanksgiving, and welcome back to the Great North Labs newsletter!

This is the perfect time of year to reflect on what we are thankful for, and for giving back. We are most thankful for our investors, our advisors, and our portfolio companies, of course! They are the reasons we exist, work, and succeed.

We are also thankful for the developing startup ecosystem in Minnesota and the Upper Midwest. There have been great developments recently like the Launch MN Initiative, the first Greater MN accelerator, and one of the largest seed funds ever raised in the Midwest

There is still a need to improve. There are valid and pressing worries about the creation, automation, and distribution of jobs. Innovation and startups are increasingly important to our future. Did you know that from 1980-2010 about half of all jobs created in the US were from high-growth startups? 
 

Founders Pledge


That is why we are challenging founders in Minnesota to make a Founders Pledge! The Founders Pledge is an international movement of founders dedicating equity to support nonprofits. This is a way for cash-strapped founders to provide impactful contributions to organizations they find important.

Local nonprofits stand to benefit greatly when pledging founders have big exits.

There are several existing structures and organizations, but basically, to make a Founders Pledge startup founders donate a portion of their future proceeds to local nonprofits. They give support to the organizations that support them. If the Founders Pledge becomes ingrained in the culture of our startups, it will create a virtuous cycle between successful startups and the people and organizations that help them succeed

Supporting the Startup Ecosystem


According to research on early-stage entrepreneurship from the Kauffman Foundation, Minnesota is lagging behind on 4 key indicators of success. Our rate of new entrepreneurs, opportunity share of new entrepreneurs, startup early job creation, and startup early survival rate are all below average, with our composite score putting us at 46th compared to the rest of the US.

Nonprofits are a vital part of supporting early-stage entrepreneurship, and creating favorable outcomes for founders. By contributing to their success, founders can increase the chances of their own and future startups’ success. Join the movement and Great North Labs in making a Founders Pledge!

Events

The holidays are a busy time for everyone! If you find some time between family and friends, here are some events worth attending: 

Portfolio News

Inhabitr closed a $4M dollar series A round, led by Great North Labs. The news of the Chicago-based furniture rental platform was covered in TechCrunch, and in this piece by ChicagoInno.

2ndKitchen closed a $4.35M round. This startup connects restaurant kitchens with kitchen-less venues, such as bars and breweries. Investors included Hyde Park Venture Partners, Math Ventures, and M25. 

Dispatch was named to CNBC’s Upstart 100, which includes “100 of the world’s most promising start-ups to watch in 2019”. Congratulations to the Dispatch team!

Job Board

Dispatch is hiring all over the country for Part Time Drivers and in Bloomington, MN for a Biz Dev Representative, HR Manager (Remote OK), Data Scientist, and CFO. 
Structural is hiring an Associate Software Engineer in Indianapolis or St. Paul, MN. 
TeamGenius is hiring a Sales Associate in Minneapolis. 
FactoryFix is hiring a Software Engineer, Product Designer, and UX Designer in Madison, and a Biz Dev Specialist and Account Manager in Chicago.
2ndKitchen is hiring a Customer Success Manager, Account Executive, and Director of Sales in Chicago. 
PrintWithMe is hiring a Customer Success Associate, Network Operations Specialist, and an Operations Lead in Chicago; Super User Technicians in Portland and Houston; and a Regional Sales Director for the West Coast.
Parallax is hiring a Customer Success Specialist, Quality Assurance Engineer, Senior Software Engineer, and for a Growth/Customer Acquisition role in Minneapolis. 
Branch is hiring a Content Marketing Manager, Settlement Analyst, Customer Support Agent, Customer Success Manager, and Senior Backend Engineer in Minneapolis. 

By Rob and Ryan Weber

Where do startups come from, and how can we encourage more of them? Whether you believe in clustering or building a rainforest, one thing is for sure: startups don’t materialize out of nowhere, nor do they always succeed on their own.

Importance of Startups

A healthy local startup ecosystem drives both new startup formation and their chances of success. Unfortunately, according to research available from the Kauffman Foundation on early-stage entrepreneurship, Minnesota is below average on every state-wide indicator. 

This is incredibly important because between 1980 and 2010, about half of all jobs created in the US were from high-growth startups. 2.9 million were created per year on average, according to the National Venture Capital Association. In the Upper Midwest, each startup produces approximately 4 jobs in their first year of business. 



