Startups & Education in Cincinnati: the Key to Our Economic Future

I've just returned from Washington D.C. as part of the Cincinnati contingent for CEOs for Cities, a network of urban change agents. We were joined by over 40 other cities from the US and Canada in hearing speakers from the White House, urban institutes, and thought leaders from around the country talk about programs and best practices being applied in cities around the world. I came away from D.C. really encouraged - there are a lot of brilliant people working hard right now to ensure our economic future in the U.S.

One of the most astounding statistics we heard relates to education - and its impact on urban economic prosperity. When it comes to urban policy, we often think of affordable housing and the revitalization of disadvantaged neighborhoods. Now there’s another factor that’s crucial to a city’s success: attracting and retaining college graduates. The good news? As a country, we're on it. Obama has set a goal for 2020 to be #1 in the world in post secondary education (in the past, we have been, but in recent years, we’ve dropped in the ranks).

CEO for Cities has found that the amount of talent, or percentage of graduates in a city's population, can explain 58% of a city's success measured by per capita income. According to Carol Coletta, president of CEOs for Cities, "those cities that can attract the greatest number of people with the most talent will be the ones that win." CEOs for Cities did a study on the Talent Dividend and found that by increasing the college graduation rate by 1% would result in a $763 increase in annual regional per capita income. That means that in each of the 51 largest metropolitan areas (Cincinnati is #50), increasing the four-year college attainment rate by one percentage point from its current median of 29.4 percent to 30.4 percent would be associated with an increase in aggregate personal income of $124 billion per year for the nation.

And that’s just the beginning. If you factor in not just the return on investment from increased productivity and associated wages from employment, but also factor in the companies that could be created by recent college grads, the return is much faster and much greater. Case in point: 5 out of 8 of the winners of the Cincinnati Innovates competition were undergraduate students or within one year of graduation. What that tells me is that our young people are not just our future; they are our present.

In economic times like this, we need to look beyond the established companies that fuel our local economy. We need to think seriously about the talent, opportunity, and latent intellectual property that exists in our universities -students, professors, and researchers. According to the Kauffman Foundation, 100% of net job growth from 1981-2001 can be attributed to companies that are less than 5 years old. Today, cities like Pittsburgh are capitalizing on startups to fuel their economic growth.

A decade ago, venture capital investing in Pittsburgh was a blip on the national radar, number 31 to be exact, down from cities like San Francisco, Boston, and New York. Data compiled by the National Venture Capital Association, Thomson Financial, and PWC Money Tree for 2006 shows the Pittsburgh region at number 16, one of the largest relative increases in venture capital (VC) investment among all regions in the United States. Pennsylvania also now ranks third in the country for total VC jobs.

This increase in venture capital and startup companies over the last 10 years has created one of the most startling economic rebounds in the history of the U.S. Pennsylvania venture-backed companies added the most U.S. jobs between 2003-2005 than any other state - 167,000 jobs, beating Texas and California. Startups create jobs.

As a venture capital investor at Neyer Holdings, I work a lot with the University of Cincinnati and other university tech transfer offices to commercialize technologies being developed at our universities. And because of that involvement, I’ve been able to meet some amazing researchers at UC like Jason Heikenfeld, a professor in the Novel Device labs who creates electrofluidic display technologies with industry leaders like Polymer Vision - and has a tough time finding funds at UC to cover patents.

Time to pay attention! Follow the dollars. UC has over $350 million in research going on right now and less than $1 million a year in royalty revenues from technologies it has developed. You might wonder why. Well, at a time when budgets are tight, things like patent funds and offices like the tech transfer office don’t get as much attention as maybe they should. It’s absolutely critical that we properly fund - through foundation grants, private donations, and state funds - these activities. Otherwise, we’ll never reap the rewards of the hard work we do in this region.

If we don’t, do something fast, we’re going to slip down in the ranks of innovative cities into what innovation experts at McKinsey call "Shrinking Pools", markets that are economically stagnant and failing due to lack of innovation. Check out how Cincinnati stacks up in terms of innovation in this interactive world map.

Statewide, we're on the right track. Eric Fingerhut, Chancellor of the Ohio Board of Regents, who oversees the entire university system for the State of Ohio spoke in D.C. at CEOs for Cities about our state's objective to make our universities centers of economic prosperity and talent retention. His commitment to that goal has led to commitment from all the Ohio University presidents: economic prosperity, talent retention, and startups are on the radar in Columbus.

How can you help? The Ohio Third Frontier program is the state funded program that makes organizations like CincyTech, a $10.5 million public-private venture fund here in Cincinnati, possible. CincyTech has already invested $3.4 million in 11 companies that have created 175 jobs at an average annual wage of $66,000 and are on track to create 1,000 jobs over the next eight years. In November, the Third Frontier program will be on the ballot in Ohio. Basically, our economic future will be up for 'renewal'. I hope you will vote to renew that future.

Online game wins top Innovates award | Cincinnati.com | The Cincinnati Enquirer

Online game wins top Innovates award | Cincinnati.com | The Cincinnati Enquirer

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Day Of Coworking

Day Of Coworking

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10 Awesome Online Tools Your Small Business Should Be Using

10 Awesome Online Tools Your Small Business Should Be Using

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Raise capital... or team up!

I just found this awesome article about financing through sweat equity (as opposed to raising capital). Formal or informal, these structures are a great way to get started on a start-up without the brain damage of pre-mature fundraising.

