Startup Spokane Blog
News and Happenings From Spokane’s Startup Scene
How Angel Investors Earn their Wings – More than 100 individuals involved in Spokane group, but more are sought
Reprinted from Spokane Journal of Business, LeAnn Bjerken, February 15th, 2018
In recent years, Spokane has seen a handful of local startup companies grow into successful ventures resulting in benefits for both their founding entrepreneurs as well as early investors.
Those who follow news of startup successes may have wondered what it takes to become an investor in a startup company, and how best to ensure their investment yields a return.
“In order to invest in a startup, one must first qualify to be an accredited investor, also known as an angel investor,” says Steve Trabun, regional business manager for Avista Corp. and chairman of the Spokane Angel Alliance.
Trabun says the U.S. Securities and Exchange Commission defines an accredited investor as an individual who has either a net worth of at least $1 million, excluding the value of one’s primary residence, or annual income of at least $200,000—or $300,000 if married—each year for the last two consecutive years.
“There’s no formal process to become accredited, but all investors are asked at some point to sign a document attesting that they meet those qualifying factors,” he says.
Trabun says connecting accredited investors with startup companies is one of the main purposes of the Spokane Angel Alliance.
“The SAA is a network of over 100 accredited investors, who meet regularly to hear about young companies and evaluate investment opportunities,” he says. “We know we have enough individuals here who meet the criteria, so it’s mostly a matter of educating them about the process and attracting them with startups whose product or vision is appealing.”
Trabun says he advises individuals who are interested in startups begin by joining the SAA, and attending one of the organization’s six annual presentation luncheons, at which between 12 and 18 new startups pitch their ideas.
“In presenting, the entrepreneur’s goal is to generate enough interest to persuade investors to write checks,” he says. “When enough investors are interested, the group will typically choose a lead investor to act as a spokesperson in the next step of the process, negotiating terms.”
Trabun says angel investors are typically part of the early investment portion of the five-part funding process through which startup companies grow.
“Most startups begin with just a functional prototype, so some of their initial investment is likely going to go toward further development,” he says. “Angel investors are generally wealthy individuals, who are willing to invest in research and development.”
While there is no set rule on how much money an investor can put into a startup, Trabun says most entrepreneurs begin by asking investors to contribute toward the minimum investment amount their company will need to get started.
“Entrepreneurs usually have a minimum goal amount in mind, but most will be pushing to exceed that,” he says.
While SAA members usually make their own individual investments, Trabun says the SAA also has a dedicated family of funds, called Kick-Start, from which it makes investments.
“Kick-Start sets an initial funding goal that helps young companies get started,” he says. “Generally, they’re led by one established investor who helps to encourage others to invest and help that particular startup to grow.”
Trabun says a big part of the funding process is the negotiation between the entrepreneur and investors on the valuation of the startup company.
“Valuation is determined by either the revenue the startup has already generated or an estimated prediction of what it will be able to make,” he says.
To aid in estimating valuation, Trabun says the entrepreneur is responsible for providing investors with certain information as part of what’s called due diligence; a comprehensive appraisal of a business, to establish its assets and liabilities and evaluate its commercial potential.
“The more due diligence one can establish, the more likely it is you’ll see a reward,” he says. “But it can take time to really dive in to all those figures, so investors have to be willing to ask questions and work to understand the entrepreneur’s goals.”
Ultimately, Trabun says, the agreed-upon terms will depend on how much money the entrepreneur is seeking to raise, the amount of due diligence they’re able to provide, and the level of interest from investors.
Trabun says many angel investors are current or former entrepreneurs who have been through the startup funding process and understand how it works.
“Most are motivated both to help other young companies succeed, as well as by the potential rewards they may gain through investing,” he says. “Some invest in industries they’re familiar with, or companies they have a hunch will do well in the future, while others simply invest in ideas they find interesting.”
According to Trabun, in the past five years the SAA has invested over $26 million into 35 companies, and those companies have gone on to raise a further $155 million and created over 1,000 jobs.
However, he says in most cases, only 20 percent of potential investors who attend SAA presentation luncheons actually commit to investing in new startups.
“There’s definitely a need for more angel investors in Spokane’s startup scene, but it can be tricky to attract individual investors,” he says.
