Never Stop Fighting ‘Til The Fight Is Done

Hanging on my office wall is one of my favorite prints that I bought a few years ago in Chicago.  It is a quote from the movie The Untouchables that reads:

“Never Stop Fighting ‘Til The Fight Is Done”

That quote has come up in at least three conversations this past week as I talked with people about what makes an entrepreneur succeed.  Through five classes at The Brandery, we have seen nearly 50 startups come through our doors with our fair share of successes and failures.   And while it is tough to point out one thing that separates the companies that make it from the ones that don’t, there is a common thread.  The ones who make it are the ones who “never stop fighting”.

The life of a startup is one hell of a roller coaster.  Even the companies that ultimately succeed go through their fair share of moments where their backs are against the wall and the future looks bleak.  It is in those those moments that it is easy to quit.  To take the fall back option that they all have.  After all, the entrepreneurs that walk through our door at The Brandery come from remarkable backgrounds.  We have folks that were in Med School, were working as a Product Manager at Google, or were running very successful digital agencies.  It would be really easy for any of them to throw in the towel and go back to that world they came from.

But the best entrepreneurs are not wired that way.  Once they have gone down the path of starting a company, they do not want to go back to the world they came from.  For them, failure is not an option.  Or said differently, failure would be going back to what they were doing before.

I was reminded of this when I recently sat down with one of our Brandery alumni.  This was a company that had moved here from the East Coast and stayed in Cincinnati when they raised their seed funding.  Over the last two years, they have been cranking on their MVP but it never really got to product/market fit.  Fast forward to today and some folks would have hung up the towel.  But not these guys.   For them, the fight isn’t done.  Instead, they bootstrapped a little more capital and are using it on a new concept.  And this new concept might actually be bigger than their original idea.  They could have given up many times along the way but quitting just isn’t in their DNA.  Sure they still might fail…but they won’t be a failure.  These folks gave it their all and I know they put everything into it.  They did not just quit because things were tough.

Even after 5 years working with startups at the Accelerator stage, I am still trying to figure out how you determine if someone is wired this way.  It is a trait that is rarely going to show up in the “resume” of a first-time founder.  But it just might be the single most valuable trait an entrepreneur can have in succeeding in their early days.

Don’t Bet Against The Midwest

If I was to share the following facts with you, what part of the US would you think I’m talking about:

  • Represents over 20% of the US GDP
  • Nearly 25% of all research in the US is done here and 25% of all patents in the US are granted here
  • In the last 5 years, 52 companies that are based here have either gone public or been acquired for over $1 Billion.  In total, these 52 companies represent over $140 Billion of aggregate shareholder value
  • 1 day car drive to 60% of the US population

While the headline of this post obviously gives it away, most people would see these figures and think of Silicon Valley or possibly the Northeast.  But instead, these facts are about the Midwest and its why I decided to plant my own entrepreneurial flag here with Rockfish and The Brandery.  And thankfully I’m not alone in that sentiment with stories like:

Since the downturn of 2008 – 2009, a pretty amazing entrepreneurial renaissance has started across the Midwest.  The stats above prove it and it’s something I’ve watched first-hand since leaving P&G in 2010.  When we opened the Rockfish office in Cincinnati, the company had ~70 people total and our office was just three of us.  Fast forward to today and Rockfish is nearly 4x that size and the Cincinnati office is now nearly 80 people.  And at The Brandery, we are graduating our 5th class of companies next year and nearly 60% of those Startups have stayed in Cincinnati after graduation.

Yet the interesting thing is that despite this existing foundation of success, there is untapped potential for the Startup investment community.  Case in point is that only 7% of the venture capital in the US is invested in the Midwest.  And that is despite that 25% of research here.  And despite the $140 billion in aggregate shareholder value created here.  Warren Buffett famously said to “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.”  While I don’t believe it is fear in this case, the essence of Buffett’s wisdom holds true when it comes to the potential in the Midwest.

This same untapped potential exists for Brand Marketers as well.  The reason 25% of patents are issued in the Midwest are because of our concentration of Fortune 500 (P&G, Ford, etc), research universities (University of Michigan, Northwestern, Ohio State University), and startups.  And that means we don’t need to travel across the country to find startups that are driving the next wave of innovation.  We can find it in our own backyards by visiting and partnering with Startup Accelerators like The Brandery in Cincinnati, Tech Incubators like 1871 in Chicago, or Venture Capitalists like Drive Capital in Columbus.  We just have to raise our hands and get involved as marketers.