At InOneWeekend, we have a similar participant-owned structure, where everyone who contributes to the end product owns a portion of it. While we attempt to do this on a slightly larger scale (100 people at a time) - it works just as well (maybe even better) when applied to teams of two, three, four, five - you name it. Can't afford your developer? Partner up! Can't afford your branding firm? Team up!

Building Your Team Pre-Financing
Written by Bernard Lunn (See the original article in its entirety at http://www.readwriteweb.com/readwritestart/2009/05/building-your-team-pre-financing.php. This post is part of the ReadWriteStart channel, which is dedicated to profiling startups and entrepreneurs. The channel is sponsored by Microsoft BizSpark)

In our 10 Things to Be Clear About Before You Start, we suggested that you decide whether to build a team of partners or fly solo. If you have decided to build a team of partners, even a small team of two, you'll need to also decide how this partnership will work. Your only currency will be equity in a company that has not been formed and a venture/Web service that is no more than a gleam in the eye.

Create a Small, Balanced Team

Here is the advice of Naval Ravikant, serial entrepreneur and angel investor. His advice is directed at other angel investors, but that is a good context in which to look at this as an entrepreneur:

• "Invest in teams of two to three founders. Five is unstable, one is too hard.
• The best combination is one founder who can sell and one founder who can build.
• The team matters more in enterprise deals, traction matters more in consumer deals"

There is a reason why people talk about "putting the band together" and "rock stars" in this context. Solo artists can do great (think Bob Dylan), and when they get some success, they can bring in session musicians (contractors). But the history of pop music is more about the great combos: Lennon and McCartney, Simon and Garfunkel, Jagger and Richards. Those bands may have had four people in them, and the other two members in each may have been talented and driven, but it was clear who the stars were.

One Leader Might Emerge

But business is different from music. A great band like the Rolling Stones ends up becoming a corporation, but the skill-sets are different. Typically in a business, one founder emerges as the leader and CEO. Think Bill Gates rather than Paul Allen.

There are instances of two partners staying together and really building a big business together. Hewlett and Packard are great examples of this. But this is unusual because it does not fit the need of a company to have a CEO/leader who is recognized as such by employees, customers, and investors.

This is why drawing up some kind of buy/sell agreement is a good idea. You don't even need a lawyer. Download the terms from the Internet. As long as the terms are mutual, nobody will get screwed. The buy/sell agreement simply acknowledges the fact that people change: their needs and motivations change. You might be the one who wants to get out of the partnership and move on. Or you might be the one who buys your partner out. Either should be possible.

But don't get too hung up on the buy/sell agreement. Plenty of founding partners cross that bridge when they get to it. It is a bit messier doing it that way, but something can usually be worked out.

Dividing Up Something that Does Not Exist

We'll cover the basics of creating a legal entity in a later chapter. Most ventures start without being incorporated. You may have heard legendary stories of founders getting a check from an angel first and then having to set up a company and create a bank account.

If the founding team is of two people, it's pretty simple. If you have three or more, you will need to define the founders' agreement one way or another. Here are four options:

1. Purely verbal. "We're all buddies and understand each other, right?"
2. Each of you hires a lawyer and lets them hammer away at each other on your nickel. Hm, now where's that nickel?
3. Document what you have verbally agreed on via email exchanges, and the next time you're all together, print it out and sign it.
4. Download a legal template, put in the terms you have agreed on, and sign it, possibly after getting one hour of legal advice from a buddy at law school.

Somewhere between three and four partners is recommended. Even buddies can misunderstand each other. When there is nothing to fight over, there are no fights. But when it looks like the venture might take off, greed sometimes kicks in, and one founder develops a case of "selective amnesia" regarding something that was verbally agreed on. Even an email record prevents that danger.

The reason to be careful about the legal agreement between the founders is that it helps with the next stage of your startup: bringing in external investors.
Get Your Due Diligence Ducks in a Row

The earliest-stage investor will be looking at just the team and the website. That's it. If your site sucks, sorry. If one of you has a criminal record, whoops. In other words, due diligence (the step after the term sheet and before the contract and cash in bank) is simple.

There is one show-stopper you want to avoid. Anybody who has worked on the website or helped with the venture in any way should sign something that acknowledges the venture's Intellectual Property (IP). If someone comes out of the woodwork and says, "They stole that from me," most investors will be scared off.

You can and should do this even before you form a legal entity. You simply want what in the old days was called a "paper trail," and is now an "email trail," which records what was agreed on. This trail could include:

• The two to three founders saying that each of them owns X amount of Newco (your to-be-established company) and assigning all of their IP related to this venture to Newco.
• A buddy who writes some super code just because they're a friend confirms that they have no financial expectation and assigns all of their IP related to this venture to Newco.
• Somebody who provides a service in return for equity and assigns all of their IP related to this venture to Newco.

Paying with Equity

You may not be able to pay in cash for the things you need done. So, you could agree to pay in equity. Don't do this as a percentage. Use a formula along these lines:

1. What cash rate would this person normally charge? Check that this is normal for the market.
2. Agree to pay twice that amount in equity. The doubling is to cover the risk that they never see anything.
3. Convert the cash into equity at the valuation of the first round.

Don't treat this person or vendor like an investor or partner. They are not. They do not know how to evaluate the venture, so don't waste your time trying. They are a vendor whose payment is being deferred. KISS.