He says part of that difficulty may be due to the fact that, in addition to having sufficient capital to invest, angel investors also need to have a willingness to accept risk.
“Startups are high risk, so you’re going to need a passion or affinity for investing in high-risk business ventures,” he says. “We always try really hard to educate investors that only one in 10 investments will actually pay off.”
Trabun also cautions that it can take years for an investment to begin showing returns.
“Most investors are looking for substantial returns, but it can take a long while for returns to come through on a start-up investment,” he says. “Your investment is there until the startup either goes bankrupt, or is acquired by a larger more established company.”
Trabun says the most successful angel investors are those who also are willing to diversify their portfolio by making investments in multiple startup companies.
“It’s a volume game, meaning the more you diversify, the more likely you are to see returns on your investment,” he says. “In some ways, startup investments are a bit like gambling, only you’re trying to minimize the luck aspect through due diligence and investor influence.”
Local entrepreneur Erik Nelson is the founder of Tidy-Hut Inc., a startup developing a “non-disgusting” portable toilet for festivals and public events.
As part of developing his company, Nelson says he’s known and worked with many angel investors through programs and events at Startup Spokane, Ignite Northwest, and CoMotion Labs.
“I’ve been through StartUp Spokane’s programs and events as well as Ignite Northwest’s innovation accelerator program, and I regularly attend events at CoMotion Labs,” Nelson says.
Startup Spokane is a program of Greater Spokane Incorporated, that’s housed in a location called Share Space, at 610 W. Second, and serves as an entrepreneurial and small business service center.
Ignite Northwest is a nonprofit business accelerator with a mission to help young technology companies overcome early startup challenges.
CoMotion is the University of Washington’s collaborative innovation hub, which expanded last year to include a Spokane-based program called CoMotion Labs at Spokane.
Nelson says he recommends potential angel investors start by listening to podcasts on investing, joining the SAA, and attending events hosted by the three programs listed above.
“I’d say learn as much as you can, and come to local events so you can network with up-and-coming entrepreneurs,” he says. “Ask them about their idea, listen to their pitch, provide feedback, and ask questions.”
Like Trabun, Nelson says that the biggest thing new angel investors should be prepared for is understanding that not all their investments will be home runs.
“One needs to understand that perhaps four of their five investments will either fail or produce marginal results, but that the fifth one will most likely do great and make up for the other four,” he says. “The best angel investors are those who understand a particular market and invest in startups operating in that space.”
Current manager for CoMotion Labs at Spokane, Brady Ryan says he agrees potential investors should begin by attending entrepreneurial events and meeting other investors.
“Investors need to know some of the same concepts entrepreneurs need to understand, so attending entrepreneurial activities can go a long way toward helping starting investors to develop a critical eye,” he says. “Other angel investors also are happy to share their wisdom, and guide newcomers.”
He says angel investors also should be prepared to offer guidance to the startups they’re invested in.
“Many investors want to invest in startups they can contribute and add value to,” Ryan says. “That means not just investing cash, but being able to serve as an advocate and advisor to the entrepreneur, providing them with contacts, and helping their company to succeed.”
Looking ahead, Ryan and Nelson say they’ve been collaborating on ideas for how to increase local awareness about the angel investing process.
“We do see a need for more investment education here in Spokane,” says Ryan. “So we’re working to develop a kind of investor training course that might help encourage some of those high net worth individuals to become active investors.”
Nelson says the two have already seen support from local shareholders as well as the SAA and hope to have a course set up within the next few months.
After more than a year of planning, pivots, and fine tuning, we are excited to unveil the Mind to Market initiative, a focused effort in our region to commercialize viable and scalable ideas. Mind to Market (M2M) is a collaboration between Startup Spokane, Mind to Market, LLC (a pre-seed investment fund), and a myriad of community stakeholders.
M2M has three major components – 1) Rapid Commercialization Program; 2) M2M pre-seed investment fund; and 3) Operations Phase. The graphic (see left) illustrates the framework of the program, so please refer to it as this article guides you through the program.
Ideas or Startup – Ideas come from a multitude of sources, including colleges, universities, business & industry, ideation events such as Startup Weekend Spokane, business plan competitions, and the community at large. Spokane’s vast network of community partners, each of whom serve entrepreneurs, are also feeders for ideas and startups to recommend to the M2M program. Startup Spokane will vet all ideas to ensure the idea has a champion (someone passionate and obsessed) who is coachable, that the idea solves a problem and/or tension, has a potential market, and is scalable.
