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Dhawan: As the community evolves, challenges persist

Monetery
April 2, 2018

Thank you Ben Milne for rebooting the conversation about our startup community during Monetery on March 20, your Dwolla team shined as a cohesive cohort of individuals.

I fondly remember from your launch events during the nascent days of Iowa’s startup community.

These are my reflections as an ‘aging’ member of Iowa’s startup community: 

Brad Feld spoke for the first time in Iowa as a guest of Thinc Iowa conference in 2012. On the heels of Big Omaha and produced by its parent company—Silicon Prairie News—Thinc brought speakers from near and far. The event engaged about 400 people as attendees and sponsors observed one of the first startup conferences in Des Moines.

As a partner in now-defunct Startup City Des Moines, I sat and listened intently to messages from startup founders and advocates. Brad spoke from the heart about the newly introduced topic of Startup Communities, his eponymous book, and a nifty video produced by Kauffman Foundation. He followed up the conference talk with a fireside chat at Startup City with a couple dozen individuals from the community.

Fast forward to Monetery when Brad returned as one of the panelists to a Des Moines stage. As I sat in the back of the room once again listening to the same engaging Brad—whose blog I follow regularly—I couldn’t help but say to myself:

Things change yet they remain the same.

Des Moines’ startup community has grown significantly over the past six years. We have received an undeserved (in my opinion) amount of accolades and recognition, attention reminiscent of a future we want rather than a future we’ve developed.

Yet have risen, from the rubble of defunct incubators (StartupCity) or startups of 2012 (Pikuzone, Sharewhere, Real Estate Fan Pages, Mens Style Lab) such amazing entities as Global Insurance Accelerator, Funnelwise, Gravitate, Gain Compliance, Clinicnote and more. Geoff Wood remains the tireless advocate for the city’s startups and lone rangers; Mike Colwell has even more startups seeking his sage advice.

We have made amazing strides in connecting members of our corporate communities through these accelerators and brought several hundred (yes, several hundred) mentors who regularly volunteer their time and talent to grow startups. These have funded, bought the startups’ products and adopted the agile and nimble mindsets that are consistent with the startup lifestyle. Our chambers of commerce are no stranger to startup conversations and its leadership remains present, engaged and connected to new and established companies.

Des Moines may be a rare community whose chamber’s CEO is also an advocate for startups, invested in his own family’s startup (Homeditty) and knows the difference between startup (correct) and start-up (incorrect).

What hasn’t changed is the newcomer’s hunger for information. No matter the number of books, blogs, videos, guides and tweets, the new entrants to the startup community are seeking that early meetup, the startup weekend and the reassurance that there is funding for those who are sweating and bleeding on their way to success. There remains the same ‘failure rate’ from which new startups MUST be born.

The government is neither an ally nor an enemy – simply a feeder and supporter amongst many.

What we need is a continued conversation about these topics. Topics that will return to the Des Moines stage on April 5 with AccelerateDSM and then again in September with the Midwest Angel Syndicate’s meeting of angel and early-stage investors. Conversations that happen at Gravitate’s Full-Time Founders meetup. Conversations that need to happen at more venues, without relying upon Ben’s generosity (despite knowing that if he’s in town, he’ll likely show up and contribute!)

I’ve taken away the following from this recent conversation:

  1. When Drive Capital talks about funding 10 companies out of 3,500 applicants – they are exposing a very meaningful statistic – they funded 0.29 percent of the applicants. Startups need to do a LOT more to make their case for someone’s investment.
  2. Diversity remains a catalyst toward success. We, like a majority of the country, have a long ways to go to add this catalyst in startups, venture firms, cities, communities and teams.
  3. Awesome ideas, like Pi515, can starve to a quiet death without friends and allies. Kudos to Ben Milne and Brad Dwyer—who created a fundraiser last year for Pi515—for stepping up to the plate and writing a check that injected life into Nancy’s dream.
  4. We clamored for and got corporate partnerships. Now, the startups must step up, identify, and help solve the problems our corporate partners want solved.
  5. Let’s quit asking for reduced government regulation. If California can birth and incubate startups in one of the country’s most regressive entrepreneurial regulatory environments, regulation is a red herring.

Thanks, Ben, and the Dwolla team for the reawakening. 

Tej Dhawan is the Chief Data Officer at Principal, a co-founder of Plains Angels and a Partner in Mango Seed Investments. 

Previous commentary…

Dhawan: Segregation isn’t the solution to lack of diversity – May 31, 2017

Dhawan: As the community evolves, challenges persist | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.
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