Note: a long-term adviser is a special case that we'll deal with in the next chapter.
Vesting

This comes down to the actual term sheet with the first investor(s), which is covered in a later chapter. But this item is worth considering at the beginning. When somebody invests in a founding team, they invest in the work that the team will do in future. So they want to invest your founding shares over time.

You can haggle about vesting some founding shares from the start if you have already built a lot and gotten some traction. But this is really "at the margin." Don't obsess over it.

You also need this protection with your partners. Say you have a team of three founding partners, each with 33% of founders' stock. You don't want one of them to leave just after funding comes from another venture, or to go off to play music, or whatever. All three of you need that same protection. Build your own partner vesting schedule, typically four years, and present this to the investor(s). They will appreciate that you have thought this through and that your interests are aligned.

Microsoft BizSpark is a startup program that gives you three-year access to the latest Microsoft development tools, as well as connecting you to a nationwide network of investors and incubators. Click here to apply.

PR tool for Start-ups: HARO (HelpAReporter.com) gives you access to free PR

HARO (HelpAReporter.com) is a new free mailing list that gives you access to free newspaper, magazine, and other coverage - essential for getting the word out about your business.

One of the best ways to create buzz for your product or business is through traditional PR like newspapers, magazines, TV, and radio – depending on your demographic. The problem is getting reporters to write your story! By the way – you have to have a story.

Traditionally, you would hire a PR firm to prioritize publications, write your story, and then use their relationships to help you get coverage in those publications. For start-ups, this can be costly. At the high end, you could spend nearly $40,000 trying to generate top-ten pick status at a huge tech event like DEMO – on the low end you’ll spend a minimum of $500 to post a story to PR Newswire, a tool PR professionals use to get national coverage.

If you decide to do it yourself, you’ll have to do quite a bit of emailing and phone calling to drum up interest from reporters. First, you have to know what they’re interested in writing about. You’ll also have to know their deadline and work within that timeframe. And you might have to give them an exclusive on the story. Ultimately, you may call ten reporters and get one or two interested.

Peter Shankman, entrepreneur and PR guru, has taken a different approach – and taken a bit of PR Newswire’s business - by creating a free mailing list HARO (helpareporter.com) where journalists post the stories they’re looking for and what their deadline is.

Example:

Joe Reporter

WIRED Magazine

Query: I’m looking for stories about new tech products that save time/headache.

Deadline: Friday 3pm EST

Contact: joe@wired/ 555-555-5555

What does this mean for start-ups? Access to free PR – more importantly, free PR that’s looking for a story. So, instead of hitting your head against the proverbial wall, looking for someone to write about you, you can sign up for a 3 daily emails, sift through the queries for relevant publications and story topics, and reach out to the reporters with your story.

Tip: Have a story crafted and ready to go with facts, images, quotes, and an enticing headline. All publications are different, but in these days of limited print real estate, shorter is better – 350 words or less. Need help crafting your story and navigating the PR jungle? I’m not a PR expert, but here are two of my local Cincinnati favorites: Dan O’Keeffe and Kevin Dugan.

To signup and start receiving the free daily updates, visit www.helpareporter.com

Michelle Spelman of Flying Pig Games tipped me off to this service. Follow Michelle on Twitter @QuickCount. Follow me @eedwards.

Have a great tip for start-ups? Share it with the rest of the InOneWeekend peeps!

Cincinnati Innovates Competition Launches May 1 - $50,000 in awards

Four-month online contest is aimed at inspiring entrepreneurship

Eight prizes awarded worth $50,000; top prize is $20,000

Cincinnati is one of the most innovative cities in the world. It boasts one of the highest rates of patent applications per capita in the country. Did you know the Uno card game, the Swiffer, the Heimlich maneuver, Benadryl, the oral polio vaccine, the iron lung, the first ambulance service, Ivory Soap, Pringles, the gas mask, and the 3-light traffic signal were all invented in Cincinnati?

Cincinnati Innovates is a regional innovation competition aimed at channeling this innovative spirit into creating companies, connecting inventors and investors and inspiring entrepreneurship.

Cincinnati Innovates from Elizabeth Edwards on Vimeo.

“The best innovations come from the most unexpected places,” says Elizabeth Edwards, a venture capital investor at Neyer Holdings, which is launching the competition with partners Taft Stettinius & Hollister law firm and CincyTech. “The challenge, then, is finding those great ideas.

“As investors, we are constantly seeking out the next big thing – the cool new product, the breakthrough processes. Cincinnati Innovates is a chance to bring those ideas out of the labs, garages and offices all over the city and connect inventors with the resources to turn those ideas into realities.”

The competition is open to anyone with an idea or an invention who has a connection to the 15-county Greater Cincinnati MSA.

To enter, visit www.cincinnatiinnovates.com and:

1. Enter a short description of your innovation – product, business, idea – and upload pictures, video, sketches, or other media to help explain and showcase it.

2. Tell your friends about it. The Community Choice Award is driven by online votes.

Details:

• The competition is open online at www.cincinnatiinnovates.com from May 1-Sept. 1, 2009.

• Anyone can enter - any age, background, level of expertise.

• Any type of innovation is welcome - product, device, business process, etc.