Rapid Commercialization Program – Unlike other accelerator models, the Rapid Commercialization Program (RCP) is a one-on-one intensive two-week process (on average) where an Entrepreneur in Residence (EIR) works with the entrepreneur to achieve specific outcomes, which include completing the Business Model Canvas, market research and validation, 3-year financial proforma, and a pitch deck for possible pre-seed investment. M2M has a pool of EIR’s to draw from based on the alignment of their expertise and availability. The EIR assigned to each entrepreneur will leverage subject matter experts, and will hold the entrepreneur accountable throughout every stage of the process. Different than a cohort model, entrepreneurs will be invited to participate on a continuous basis. The success, pivot or fail fast approach significantly reduces the amount of time the entrepreneur will spend validating their business model. The RCP was piloted in July 2017 with six companies, all of whom greatly benefited from the program and several of which are ready for pre-seed funding.
M2M Pre-Seed Investment Fund – Entrepreneurs who successfully complete the RCP will have the opportunity to pitch their idea/startup to the M2M, LLC investors. The $825,000 fund is poised to make earliest stage equity investments. This capital fills a gap that exists in our current funding landscape. Many entrepreneurs can use $10,000-$75,000 to create a minimum viable product, which is what most Seed investors will expect before making larger equity investments. And unlike Seattle, Spokane does not have as much “friends and family” capital for entrepreneurs to access. Not all entrepreneurs will need access to the pre-seed investment fund, so it’s possible for an entrepreneur who already has capital to bypass the M2M pre-seed fund.
Operations Phase – Many accelerators struggle with helping entrepreneurs to be successful beyond training and funding. M2M has identified the critical elements necessary for success to include team formation, mentors and advisors, go-to-market planning, developing a prototype and Minimum Viable Product (MVP), customer traction and revenue generation. The length of the operations phase is only limited by the amount of capital, and the startup’s cash runway (burn rate). Many entrepreneurs have expertise with their product and/or service but may not have the knowledge or experience to manage other aspects of the business. To that end, M2M will facilitate introductions to subject matter experts, mentors and advisors. Subject Matter Experts (i.e. attorneys, CPA’s, marketers, etc.) will generally charge for their services. Mentors, who have specific expertise, will be expected to give of their time, to a point, to assist the startup. M2M has partnered with University of Washington CoMotion Labs to leverage their statewide network of 150+ mentors, who will provide in-depth knowledge that will augment what currently exists in our local geography. And advisors, who may be experts or generalists, generally become part of the startup’s advisory board. The specific expectations of the relationships are negotiable between the startup and the SME, mentor, or advisor.
Startups successfully completing the Operations phase will likely be positioned for Seed funding, which may include equity investments or debt financing. These startups may also be candidates for Ignite NW, an accelerator program for established companies in the growth stage. While there is no fee to participate in the M2M program, once a startup enters the Operations phase, they will be required to join Startup Spokane as a member, and subscribe to LivePlan for business planning and reporting. The majority of their capital should be reserved for getting to MVP.
M2M anticipates working, on average, with 3 entrepreneurs per month. Over the next 18 months, the program strives to fund 14 ideas with pre-seed investment capital, and get several startups to the Seed round.
If you or someone you know has a viable and scalable idea, and are interested in participating in the M2M program as an entrepreneur, subject matter expert, mentor or advisor, please contact Megan Hulsey at email@example.com.
Startup Spokane just completed its third year of operations. 2017 was a year full of tremendous accomplishments, some of which need to be acknowledged and celebrated. The entrepreneurial ecosystem continues to evolve, expand, and thrive. Year-over-year accomplishments and outcomes since its inception in 2015 are nothing short of “hockey stick” growth.
Collaboration is strong across the region, and our network of community partners and support resources are working very effectively and efficiently so as to help entrepreneurs be successful, regardless of type of business or industry sector.
Megan Hulsey, Startup Spokane Program Manager, along with April Needham, Avista Community Loaned Executive, have done an exceptional job of convening, connecting and facilitating across the regional ecosystem. This work has really transformed the ecosystem, eliminating uncertainty for entrepreneurs and small businesses as it regards where to go for support.
