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.

The Rise of Brand Tech

When the industry talks about startups and technology in the advertising industry, it often receives the shorthand description of “AdTech”.  It is a term that I have always struggled with from the perspective of a Brand Marketer.  Most brand marketers aren’t hands on when it comes to their media buys.  Instead they rely on the expertise of their internal media staff and external media agencies to understand the differences in Automated Performance, Real-Time Bidding, DSP’s, Agency Trading Desks, and all the other odd sounding language of AdTech.  They know their budget allocation of their media dollars, but not the details of the buys themselves.

On the other hand, we have seen an increasing number of startups that are calling directly on marketers themselves.  The rise makes complete sense when you consider Gartner’s prediction that by 2017 the CMO will Spend More on IT Than the CIO.  Or that by 2015, 25% of enterprises will have a Chief Digital Officer.  Salesforce for one is capitalzing on this shift as they have spent $3.5 billion to get into the CMO Suite through the acquisitions of Exact Target, Buddy Media, Radian6 & Social.com.

While Salesforce talks of the Marketing Cloud, I lean towards calling this new area of startups “Brand Tech.”  Brand Tech is the concept of technology startups that live in the worlds of the CMO and Brand Marketers.  Its not about the traditional working dollars of media or CPM’s necessarily, but new channels for marketers to reach consumers.   Brand Tech defines companies in Content Marketing, Loyalty, Social Sharing, Gamification, and other emerging channels. These themes are at the heart of many of the companies that graduate from The Brandery in this space including Donde, Ahalogy, and CrowdHall.

Speaking of The Brandery, the rise of Brand Tech could lead to another shift in the startup space when it comes to geography.  In particular, it could lead to a shift in the cities where business is done between startups and brand marketers.   I was talking with a Brand Tech startup founder who previously spent his days in the AdTech world.   Based in New York, he told the story of how his AdTech startup led him to spend every day calling on the likes of media companies such as Mediavest, Carat, and GroupM throughout NYC.  But since moving to the world of Brand Tech, it meant being on a plan and heading to Cincinnati, Minneapolis, Detroit, and Chicago to visit the headquarters of the largest brand marketers instead.   As he thinks about building out his business development team, this means he is going to be looking at those cities for expansion, instead of just building a sales team on the East Coast.

The rise of Brand Tech is going to have a fundamental change on the both the startup world and the marketing industry.  For startups, it means finding the right investors that understand this space and the right geography to capitalize on the business.  And for marketers, it is going to mean becoming increasingly focused on external innovation and new channels instead of just the allocation of their media budget.  For both, its going to be exciting change ripe with opportunities.

 

 

A Merging of 19th Century and 21st Century Entrepreneurship

When the Mercantile Library in Cincinnati opened its doors in 1835, the 19th century institution stood in the middle of the fast-growing nation’s busiest startup community.  It was a community that would give birth to some of the largest companies in the country including names like Procter & Gamble, Kroger, and E.W. Scripps.  A group of 45 young, energetic, and confident merchants came together to organize the Library and put themselves on track to become the entrepreneurial engines of the growing city’s future prosperity.

Mercantile LIbrary – Courtesy of Urban Cincy

This history, firmly rooted in entrepreneurship, was what attracted me to recently join the Mercantile Library Board of Directors.  It was an opportunity to take a deeper role in one of our city’s cultural gems, while also helping guide the Mercantile as it sets its sights on a third century of invention and reinvention.

This past weekend saw one of our first efforts in that path of reinvention as we brought the 21st Century concept of a Hackathon to the Mercantile.  The goal of the Hackathon was to convene the brightest minds in the city to help us come up with the best way to present the Library to a new generation of readers, writers, and thinkers.   The result was a group of designers and hackers that came together for 36 hours to reimagine the digital presence of the Mercantile Library.  From mobile apps to open data to new website designs, the results were pretty remarkable.  In fact, every team had at least one concept that the Library plans on leveraging in the coming months as the Mercantile Library charts their path for the next 175 years.  I’m looking forward to taking part in the journey.