Awards

Commercialization awards sponsored by CincyTech
$20,000, $10,000, and $5,000

Patent Awards sponsored by Taft, Stettinius & Hollister
$10,000, $2,500, and $1,000
(in-kind pro-bono legal services*)

HYPE! Community Choice Award: $2,000
Student Innovator Award: $1,000

What’s next:
Judges, including investors and experts from all industry backgrounds, will select the best innovations of 2009 for the top awards.

Awards will be announced at a ceremony on Sept. 18 at the Contemporary Arts Center in downtown Cincinnati.

A word about our sponsors:
Our sponsors are committed to driving the long-term economic growth of Cincinnati through innovation. To find out more about how they are helping create new technologies, fund start-up companies, and create lasting change in the region, visit www.cincinnatiinnovates.com and click on sponsor details.

CincyTech
The Haile Foundation
Taft Stettinius & Hollister
Cincinnati Children’s Hospital Medical Center
C-Cap
Hamilton County Business Center
Queen City Angels
Neyer Holdings
HYPE Cincinnati
BIOSTART
Northern Kentucky e-Zone
Soapbox Media
Greater Cincinnati Venture Association

Mint.com CEO: Don't be afraid to talk about your ideas

If you were at the GCVA standing-room only event last night you would have seen Aaron Patzer, the impossibly young CEO of Mint.com, who had some sage advice for innovators and entrepreneurs everywhere: Talk to people about your idea!

So many times we get locked into our own heads, falling in love with our oh-so-unique ideas, afraid that someone will steal them. The truth is, good ideas are only proven to be good when they’ve been validated and commercialized. Funny how both validation and commercialization require a conversation.

So don’t be afraid to share your good ideas – in fact – throw them out there! The Good Idea conversation – with a friend, a mentor, a colleague – is energizing. And chances are, the more people you talk to, the better (and better articulated) your idea will become.

LinkedIn CEO: Let Our Start-ups Bail Us Out

A great article from Reid Hoffman, founder and CEO of LinkedIn...

Let Our Start-Ups Bail Us Out

By Reid Hoffman

Tuesday, March 3, 2009; Page A13 - Wall Street Journal

President Obama noted last week that "we have lived through an era where, too often, short-term gains were prized over long-term prosperity." As the $787 billion stimulus is sorted out, we should consider not only what's there but also what's missing. Unless lawmakers move to jump-start key elements of sustainable economic growth, we may find ourselves worse off in a few years.

The stimulus finances important development of infrastructure, renewable energy and scientific research, which is great for jobs in the short term but doesn't guarantee the vibrant economic ecosystem required for sustainability. The credit meltdown, the mortgage crisis and the collapse of automakers have created a climate of fear around investment at precisely the time that new ventures -- not merely new technologies -- need to be championed as the course to stability. Products and services drive a healthy economy. To translate the stimulus into sustainable growth, we need incentives for business innovators.

Entrepreneurs are the fertile soil for job growth and recovery. Small companies represent 99.7 percent of all employer firms, Commerce Department data show. They pay nearly 45 percent of U.S. private payroll and have generated 60 to 80 percent of net new jobs annually over the past decade.

Consider a few start-ups from the past century: Microsoft, MTV, CNN, FedEx, Intel, Hewlett-Packard, Burger King. Each opened during a period of economic downturn. Today, these brands employ hundreds of thousands of people worldwide. We need to prepare for the next Burger King. By empowering individuals and small businesses, an innovation stimulus can help germinate stable industry players for the long term.

Venture capitalists are biding their time -- not for want of good ideas, solid management or stable capital but to ensure that they can get the most bang for their buck. Similarly, venture capital firms are waiting for the slide to stop and the recovery to begin before investing.
The government should improve the situation by offering incentives for entrepreneurship and innovation. How to get started?

First, encourage small business with loans. Apply to the United States the micro-lending model that has proved successful in developing countries, extending credit lines of up to $50,000. Help small businesses invest and grow, reimagine their products and services, and assess their strengths. Localized innovation develops the economy from the ground up.

Second, welcome foreign innovators. Harvard research fellow Vivek Wadhwa reports that immigrants have founded more than half of all Silicon Valley start-ups in the past decade. These immigrant-led, American tech companies employed more than 450,000 workers and grossed $52 billion in 2005. For U.S. companies to employ a highly specialized foreign worker, the employee must hold an H-1B visa, but current law allows for the issuing of only 65,000 H-1B visas per year.

The H-1B cap was established to prevent foreigners from taking American jobs, but, in fact, an education gap frequently leaves American candidates less qualified for these positions. Lawmakers could improve the situation all around by removing the cap on H-1B visas while imposing a 10 percent payroll tax above and beyond the benchmark salary for any position being filled by holders of such visas. The proceeds of the payroll tax could be channeled into U.S. reeducation programs. This compromise would bring the best innovators to work here while subsidizing the continued education of American talent.

Finally, match funds for venture capital and angel investments. Venture firms and investors need financial incentives to invest in companies that create U.S. jobs. What if firms with credible histories could receive as much as $100 million in federal matching funds if their investments create jobs in the United States? Investors could keep their normal return plus 50 percent of the returns on the matching funds, while the other half goes back to the government to revitalize further investment. This would give individuals an incentive to double down on investments they would make anyway, but sooner rather than later.