Some of Startup Spokane’s notable outcomes from 2017 include:
- Entrepreneur Assistance – assisted 268 entrepreneurs, which led to the creation of over 450 jobs in our region.
- Events – 94 entrepreneur-related events were held with over 7,500 attendees
- Triangle Venture Expo – over 200 attendees attended to hear presentations from 7 of our regions up-and-coming startups, including Gestalt Diagnostics, TMS Solutions, MotoTrax, Spiceologist, Sportscope Video, Safeguard, and Phytellingence.
- Office Hours – 17 organizations providing free consultation to entrepreneurs
- Mentors – 26 local mentors plus 150 mentors statewide
- Stakeholder and Partner meetings – 85 stakeholder and partner meetings
- Knowledge Network – 57 ecosystem partners, each of whom serve entrepreneurs. Startup Spokane has created a mesh network, whereby each of the partner organizations refer entrepreneurs to the appropriate support resources in the ecosystem.
- Newsletter – weekly e-newsletter to a distribution of over 5,500 subscribers
- Podcasts – 19 podcasts were recorded and broadcasted, covering a range of entrepreneurship topics
- Blog Posts – 10 blog posts
- Earned Media – 20 stories and articles featuring Startup Spokane
With 2018 fully underway, we continue to identify needs and gaps in the ecosystem, and are focused on engaging resources from our region and beyond. Harnessing the tremendous ideas that are emerging from our colleges, universities, business & industry, and the community at large is our top priority for creating viable and scalable companies.
Our ecosystem is strong, and will continue to support native entrepreneurs as well as those we can recruit to our region. With the cost of startup operations being 35% less than Seattle, along with the incredible attributes of “livability” in our region, we are poised to launch and grow a multitude of startups. As Steve Case, Founder of AOL, and author of The Third Wave, succinctly characterizes communities like Spokane as “The Rise of the Rest”. In his book, he says “over the next two decades we will see cities that were once marginalized become entrepreneurial powerhouses…geographical diversity is vital to our future. Startups are the engine of our economy. The communities they form, the talent they recruit, the products they make, the jobs they create, and the lives they improve can all be leveraged to transform communities”.
Spokane is on the RISE!!!!
Spokane’s 10th Startup Weekend was held at Avista’s headquarters November 10-12 for this 54 hour ideation event. With 80 registered participants, and another 30-40 coaches, judges and organizers, this was by far the best Startup Weekend Spokane yet!
The event started with 33 initial pitches that were narrowed down to the top 9 ideas by vote of the participants. The teams were comprised of a wide variety of participants, including high school students, college students and working professionals. In spite of their differences, they formed highly productive teams and created viable business models, complete with working prototypes and Webpages!
- Lil’ Omelette (first place) – Online courses for children ages 5-12 to learn to cook
- Sound Barcode (second place) – ability to receive product and/or promotional information on your smartphone by scanning barcode
- Work Bid (third place) – Marketplace for connecting homeowners with contractors for home improvement projects
- Bite Box – Deliver readymade meals
- Musinect – Social network for finding other musicians
- Connect Ion – Kits and videos for STEM education
- Brown Book – Changing education through affordable textbooks via an online streaming platform
- Epi-N – Epi-pen user community app that notifies first responders, family and other epi-pen carriers in geographical proximity to assist
- Sparespace – peer-to-peer market for storage, targeting college students
The event concluded on Sunday evening with a keynote address by Mayor David Condon, followed by each team making a five minute pitch before a panel of judges
The top three teams received $3,000 of in-kind legal assistance from Lee & Hayes as well as a complimentary coworking membership to Startup Spokane. Many of the teams are continuing to pursue the launch of their businesses, and Startup Spokane is providing ongoing guidance and direction to each of them.
For a full recap of the weekend, please visit https://www.facebook.com/StartupWeekendSpokane/
Congratulations to all who participated in this very successful event!
PHOTO CREDIT: Atom Images and Inland Northwest Technologists (INT)
Business concept created by high school sophomore
December 7th, 2017, Journal of Business
Startup Spokane, a program of Greater Spokane Incorporated, has named Lil’ Omelette, a web-based cooking class for children, the winner of its 2017 Startup Weekend.
This year’s winning idea was pitched by 16-year-old Bella Memeo, a sophomore at Spokane’s Riverpoint Academy.