The Kauffman Early-Stage Entrepreneurship Index is an equally weighted index of four indicators of entrepreneurship activity: rate of new entrepreneurs, opportunity share of new entrepreneurs, startup early job creation, and startup early survival rate. Minnesota ranks 46th. Source: 2018 State Report on Early-Stage Entrepreneurship

Founders Pledge

So how can a cash-strapped startup founder help? Take a Founders Pledge! The Founders Pledge is a popular movement driven by founders around the world. It came about because startups don’t have cash, but have enormous potential for value creation in their equity. Popular options include the Founders Pledge organization, where founders make a pledge of at least 2 percent of their personal proceeds to nonprofits, or Marc Benioff’s Pledge 1% which encourages founders to pledge 1% each of equity, time, product, and profit.

By taking the Founders Pledge, founders align a long-term commitment to do good with the success of their tech startup, and to the success of the entire ecosystem. Imagine if every time a local tech startup exited, that meant money went into local nonprofits? 

MN Founders Pledge Challenge

While many startup founders support, actively engage with, and lead local nonprofits, we think it’s also important to support these organizations in a meaningful financial way. Time is an excellent donation, but an equity pledge is meaningful support that creates a shared interest in mutual success. 

We believe this is so important that we are challenging other Minnesota startup founders to make a Founders Pledge! All it takes is pledging a percentage of your proceeds to nonprofits. It’s that simple.

Within your first 12-24 months of operation either go through the Founders Pledge, Pledge 1%, or structure your own pledge.  We have chosen to structure our own pledge, and are willing to provide advice and referrals to the local legal and accounting professionals who helped us structure our giving.

The Value to Nonprofits

Our own pledge is to give at least 2 percent of our own personal interests from our $23.7M debut venture fund to Minnesota nonprofits. As Great North Labs’s portfolio grows and has exits, our nonprofit partners will benefit alongside our fund’s investors. For example, if a $10,000 equity pledge is made to a nonprofit today, and the fund returns a 5X multiple over its life, the $10,000 pledge will return $50,000 to the nonprofit over the fund’s life. This allows us to support local organizations in a meaningful way without sacrificing liquidity. 

The same type of equity multiplier can apply when a founder pledges some of their equity, and it creates the possibility of creating sustaining legacy gifts in the event of large exits. For example, if a company has a $2B exit (like Michigan’s Duo Security in 2018), and a founder with 20% equity has made the Founders Pledge, that is an $8M dollar influx for local nonprofits. While big exits like this are rare, if the Founders Pledge becomes part of our culture in Minnesota and across the Upper Midwest, then large gifts like this become inevitable.

Local nonprofits can reap huge benefits from a cash-equivalent equity donation.

Supporting the Ecosystem

There are many aspects to a productive startup ecosystem, such as access to capital (part of why we founded Great North Labs), that are important. But it’s important to remember that these “aspects” aren’t just monolithic categories to fill in and check off of a list- they are individuals and organizations pursuing their own missions, with their own motivations.

These individuals and organizations are vital parts of the startup ecosystem, and include a variety of people, structures, and missions. While for-profit entities can self-support, nonprofits are dependent on donations.

Nonprofits we Support

As Managing Partners of Great North Labs, we’ve identified several nonprofits that we believe are making an impact not only in the Twin Cities, but in St. Cloud and throughout the entire state. We support them variously with time, cash, and equity pledges. While other founders undoubtedly have different lists of who they find personally impactful, this is ours:

A Virtuous Cycle

Together, our equity donations will provide considerable upside to the nonprofits over the long run as our startups go on to create immense value, growing the startup ecosystem and not only benefitting local job growth and creation, but also making the next generation of startups more likely to succeed.

Once the Founders Pledge becomes part of the culture of the startup community, it will create a virtuous cycle of success.

If you are a founder who would like to make a similar commitment, feel free to contact us, or tweet @greatnorthlabs with #MNFoundersPledge. We can offer advice on making the commitment and professional referrals for legal and accounting.

The environment is ripe and the ecosystem is ready, and it’s time that this popular movement started spreading through Minnesota and the Upper Midwest!

Twin Cities Startup Week kicks off tonight, and goes until October 16th! This is the biggest startup (event? happening?) anything in Minnesota every year, and TCSW 2019 is bigger than ever, with over 300 events. So what does a venture fund like Great North Labs have to do with it? Are we just wandering around writing checks? 

Oh, no. Oh ho ho ho ho NO.

1. BETA Showcase

Oct. 14th, from 7-9 pm at the DQ Club Room at TCF Bank Stadium

When Reed Robinson at BETA approached us about including Greater MN in Twin Cities Startup Week (TCSW), we had some ideas.