Having invested in more than 60 start-ups since 2000, I know that financing strategy is key in keeping new ventures afloat. For start-ups, the difference between being a dollar profitable or a dollar unprofitable is life or death. Stable financing lets companies develop good product strategies and become self-sustaining -- and that, on the micro level, is what we need to do with the economy.

This is the time for President Obama to take a page from his campaign playbook. Why stop at tapping the grass roots to debate the stimulus? He should seek to fund innovation at the grass-roots level. Obama is familiar with using YouTube and social networks -- products of start-ups and tools of the people. His administration should make it a point not only to avoid propping up failing, overleveraged institutions but to finance new businesses, back promising ventures, welcome the best foreign minds and nurture native talent. By providing incentives to American ingenuity, we can innovate our way out of this recession.

Interview with LogoTournament Founder Tyler Quinn

A month ago I posted a link to a great start-up resource, LogoTournament, a crowd-sourcing site that instantly connects you with hundreds of logo designers. The site allows business owners (you) to post logo projects, set a price, and receive hundreds of entries from logo designers all over the world competing for your business. I’ve used the site twice with great results – 100 unique designs for $250-500 in a matter of days. The best part? The site allows you to interact directly with the designers, giving them feedback on colors and design.

I’ve become so intrigued by the business model and the incredible value the site delivers to the average entrepreneur, that I reached out to LogoTournament founder, Tyler Quinn, to get his story.

Elizabeth: So tell us more about you. Where are you from? What do you do? Is this the first company you’ve started?
Tyler: I’m based in Calgary, Canada and my education is in marketing and management information systems. I have been involved with the web on a professional level for well over a decade now. I consulted as a web developer to help fund my education and world travel. Currently I am a partner in a number of Canadian online niche shops. My first business was a law mowing service when I was 12 years old. I was fortunate enough to grow up around successful entrepreneurs, so I saw at a fairly early age what was possible. I have been involved in multiple internet ventures, some have been successful, some not.

Elizabeth: How did you come up with the idea for LogoTournament?
Tyler: I had seen design contests taking place on various internet forums and freelancing sites. They were only used by tech savvy people and were very cumbersome and unlikely to be used by a mainstream business person. I built LogoTournament with my end clients in mind so any businessperson regardless of marketing of technical would experience success with the site.

Elizabeth: How long did it take you to get the site up and running once you thought of it?
Tyler: I spent way too long trying to decide on a direction, but once that was fleshed out it took about 5 months to get the site launched. It should have only been about 3 months, but I kept adding to the scope of the project which was a mistake. If I could do it all again, I would reduce the scope to bare essentials and cut development time to less than 8 weeks. Then I would start adding features after launch.

Elizabeth: Did you recruit others to help or is this something you’re doing all on your own?
Tyler: Although I have experience programming small web applications, I did enlist an expert programmer. We worked together to develop the site based on my prototypes and specifications. I also employ a part-time infrastructure person who is in charge of server administration and performance. Just recently LogoTournament has hired a customer service person to help out with emails and community management.

Elizabeth: Did you seek venture capital, and if so, what was your experience?
Tyler: I did not seek venture capital, and LogoTournament was self-sustaining within in a matter of months. A couple of VCs have expressed interest in LogoTournament, but that hasn’t gone any further than the conversation level at this point. One of them that I spoke with was fairly famous in certain circles so it was very flattering. Although with the web I think there is a lot of opportunity to build profitable niche companies without really needing much money.

Elizabeth: In starting your company, what were the key resources that you used to help you get started?
Tyler: The key resources have been open source technology like Linux/Apache/MySQL/PHP, economical web hosting platforms, PPC marketing, readily available global talent, and international payment systems like Paypal.

One of my main inspirations is the book “Getting Real” by 37Signals, and is a must read for anyone building an internet business. I am in agreement with their philosophy of building simple, self-serve, easy to use web applications that do not require a big team to build or run.

I also practice GTD (Gettings Things Done by David Allen) which helps me greatly with keeping a lot of balls in the air without going crazy.

Elizabeth: What makes LogoTournament so special? Why are designers using it? Why are customers using it?
Tyler: Other than the obvious dollar factor, I think designers choose LogoTournament for the sense of community, fairness, competition, and recognition. I believe customers are using it because they can get the logo that the really want with 50-250+ choices, instead of settling on a handful that they might receive from a traditional design firm.

Elizabeth: How many countries are represented among your designers/customers? How did you get the word out - and so globally? What marketing/PR tools and techniques have you used?
Tyler: Our design community is represented by designers from almost one hundred different countries. Our customers hail from over 30 different countries and here are some recent examples browsing through the contests page: the US, Canada, France, Germany, Italy, Kuwait, Israel, Poland, Denmark, Lebanon, Greece, United Kingdom, The Netherlands, Sweden, Austria, and the Dominican Republic. Quite a diverse global crowd, which I think is fantastic. I’ve always been fascinated with entrepreneurship, so I always enjoy browsing through our customer base to see what they all do.

I’ve only done some basic Pay-Per-Click marketing to get things started. I’ve really done my best to offer excellent value and service to customers, which is leading to a significant number of repeat and referrals. Most of the growth now is from word of mouth.

Elizabeth: What’s next for LogoTournament and for Tyler Quinn?
Tyler: My primary focus right now is improving LogoTournament every day for both clients and designers, and increasing the site exposure.