Finally, part of the inspiration in writing this post was the announcement today that my friend and mentor Wendy Lea is going to be moving to the Midwest (Cincinnati in particular) to take the role of CEO for Cintrifuse.  Wendy is one of the most respected leaders in the Startup community and her belief in the potential of our region is further proof of the Entrepreneurial Renaissance that is underway.

Looking Back: The Birth of The Brandery

This year The Brandery will welcome our 5th class of companies, a milestone that we could only dream of just a few years ago.   We didn’t expect to be looking back on our 5th Anniversary with 36 alumni startups.  And we for sure didn’t imagine that those companies would have raised over $45 million in venture capital.  Or that Over the Rhine would have been reborn on the back of these entrepreneurs.

So as this year’s applications start to roll in on AngelList and F6s, I find myself being a bit nostalgic in wanting to answer the question that I’m often asked:

“How did The Brandery get its start?”

To find the earliest seed of The Brandery, you have to go back to November 2009.  I was working at P&G in Corporate Marketing in a role where I was spending quite a bit of time in the world of digital marketing, venture capital, and startups.  It was in that role where I got to know JB Kropp, who as a serial entrepreneur was one of the Cincinnati-based employees for ShareThis.  JB and I often found ourselves talking about the Cincinnati startup community and what was holding us back.  One frequent topic was JB’s experience of folks wanting to grab coffee/lunch to pick his brain in relation to his SF experience in the dot com world.  It was in that experience that JB really thought we needed something like TechStars to support the ecosystem.  Supporting that point, two themes resonated in the conversation:  mentorship and focus.  We knew that Cincinnati had the people talent, but we lacked a place for entrepreneurs to turn for guidance and coaching.  Additionally, we were a startup community without an identity or really a focus.  With those themes in mind, our conversation eventually landed us on the idea of a startup incubator that would be focused on applying the concepts of brand marketing to startups.   The incubator model would address the mentorship theme, while the focus on brand marketing would leverage the unique talent of our region.

The first person we ever shared this idea with was Pete Blackshaw, a nationally recognized digital expert who had launched a startup called Planet Feedback back in the Dot Com days (Pete is now the Global Head of Digital at Nestle).   Out of that meeting, Pete signed up as our first official mentor, well before we even knew what we were getting ourselves into.  The second person was Bryan Radtke, a close friend and P&G colleague who over a meeting at a high top table at Zip’s came up with the name The Brandery, inspired by Cincinnati’s rich history in beer brewing (ie make beer in a brewery / make brands in the Brandery).

As we rolled into 2010, things were starting to fall into place now that we had positive validation for the idea and a name to actually call the thing.  In January, we met with George Molinsky from Taft Law, who was one of the original co-founders of Main St Ventures.  MSV was in many ways the precursor to The Brandery, just a decade before.  We also locked on our own brand identity during that month thanks to a campaign on CrowdSpring where we eventually selected a logo designed by the Cincinnati-based digital agency, Ample.

In the spring of 2010, we added to our scrappy group as Eric Avner from the Haile Foundation pledged the initial financial operating support to launch the program and LPK signed on as our first agency partner.  A few days into April, George Molinsky introduced us to one of his Associates at Taft, Rob McDonald.  Amongst many things, Rob would be instrumental in finalizing our decision to launch The Brandery as a non-profit,   structuring the warrants / equity with each company, and in general shoring up the foundation of the program for years to come.

As we entered the summer, one pretty major barrier still existed.  We had decided to follow the Startup Accelerator model pioneered by TechStars.  As such, a key component of our business model was a $20K investment into each company, which in turn would give us a 6% equity stake in that startup.  The goal was that those equity stakes would eventually result in liquidity events that would give us a sustainable endowment for the program.  But we needed to have dollars to invest to make that dream a reality.  It was at that time that a VC colleague, Dov Rosenberg, introduced The Brandery team to Mike Venerable of CincyTech.  In late June 2010, we had our first meeting with Mike and he pledged to help us launch The Brandery using the CincyTech Imagining Grants.  So with just over $30K in operating capital and 5 grants worth $100K, we announced The Brandery to the world on July 19, 2010 with a short 4-week application window.