This year, we helped BETA source and vet startups from around the state for the BETA Showcase, which regularly sells out (and which attracted 800 attendees last year!). For the first time ever, this premier event of TCSW will include 10 startups from Greater MN, in addition to the 14 from the BETA cohort. Who will take home the Golden iPod this year?!

While many demo events are industry or metro-specific, this will truly be a celebration of the state’s entire ecosystem. Come to eat, drink, and talk one-on-one with some of the hottest new founders in the state!

2. Greater MN Meetup

Oct. 14, from 5-6 pm at the “M” Club Room at TCF Bank Stadium

2019 is the first year focused on including Greater MN, so Great North Labs decided to help organize the Greater MN Meetup, with sponsors EPIQ Partners and Moss & Barnett.

This invite-only (request and invite at the link if you haven’t received one) pre-event gathering before the BETA Showcase will be a place for policy folks, business leaders, economic development pros, entrepreneurs, and investors interested in supporting the innovation and startup ecosystem statewide. It will also give all of the Showcase newcomers a place to gather with likeminded people before the craziness of the BETA Showcase.

Join us to connect with Greater MN stakeholders, and have a drink and snacks before the BETA Showcase!

3. Exponential Medicine

Oct. 14, from 1:30-2:30 pm at Junior Achievement of the Upper Midwest

Ryan Weber is not only a Managing Partner at Great North Labs, but he is also the Co-Ambassador at SingularityU Minneapolis-St. Paul (SU-MSP), where he keeps up on digital transformation and exponential technologies.

The mission of SU-MSP includes educating people in the community around these topics. Exponential Medicine is part of the featured Health track, and we have gathered 3 cutting-edge local companies to speak about what they do, where they see the tech going, and the impact that will have in the future.

Come to learn about advanced tech in local medical companies StemoniX, Recombinetics, and Miromatrix Medical.

4. Exponential Medicine Moonshot Workshop

Oct. 14, from 3:00-4:00 pm at Junior Achievement of the Upper Midwest

Another part of the mission of SU-MSP is to promote local moonshots using exponential tech to take on the world’s most pressing problems! This Moonshot Workshop will work on generating some of these big, transformative ideas with a health focus.

Ryan Weber will co-facilitate this workshop with fellow SU-MSP leadership team member Nick Tietz, Founder and CEO of ILT Studios.

Want to think outside of the box while brainstorming BIG ideas to make the world a better place? Join us for this session to not only learn how to generate these ideas, but to generate some yourself!

5. TCSW Awards Ceremony

Oct. 16, from 6-9 pm at the Science Museum of Minnesota

The Closing Party of Twin Cities Startup Week is going to be a blowout at the Science Museum. This will be the last hurrah of TCSW 2019!

Sign up separately to attend the TCSW Awards Ceremony from 6-7 pm. There are a variety of awards given out, and this year we are proud to be sponsoring the 10K Award. The award is for recognizing an organization, team, or individual fueling Minnesota’s startup ecosystem outside the greater MSP Area.

Vote for the 10K Award recipient here, and attend the event for the last goodbye to TCSW until 2020!

6. Partnerships Matter: Why Go it Alone if you Don’t Have to?

Oct. 11, from 10 am-12 pm at EPIQ Partners

Managing Partner Rob Weber will be speaking at EPIQ Partners alongside Neela Mollgaard, Director of Launch MN, and Matt Meents, former CEO of Magnet 360.

“Success rarely happens as a solo effort. Every entrepreneur must find and nurture partnerships along the way. From co-founders developing trust in early stages to finding the right advisors to track towards an exit, partnerships matter. Come and absorb from an informed group of experienced partners.” – from the event description that was so right-on it had to be directly quoted

Come to hear about the value of partnerships, and valuable partnerships.

7. Kind of all over the place

Great North Labs contributes to many organizations that are important to the local startup ecosystem including MN Cup (Final Awards ceremony on Oct. 14th!), Minnestar (Minnedemo 33 is Oct. 10th!), BETA (operational support for all of TCSW), and SingularityU Minneapolis-St. Paul.

A healthy ecosystem produces more startups, and we hope to grow it locally, while continuing to invest in early-stage startups throughout all of Minnesota and the Upper Midwest. We are glad to see Twin Cities Startup Week growing in attendees, events, and sponsors, and by including startups from Greater MN!

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iraLogix closes $22M Series C

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