Elizabeth: What lessons have you learned?
Tyler: Launch as quickly as possible. Trim down your concept to the bare essentials. Flesh it out, build it, and get it out there to see how people respond. Stop thinking about it and get going. Test it out before you mortgage your house and quit your day job.

Kudos to LogoTournament and all the web resources that make starting up even easier today. You can check out contests going on now and examples of the great design work at http://www.logotournament.com/.

Register for Cincinnati Entrepreneur Boot Camp

June 3 & 4 C-CAP Entrepreneur Boot Camp
Date: 6/3/2009 8:00 AM - 5:30 PM

Host:
The Circuit

Description:
This is an intensive two-day workshop designed for growth-company entrepreneurs and future entrepreneurs

Day 1: 8:15am – 5:30pm (Registration begins at 7:30am)
Day 2: 8:15am- 4:30pm

Who Should Attend?
• Do you want to obtain startup funding from local investors?
• Do you need help deciding whether your great idea will fly in the marketplace?
• Is your young growth company building its team and creating its infrastructure?

What Will You Learn?
• How to Create a Business Plan That Attracts Investors
• How to Present Your Business Plan to Angels
• Who to Hire—and When
• How to Use Intellectual Property to Create Barriers for Competitors
• What Investors Want – Direct From the Investors
Plus: “One-on-One” sessions with local angels and prominent resource providers, who will give you real-time advice on your business proposal.

Registration includes daily: continental breakfast, refreshments, lunch, conference material

Space is limited and the annual event sells out.

C-Cap reserves the right to restrict registrants to bona fide entrepreneurs
No refunds or credits.

Location:
Health Foundation of Greater Cincinnati
3805 Edwards Road, Suite 500 Cincinnati

Registration Deadline:
5/28/2009
Cost: $249.00

Naming your company: the 6-step tutorial

Naming a product or a company is not an easy task. There's so much wrapped up in a brand name - images it calls to mind, the personality of the word itself, the relevance to the company's offering - and in most cases... it's permanent! Compound that with the fact that every trademark and domain name out there seems encumbered somehow - it can be pretty frustrating.

As frustrating as it can be, it's pretty important to get it right. A name separates you from your competitors and is many times your first impression on a customer. An unforgettable name is a great asset - a way to create a unique and lasting impression on your customers without buying $1 million of advertising.

So let's think of how to go about really naming a product or company for the long run. Igor, a Bay-area naming firm, has come to the rescue with great tutorials on what's in a name.

Check out their "Branding the Beast" free downloadable book at:
http://www.igorinternational.com/process/naming-guide-product-company-names.php

Igor defines names as Functional (like Infoseek), Invented (like Google), Experiential (like Fathead), and Evocative (like Yahoo!). Their book includes an effectiveness score with hundreds of examples and case studies of various well-known brand names.

Here's just a taste of the 6-step process for naming a company in their book:

Step 1: Competitive Analysis - take a look at the other names in your space

Step 2: Positioning - figure out the nuances of your offering and incorporate those into your potential names

Step 3: Name / Brand Development - taking into account your brand, namestorm! Think of all the possibilities and then evaluate those possibilities in the context of your brand essence, character, promise, points of difference, and positioning

Step 4: Trademark Prescreening - you can check out http://www.uspto.gov/ to see live and old trademarks. You should also check the availability of related domain names - http://www.whois.com/ is a good resource.

Step 5: Creative / Testing - run the name or names by some people unfamiliar with the product or company and get reactions. A survey of family and friends or a full-on focus group may do the trick, depending on your budget.

Step 6: Name and Tagline - you have your name, now it's time to apply some context - imagery and taglines can help explain and define your name for your customers.

Happy naming!

Internship Opportunities

I've been pinged a few times (already!) about internships this summer. Working for VC's and start-ups is great experience and there are several firms (including my own) around town that take interns over the summer months and throughout the year.

If you are interested, send your resume to elizabeth@inoneweekend.org and I will connect you with start-ups, Neyer Holdings, and other venture capital firms here in town.

Happy hunting!

The Incredible Value of an Outside Board

In the words of Clay Mathile, “If I had a popcorn stand on a corner in downtown Dayton, I would still have a board of advisors.”

If you missed the GCVA luncheon at the Cincinnati Contemporary Arts Center, you missed a great talk about the value of an outside board of advisors given by Joni Fedders of Aileron, a entrepreneurial resource and campus just outside of Dayton founded by Clay Mathile, former owner of The Iams Company.

A typical venture-backed company has a board of around 5 members that are mostly made up of investors, the CEO/founders, and maybe an industry expert. So, while these boards are critical to decision-making, they are not always objective because they are personally invested in the drivers and outcomes of the business. Investment decisions may require them to get out their checkbooks, HR decisions may require them to fire someone they like, and so on and so forth. Also, these boards are also not necessarily comprised of individuals with relevant experience. Venture firms are generally made up of some pretty sharp individuals (and I’m not just saying this because I work for a venture firm…), but they’re not all-knowing and they may lack the specific expertise that’s needed for a company to really succeed.An outside board of advisors is an objective group of hand-picked experts, seasoned executives, and well-connected individuals that can help the company set strategic goals and identify opportunities that may not be obvious to the less-objective and sometimes not as relevant board of directors. This objective, expert group becomes a powerhouse of ideas when they bring their marketing, financial, and strategic views together in a healthy debate focused on the success of your company.