“This is my first year, and I didn’t know what to expect,” says Memeo. “It turned out that a team of very talented professionals chose to form around my idea, because they believed in it.”
Memeo says she came to the event with an idea for teaching kids the basics of cooking, that eventually became Lil’ Omelette, a web platform that offers three different levels of cooking classes—beginner, intermediate, and expert—for children ages 5 to 12.
Megan Hulsey, program manager for Startup Spokane, says the site also aspires to include interactive characters to help engage kids, teaching them to navigate the kitchen and build cooking skills alongside their parents.
“It’s a really fun and creative idea for a business,” says Hulsey. “Some of the characters the team came up with over Startup Weekend are pretty cute.”
Hulsey says Lil’ Omelette was chosen by a team of judges at Startup Spokane’s annual entrepreneurship event held Nov. 10-12, at Avista Corp.’s headquarters, at 1411 E. Mission.
She says this year’s event had about 70 entrepreneurs participate, who presented about 19 different start-up ideas, the top 10 of which were selected as finalists. Over the course of the event, finalists and their supporters then worked together to conduct market research on their ideas while consulting with members of the business community on financial and legal matters associated with starting a business.
At the event’s conclusion, the top three business plans were selected, with the winners receiving $3,000 in legal assistance from Spokane-based intellectual property law firm Lee & Hayes PLLC as well as free membership to Startup Spokane.
Hulsey says as the first place winner, the Lil’ Omlette group now will work with Startup Spokane to determine future steps for the business idea, including trademarking characters and developing plans for the content of its online cooking classes.
She says the start-up idea also will be put into consideration as a competitor for Global Startup Battle, an event which pits winning teams from similar events around the world against one another in a global video competition.
Memeo says participating in Startup Weekend helped her to understand the work that goes into creating a business.
“I learned that it’s okay to take risks even if I wasn’t sure of myself or my ideas,” she says. “I went from someone who just wanted to attend and learn, to winning, and it really has boosted my confidence in myself.”
Second place at Startup Weekend was awarded to Sound Barcode, a marketing concept that involves embedding audio files in barcodes. Work Bid, a platform and service for homeowners searching for a contractor, won third place.
Companies created in past Startup Weekends include iCPooch, Beardbrand, and Spiceologist.
Startup Spokane recently hosted the 2nd annual Triangle Venture Expo featuring seven emerging companies from our region. The event was a great success, but some entrepreneurs questioned whether or not it was OK to tell the audience they were raising capital for their company. Startup Spokane generally cautions entrepreneurs not to announce to the audience that they are raising capital or seeking investors unless the entrepreneur has made an intentional decision to comply with the securities laws that permit general solicitation of the public. Here are three things an entrepreneur should be thinking about when preparing a presentation for a pitch clinic or demo day type of event:
- Telling the public you are raising money for your startup is generally prohibited.
Unless you are conducting a registered public offering, complying with crowdfunding rules or taking steps to ensure only accredited investors invest in your company, then you may be violating the “general solicitation” rules if you inform the public you are seeking money for your company. General solicitation occurs when interstate communication tools, including the telephone, email and internet, are used to advertise or communicate with the public about an investment opportunity. It can also occur if an announcement is made at a public event.
- Know your exemption.
Rules permitting general solicitation of the public have been enacted in recent years, including state and federal crowdfunding rules. The rules that permit general solicitation are stricter and more burdensome for a company to comply with. A company may be required to comply with dollar limitations and disclosure requirements, in the case of crowdfunding, or take steps to ensure only accredited investors participate in an offering. The most popular offering exemption for funding startups continues to be one that permits a company to raise an unlimited amount of money from an unlimited number of accredited investors, but does not permit general solicitation of the public.
- Know your audience.
Any seminar or meeting, including a pitch clinic, that has been publicly advertised or to which the public has been invited is generally deemed to be a public event. If you know members of the public will be attending your event, then unless you are willing to comply with the heightened compliance requirements for generally solicited offerings, you should focus your presentation on the company’s business and not its capital needs.
For any questions or more information on these or related matters, please contact Rick Repp at (509) 624-5265; firstname.lastname@example.org
This article is for information purposes only and is not intended to convey or constitute legal advice.
