Entrepreneurship – Dallas, TX Edition

If you Google "entrepreneurship", you get back this definition:

Entrepreneurship is the willingness to take risks and develop, organize and manage a business venture in a competitive global marketplace that is constantly evolving. Entrepreneurs are pioneers, innovators, leaders and inventors.

While there is a long history of entrepreneurship in certain parts of the world, the trend is picking up worldwide:

We are part of the global entrepreneurial class, an identity that transgresses borders, nationalities, and religion.  Entrepreneurs are a demographic, not a geographic, and their conspicuous creation is driving positive change in our world. Silicon Valley remains a bastion, and a gravitational force.  But the walled gardens are withering, and the access class is becoming an asset class.  Investors and entrepreneurs need a passport to the present.

The Dallas, TX area is no stranger to this phenomenon with organizations and activities like The DEC, Tech Wildcatters, The Garage, VentureSpur Texas, Common Desk, The Grove, BigDOCC, LaunchDFW, Dallas New Tech, DFW Startup Happy Hour, and plenty more. DFW has been no stranger to startup companies in the last 20 years either.

And of course there are local personalities helping driving this trend such as: Bradley Joyce, Mike Sitarzewski, Jennifer Conley, Michael GilbertTrey Bowles, and Gabriella Draney, to name but a few. And my small contribution is mentoring with a couple of the accelerator/incubator programs.

So far, it's a pretty straightforward set of facts repeated in various cities around the world, right? Not so fast, pardner – here in Texas we do everything bigger and better – and entrepreneurship is no different.

Meet Bill McNeely

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Bill lives in Dallas and is a veteran of the Afghanistan conflict who, like many other veterans, has struggled since returning to civilian life. Between a moribund economy and the lingering effects of combat, Bill has struggled to support himself and his family. However, he's not just a veteran – he is also an entrepreneur and an active participant in the Dallas entrepreneurial community. This t-shirt he designed sums up his unique perspective:

Bill has been working on startup ideas surrounding the skills he excelled in with the military: logistics. The result is DeliverToMe, a B2B local delivery service. However, how he got to that point is just as important a story about Bill as it is about the Dallas entrepreneurial community.

Bill has received support from The Garage in acquiring a vehicle for his service and building his business model, acquired his first client Brevida, also a startup, through The DEC and received training and mentoring through the Google-sponsored Startup Weekend NEXT program led by Kevin Strawbridge where I helped Bill with his pitch and refined his business model. He also received in-kind support from FISH Technologies, a local award-winning experiential marketing technology company.

The details of how DeliverToMe has developed are much less important than how so many different elements of the Dallas entrepreneurial community spontaneously came together to help Bill. There was no central planning; there were no turf battles. The consistent ingredient was entrepreneurs with a passionate desire to help other entrepreneurs succeed. The difference here is that in Texas, we don't just want each of our own efforts to succeed – we want everybody's entrepreneurial efforts to succeed. That's how entrepreneurship benefits society as a whole and makes it all worthwhile.

What can I say? It's Dallas. That's how we roll.

Get Rid of Your Safety Net

I just read a remarkable article about the rise and fall of a startup in San Francisco called Everpix. They developed a web-based photo organizing and archiving application. As is the trend, they used a freemium model for the service they offered:

The service seamlessly found and uploaded photos from your desktop and from online services, then organized them using algorithms to highlight the best ones.

As is also the trend, the company was filled with young and talented entrepreneurs. The more complicated explanation about why Everpix failed is understandable:

The founders acknowledge they made mistakes along the way. They spent too much time on the product and not enough time on growth and distribution. The first pitch deck they put together for investors was mediocre. They began marketing too late. They failed to effectively position themselves against giants like Apple and Google, who offer fairly robust — and mostly free — Everpix alternatives. And while the product wasn't particularly difficult to use, it did have a learning curve and required a commitment to entrust an unknown startup with your life's memories — a hard sell that Everpix never got around to making much easier.

At the micro level, that makes a lot of sense. But there is a larger macro effect going on here that they (and the author of the article) touch on without even realizing it:

“You look at all the problems that we’ve had, and it’s still nothing,” he said. “I have more respect for someone who starts a restaurant and puts their life savings into it than what I’ve done. We’re still lucky. We’re in an environment that has a pretty good safety net, in Silicon Valley.”

The main problem in my opinion was not that they didn't execute business strategy correctly – at most that is just a symptom. The real problem is that they operated with a "pretty good safety net".

Working Without a Net

The major problem that many companies fall into when receiving angel or venture funding is that they aren't challenged every moment of every day to do what it takes to survive. If you look at it from a Maslow's hierarchy of needs perspective, the moment the pressure of survival is removed from a fledgling entrepreneurial effort the focus will tend to drift towards longer-term and less relevant aspects of starting a business.

This shift of focus is a death sentence for many companies because at this early stage they still have no inherent ability to survive without the funding – just like a new born infant. If critical care is not taken to make the company self-sustaining at an early stage it will likely not be when the money runs out.

I'm not saying that everybody should be bootstrapping every entrepreneurial effort. Many times, funding enables strategic maneuvers and is the fuel that feeds a "fire" with growth – and with good maneuvering and good growth often comes more stability and longevity.

But if bootstrapping is a viable option, my belief is that the majority of the time, the company that emerges will be a lot stronger and healthier.

So, get rid of unnecessary safety nets around your entrepreneurial efforts and focus on the details of basic survival. Pay close attention to the life blood of your company – its profitabilty – early and often and make sure it is on a trajectory that will make your company self-sustaining as quickly as possible.

As the saying goes "live each day as if it were your last".