So, before you even start booking appointments with VCs, get a board of advisors together first. You may have to pay for their expertise, but it’s probably the wisest investment your company can make. And the best part? It’s an incredible compliment to be asked to be a board advisor, so there’s no reason to be shy about asking the executives you most admire to be part of your board.

Innovation in Cincinnati: How we can stay #1

Now that it's been published in Soapbox Media, I thought I'd share the article I wrote just before the holidays on innovation in Cincinnati. You can also check it out on Soapbox here.

Innovation in Cincinnati: How we can stay #1

As a venture capital investor at Neyer Holdings http://www.neyerholdings.com/, I strive to quantify just about everything, so when invited to write a blog on my favorite topic, innovation in Cincinnati, I thought I’d apply some Carmen Sandiego sleuthing to the subject and find out how we stack up against other cities in the US in terms of innovation.

The US Patent and Trademark Office (USPTO) website http://www.uspto.gov/ is a plethora of information about how to file a patent, trademark, or copyright. The USPTO also has an online database where you can search patents and trademarks. So, in my quest to quantify innovation, I started there. Admittedly, not all innovations are patentable (to be patented they must be novel and useful in some way), but patents are a good apples-to-apples indicator of innovation in a region.

So, I picked five Midwest cities - Cincinnati, Chicago, Cleveland, Columbus, and Pittsburgh – and five cities from different parts of the US - Atlanta, Austin, Boston, Seattle and San Francisco – and ran some numbers. It’s important to note that in this analysis I only included the city proper (as opposed to the surrounding metro area), excluding places like Palo Alto from San Francisco and West Chester from Cincinnati.

How we stack up: We’re #1!
You might be interested to know that over 16,037 patents have been issued to Cincinnati inventors since 1976. In today’s numbers, that’s over 48 patents per thousand population. Out of the ten cities I searched Cincinnati had the highest number of issued patents per capita. We are truly an innovative city.

Innovative cities today
Whenever I speak on innovation and entrepreneurship, I often cite San Francisco as my shining-city-on-a-hill of an example. How did I go wrong? I was sure San Francisco was more innovative. Well, in San Francisco, where the population of the city proper is about twice the size of our city, the number of issued patents per thousand is only 26 per thousand compared to our 48 – but they are quickly catching up. Though Cincinnati has far more issued patents per thousand population, San Francisco’s rate of new innovation (or the number of new patent applications in the last 7 years) is pretty extreme, with 28 patent applications per thousand population compared to our 21.



Our challenge now? In order to create long term economic growth, new companies, investment, and jobs, we have to keep up with the cities such as Seattle, San Francisco, and Austin who are tearing it up in terms of new innovation. This graph plots innovation – issued patents on the Y axis and new patent applications on the X axis. We want to be high and to the right – and the only way to get there and stay there is to invent, invent, invent.

So who is inventing all this stuff in our city?
It should come as no surprise that our region is a Mecca for consumer product, surgical, and aircraft technology. In fact, P&G makes up over 15% of our patent applications and together, P&G, GE, and Ethicon make up about 25% of our city’s recent applications. While at 25% our proportion of corporate innovation is slightly higher than some of our metro peers, Seattle has a similar experience with its intellectual property giant, Microsoft. 34% of Seattle’s recent applications were Microsoft applications. But in Cincinnati, who makes up the other 75% of new applications? People just like you.

Inventors in Cincinnati
Back in 1841 James Gamble patented a candle molding machine, the first patent of thousands to be granted to Procter & Gamble. In 1862 Mary Jane Pulte invented a new kind of cleaning gloves, becoming the first Cincinnati woman to be granted a patent.

Granville T. Woods, a Cincinnati inventor at the turn of the century, was simply known as “The Black Edison”. He registered over 60 patents in a variety of technical areas – a phenomenal number for a single inventor. Among his most notable innovations are air brakes, steam boilers, and a telegraph system of sending messages while trains were still in motion. He also developed the concept of the “third rail” in mass-transit subway systems and the “trolley” system for trolley cars.

Today, Cincinnati is home to inventors like Forrest Gauthier, founder of Varis Corporation and current CEO of Tesseron Ltd. Gauthier is the named inventor on over twenty patents in the multi-billion dollar high speed variable data printing industry. He has licensed his innovative technology to some of the largest print controller OEMs in the world, making Cincinnati a center of innovation for commercially viable large scale personalized marketing.

The Heimlich maneuver, the oral polio vaccine, the first working tractor, Pringles, the Uno card game, and the first credit cards (called “Charga-plates”) were all created right here in Cincinnati. Innovation is part of our heritage and something we, as Cincinnatians, can be proud of.

Do your part! Here are six ways Cincinnatians can be even more innovative.

1. Help fund university intellectual property work.
One metric we can easily improve upon is the number of patents issued to our universities. I checked to see how many patents applications are attributed to universities in San Francisco and Seattle, two cities where universities are doing a phenomenal job funding academic intellectual property work. San Francisco and Seattle universities have filed 5-6 times the number of patent applications as our local universities. But don’t worry – this is a problem that is easily solved.