We received just north of 80 applications that first year, ultimately selecting 6 companies.   Three of those companies were from Cincinnati and one each from Dayton OH, Chicago, and Houston.  The number of companies from out of state was surprising, but foreshadowed the years to come.  For instance, the company from Houston was called Giftiki, founded by Justin Stanislaw and Bryan Jowers.  They were recommended to us by Blair Garrou, a VC from the Mercury Fund in Houston who we had met earlier that summer because of his investment in ShareThis.   Giftiki would go on to be one of our success stories that year, raising a $1 million seed round from Draper Associates and other Silicon Valley VC’s.

The inaugural program started on August 31st at Longworth Hall, in a small ~2,000 square foot space that we had leased.  Ironically it was that same week that Bryan and I announced that we’d be leaving P&G to open the Cincinnati office of Rockfish.  The Brandery office would double as the Rockfish office throughout the rest of 2010.

Year 1 of The Brandery concluded on November 19, 2010 as we hosted our first Demo Day at the LPK Innovation Center.  Ben Lerer from Thrillist / Lerer Ventures was our keynote that year, flying in earlier that morning after a late night in NYC celebrating Thrillist’s 5 year anniversary.  The crowd that day only numbered 150 people but at the time was one of the largest gatherings our town had seen of investors from outside the region.  In the months that followed, The Brandery was honored to be named one of the Top 10 Accelerators in the country by Tech Cocktail and was asked to be a Founding Member of the TechStars Network (now called the Global Accelerator Network).

It has been remarkable to watch the evolution of The Brandery from that first bootstrapped year.  Now every year comes with a new nervous tension as we wait for applications, hoping that this year’s class can live up to the previous year.  But time and time again, the companies end up setting the bar higher for us and exceed expectations all over again.  I’m looking forward to seeing what this  fifth class has in store for us.

Marc Andreesen’s 7 Traits To Reinventing Industries

Marc Andreesen recently provided his take on the news industry and the opportunities to reinvent the business. But one of the most interesting parts of the post was the very end when Marc outlined the 7 traits that any successful business needs to reinvent industries. The following is an exert that deserved to be shared word for word:

The good news is those that would survive and thrive are in control of their own destiny. The challenges and opportunities…can be rethought, addressed, and fixed. It’s similar to what any successful business goes through. The guidelines and the characteristics for winning are the same. It requires the following:

Vision: The difference between vision and hallucination is others can see vision. It is critical to articulate a bright future with clarity that everyone can see.

Scrappiness: Tough challenges call for resourcefulness and pragmatism. You need to stay close to the ground, wallowing in every detail and all over any opportunity that arises.

Experimentation: You may not have all the right answers up front, but running many experiments changes the battle for the right way forward from arguments to tests. You get data, which leads to correctness and ultimately finding the right answers.

Adaptability: Ask yourself, would you rather be right or successful? That needs to be top of mind at all times because times change and we change. You want strong views weakly held.

Focus: Once you gain clarity from experiments and adaptation, then it’s time to focus on a small number of ultra-clear goals. When those are defined then it’s all-hands-on-deck.

Deferral of gratification: You need the stomach (and resources!) to reject near-term rewards for enduring success.

An entrepreneurial mindset: This is true both for new companies and existing companies. It’s a bit of a mantra. We own the company. We make the business. We control our future. It’s on us.

How to Build a Startup that Thrives – SXSW V2V 2013

At the inaugural SXSW V2V this August, I had the opportunity to deliver a 20/20 Vision talk on “How to Build a Startup that Thrives.” The talk answered the question of “can today’s startups become tomorrow’s General Mills or P&Gs?” In the startup world, overnight success stories make a big splash. But what happens when initial rounds of investment dry up, the press moves on and success relies on your business strategy as much as your creativity? The talk was meant to show you how to look beyond the first 5 years to build a foundation for the next 60.

The team at SXSW V2V just posted the talk in its entirety, which you can view by clicking the video link here.  I’d love to hear your thoughts.