© 2017 Witherspoon Kelley
Global Entrepreneurship Week (GEW) is a weeklong celebration of entrepreneurship which goes into full swing on Monday, November 13, and runs through the following Sunday, November 19. This celebration has been occurring in ecosystems across the world for the past 10 years. Startup Weekend Spokane kicks off GEW on November 10.
According to the Global Entrepreneurship Network website:
GEW serves as a community-building season to reach out to the public at large to inspire more people to engage with their local entrepreneurship ecosystem. During one week each November, thousands of events and competitions around the world (more than 170 countries) inspire millions to engage in entrepreneurial activity while connecting them to potential collaborators, mentors and even investors. Powered by the Kauffman Foundation, the initiative is supported by dozens of world leaders and a network of more than 17,000 partner organizations.
See below for a calendar of events scheduled for GEW in the Spokane area:
|Date||Event Name||Presented by||Location|
|10-12||Startup Weekend||INT & Techstars||Avista|
|13||Business Plan Workshop||SCORE||Pend Oreille Library|
|14||Demo Day||Ignite Northwest||Lincoln Center|
|14||Spokane PHP||PHP Meetup||Startup Spokane|
|14||Quickbooks Desktop||SNAP||The Business Center|
|15||Networking Lunch & Learn||Startup Spokane & Numerica||Startup Spokane|
|15||CDFI or SBA Loan||Startup Spokane, Craft 3, WA Trust||Startup Spokane|
|16||Entrepreneur Connect||Startup Spokane & UW CoMotion||Startup Spokane|
|16||Quickbooks Desktop||SNAP||The Business Center|
|16||Get Money for your Business||SNAP||The Business Center|
|16||Innovation Trade Show||Tri County Economic Development||SCC Colville Campus|
|17||Creating the Team/Hiring/Culture||UW CoMotion Labs||UW Spokane|
|18||Get Started-Business plan||SNAP||The Business Center|
Be sure to check the Startup Spokane events calendar to register for these and other great entrepreneurial focused events!
As is often the case with entrepreneurial ideas, the Game Set Match (GSM) app was born from the irritation of a persistent problem. “My partner, Chief Technologist, and avid tennis player, C.J. Bordeleau, struggled to find similarly skilled playing partners to himself as he traveled the country on business” says Marsh Sutherland, CEO of GSM. Additionally, the US Tennis Association’s (USTA) National Tennis Rating Program (NTRP) for individual players proved inconsistent across geographic regions.
The problem demanded a solution – and that solution became Game Set Match.
Game Set Match is one part community forum for the tennis world and one part player improvement tracker. Currently boasting more than 300 users, most in Spokane but with pockets in Boston and New York City as well, the app allows players to find and communicate with each other to set up matches. A recent adopter and promoter of the app is Jeff Urie, Director of Tennis at the Spokane Club. “This app is a great way for members and other players to play more challenging matches, making them more prepared when USTA leagues and tournaments roll around” says Jeff. Marsh and C.J. are working to increase usage of the app and take advantage of the more than 13,000 private tennis courts in the US, all of which are listed in GSM.
Unique to this app is its utilization of the Elo Rating System which, originally used to rank chess players, is being introduced to the tennis world for the first time through GSM. The basis of this system, which takes into account the skill level of an opponent when ranking a player based on wins and losses, overcomes the geographic inconsistencies plaguing the NTRP system. “Players risk ranking points every time they play a GSM match, which gives them some ‘skin in the game'” Jeff at the Spokane Club says. As players improve their game and win more matches, the app allows them to seek out and schedule matches with higher-skilled opponents.
Click here to sign up and challenge a friend to a match! Marsh and C.J. are also looking for advisors who can offer domain knowledge in either tennis or people matching applications. You can reach them through their Facebook page here.
When asked to share his best piece of advice for startups, Marsh, a self-described serial entrepreneur, emphasizes the importance of traction. “Launched apps are nice, but if they don’t get usage then it’s just a fun hobby. A startup needs traction to know it’s viable and will grow before ever seeking any investment money” Marsh offers. “A good traction benchmark is to show 5% week-over-week growth in the one metric that matters for 10 weeks. Then seek investment if you truly need it to grow.”