If you’ve visited any of our region’s universities lately, you will find a phenomenal amount of research going on – over $350 million of research in fact - and all of that research desperately needs separate funding for patent work. Most universities just don’t have funds to dedicate to patents, which can cost thousands of dollars each. This is because universities typically fund intellectual property work with revenue from existing royalties (unlike the research itself, which is usually funded through grants). While it works in theory, royalty streams are usually lumpy, creating years of budget gaps – and years of resource-constrained IP offices. In any given year, a university may miss out on millions in potential royalties because a deadline passed for a patent filing. Fortunately, a special committee at UC is working on a way to solve that problem at UC, creating a dedicated fund that will ensure that researchers don’t miss out on patent opportunities due to budget gaps. This small fund will allow breakthrough technologies at our universities to be protected, creating enormous economic value for our region.

2. Don’t be afraid to be a little bit weird.
There’s a bumper sticker you may have seen out on the road “Keep Austin Weird”. There must be some correlation between “weird” and “innovative” because Austin is doing a pretty great job of keeping it weird – and patenting their weird ideas. Austin actually ranked #1 in my random list of ten cities in terms of new innovation, with 32 patent applications per thousand population.

Inventions are by definition novel and many times odd – and they can come from the most unexpected places. The inventor of the Uno game was a barber from Reading. A great example from my own career is a Cincinnati dentist who invented an energy-efficient production process for biofuels. Who knows? The next great Cincinnati inventor may be… You.

3. Don’t be afraid to fail.
Nothing ventured, nothing gained. Failure is absolutely fine. It means you tried. At the InOneWeekend kickoff this past July, Roy Gilbert, Global Director of Operations at Google, gave a great talk about innovation, entrepreneurship, and the keys to success that he’s learned at Google. The idea that stuck with me the most is the way Google approaches failure. At Google, if you reach your goals more than 80% of the time, that means you’re not setting the bar high enough for yourself. To their company, failure is not the end of the world; it’s just another step towards ultimate success.

I believe our city is teeming with latent ideas. In my work, I hear ideas all day long – and I’m amazed at the ingenuity that exists here. To ensure our long term economic success in this region, we need to take a piece of advice from Google and get comfortable with a little more risk and a little more failure. We need to take our ideas and make them real.

4. Consult a patent attorney.
We have world-class intellectual property attorneys here in town. Take advantage of it! If you have a great idea, but not a lot of money to spend on a patent yet, a provisional patent (basically, a rough draft) may be for you. I checked with Taft, a very well-known firm downtown with a strong IP group, to see what a typical provisional patent generally costs. Depending on the complexity and nature of the subject matter, a provisional patent application can be prepared and filed for approximately $2,000-4,000. Non-provisional applications run any where between $6,000 and 8,000. Don’t let the price tag discourage you. Depending on how novel and valuable your idea is, your patent attorney may be able to work with you to get the ball rolling while you raise capital.

5. Make connections with potential investors.
All are welcome to come mix and mingle at the monthly Greater Cincinnati Venture Association meetings http://www.newgcva.com/ where you will find inventors, entrepreneurs, venture capital investors, and others interested in start-ups drinking cocktails, pitching their ideas, and talking about innovation and entrepreneurship. If you’re looking for investment, GCVA will connect you to CincyTech, Queen City Angels, Neyer Holdings, and a variety of venture capital firms. If you’re thinking of making a pitch to investors, contact the GCVA board, who will help you refine your pitch before going in front of investors. You can register for the January 13th GCVA lunch event at the Contemporary Arts Center at www.newgcva.com.

6. Try out the start-up life for a weekend.
Transforming a good idea into a real, live start-up takes a lot of work, but the good news is – you can try it out for a weekend! In July, look out for InOneWeekend, an event where 100 people create a real start-up company in 3 days. Technology, design, and business professionals gather over a weekend to take part in a participant-driven event put on by venture capital investors and successful start-up entrepreneurs. On Friday, we brainstorm ideas and vote on the one we’re going to build. Then on Saturday, we start building every aspect of the company: technology, design, business plan… everything. On Sunday, we launch! To get your name on the list, visit http://www.inoneweekend.org/.


About Elizabeth Edwards
Elizabeth joined Neyer Holdings 2006. As an active investor, Elizabeth delivers capital and builds winning strategies for start-up and growth businesses in a variety of sectors, including energy, life sciences, consumer, and technology.

Elizabeth came to Neyer Holdings from Deloitte Consulting, where she was part of the Strategy & Innovation team, deployed over a broad range of industries, mainly focusing on the health care and life sciences. At Deloitte, Elizabeth’s work focused on strategic marketing, disruptive innovation, and new markets.

Elizabeth holds a BS in Economics and Psychology from the University of Michigan and a MBA from the University of Cincinnati.

She is an active member of the Cincinnati USA Regional Chamber Agenda 360 Initiative, serving on the committee for Economic Competitiveness, and is a founding board member of several community organizations, including the Twenty-first Century Forum and CincyPAC. Founder of Cause Catalyst, Elizabeth fundraises and raises awareness for better diagnostic and therapeutic solutions for melanoma skin cancer. She is a member of the Cincinnati Chamber’s C-Change Class 3, where she was co-chair of the Transportation team that created Fetch, a single number for cab service in Cincinnati (513-35-FETCH). Elizabeth is also the founder of InOneWeekend, an innovation and entrepreneurship organization that hosts participant-driven events where 100 people create a start-up company in 3 days.

In her free time Elizabeth enjoys traveling and downhill skiing, and coaches youth basketball. She is also an amateur pilot and Pilates enthusiast.
You can contact Elizabeth at elizabeth@inoneweekend.org