After spending the past few years focusing efforts around entrepreneurship as an economic development strategy, the greater Spokane region has successfully established the foundation for supporting startups. We have convened nearly 50 organizations, all of whom are touch points for entrepreneurs, startups and small businesses. We are working collaboratively, and referring entrepreneurs and businesses to the appropriate resources at the appropriate time. The volume of activity has significantly increased over the past twelve months, and it’s now time to focus on the next objective – creating more idea flow in our region.
We have eight colleges and universities in our immediate region. They are educating nearly 70,000 students every year, and most of the recent graduates export out of our region for lack of high paying jobs. We also have many “boomerangers”, young people who initially leave our region, but later return to start families and enjoy a better quality of life. But the challenge still exists – how can we create more high growth businesses in our region so that there are high paying jobs for our graduates and boomerangers?
The answer is simply that we must focus on harnessing more ideas from our students, faculty, researchers, business and industry, and our communities. In a recent meeting with Mark VanDam, WSU’s Entrepreneur Faculty Ambassador, I learned that there are a myriad of researcher led ideas and prototypes that are sitting on the shelf for lack of time, interest, or business experience to take them from idea to product.
Industry also has challenges they need to solve for their respective businesses. For example, at Avista we have an innovation work group that is focusing on exploring new innovations that create more efficient processes internally, or provide value-add products and services for our customers. We recently initiated a web-based challenge on MindSumo that posed the question, “How will you partner with energy utilities of the future?” During the 30-day submission window, Avista received 110 entries, primarily from college students across the country. Out of the 110 submissions, Avista received approximately 20 submissions that were new innovative ideas or validated existing ideas that Avista had been internally contemplating.
The point is that ideas are plentiful, and originate in a myriad of ways. In order to capture and harness these ideas, we will intentionally focus on working with our higher education, business and community partners. It will require a multifaceted and collaborative approach:
- The idea pipeline – Ideas from latent intellectual property, faculty and research ideas and prototypes, student ideas, and solving real business and community problems.
- Convening students across multiple disciplines from our region’s colleges and universities.
- Working with our university and business partners to establish ownership, transfer, and commercialization agreements.
- Collaborating with Startup Spokane for access to mentors, funding and other necessary support resources.
Our region is poised for this next challenge, and by focusing on creating and harnessing idea flow, we have the opportunity to create more high growth startups that will employ many, provide high wage jobs, and will help to retain our skilled and talented workforce.
It may seem like an old-fashioned recipe, but the combination of a high quality product and reliable customer service was the catalyst for culture media manufacturer S2 Media’s launch. Add to the mix the Pacific Northwest’s zeal for buying local and the producers of agar-filled plates for microbiological testing had found their sweet spot.
The S2 Media management team of Stephanie Bernards, Sommer Teague, and Molly Paridon first met as co-workers at Jubilant HollisterStier, local manufacturer of drug products, where they regularly handled culture media for testing purposes. “Sometimes we would find insects in the media” Stephanie says, commenting on the unreliable quality or the sometimes incorrect shipments they’d receive from manufacturers. It was in both this inconsistency of a finely-tuned product, and the lack of a culture media manufacturer in the northwest, that Stephanie and her colleagues saw an opportunity.
The trio went through the business development process – writing a business plan, calculating budgets, forecasting growth – largely on their own, opening S2 Media in November, 2015 after securing a small business loan from Mountain West Bank. “We weren’t aware of the different resources available to people starting businesses” Stephanie remarked about one of the biggest struggles they faced as entrepreneurs. In addition, Stephanie identified an unrealistic expectation of conversion time for clients as another complication the company faced. “A lot of factors play into it, but clients can go six months or longer between asking for a quote and placing an order. That timeframe was longer than we had anticipated.”
No startup is without its struggles, and in spite of those faced by S2 Media, they’ve fared quite well. Citing the adaptability and well-roundedness of the three person management team, Stephanie paints a bright picture for the company’s future. “In the next few years we hope to grow both in the products we offer and the size of our team.” S2 Media is hoping to expand operations by adding high speed filling lines for larger orders. Additionally, the company has been networking with local institutions to ensure they identify and recruit qualified talent as the company continues to grow.
When asked what advice she would offer to entrepreneurs early in their business ventures, Stephanie says “don’t lose the vision and excitement you have. It’s easy to get bogged down in the day to day operations when your business is up and running, but if you can keep the fire burning inside you, you’ll always enjoy what you do.”