Startup Weekend: How to Take a Company From Concept to Creation in 54 Hours (20 page)

So, let's say you've assembled your team and done your research. Perhaps you've won Startup Weekend or were voted the “idea most likely to make a million dollars.” Let's say you have the validation of the 150 people with whom you spent the weekend. What's the next step?

There are several programs out there that do
mentoring incubation
; that is, they will help to support entrepreneurs both financially and educationally for a few weeks or months to see if their ideas take off. These programs are not easy to get into; however, once you're in, you have the freedom and the mentor expertise at your disposal to really pursue your project full-time and wholeheartedly. Y-Combinator, Tech Stars, and Startup Labs are all great entry points into the world of Startup Funding.

This is the stage at which somebody—an outsider— really starts to believe in your dream. That's when you can move closer to jumping off the entrepreneurial cliff.

This brings us to the next step in the entrepreneurial ladder—the
scaling leap
. Venture capitalists are constantly considering the groups and individuals that come out of the programs we just mentioned. While the people who complete those programs don't automatically get seed funding, many of them do. Meeting the right mentors in those programs can be a ticket to finding financial support.

We do want to pause here to say that not every startup needs venture capital. In fact, very few Fortune 500 companies actually take venture capital money. Many of them experience natural growth that is sustainable over time
without
money coming in from investors. They get regular income from customers instead, and then put that back into the business. But there are certain kinds of companies that can only scale up if they get some infusion of capital from outside. Maybe your team needs to hire more staff or purchase a better server, or perhaps you've outgrown the garage space your family allotted you.

External Growth Leap

Once you have scaled up, your success will be fairly obvious both to you and to your competitors. This indicates that it's time for the next step—the
external growth leap
. This is when you begin to think about acquiring some of the competition, or having them acquire you. For instance, a number of businesses have launched using the Groupon model of group-buying specials and have subsequently been bought out by Groupon. Others will still try to compete with Groupon on a smaller scale, perhaps occupying a niche market. Different entrepreneurs have different feelings about being acquired—that is, exiting the market at this point. Some will see it as success; they walk away with some hefty sum of money. But others will be disappointed that they didn't take their company further. Entrepreneurs can be sentimental, too, and become very attached to both their ideas and their team.

The next steps for those who do go on are the
IPO leap
and the
Fortune 500 leap
. Though these are not common occurrences, they do happen—and they are an important part of the startup ecosystem. Entrepreneurs who have made it this far can turn around and become mentors to those coming up the ladder. They can provide seed capital to teams that are just starting out, and they also provide a representation to the outside world of what a driven entrepreneur can accomplish. We want to create an ecosystem that can support more billion-dollar companies being created.

Leaping More Often

This model is something we have been working on at Startup Weekend for a while now. We believe it is a good place to start. It gives all of us in the entrepreneurial community a common understanding by which to judge how well we are doing at encouraging the formation of startups. We can see, for instance, whether people are getting stuck on a particular step and determine whether we can add resources to help them.

In our experience, a lot of people get stuck between the entrepreneurship leap and the funded leap, because they tend to skip over the cofounder leap. They are keeping their ideas to themselves. They are not sure how to form a team or where to find the right people. We see this as an important niche for Startup Weekend. But we'd also like to get more groups that have already formed to take part in Startup Weekend—recruiting more of the new talent and listening to fresh perspectives, as well as helping them progress with projects on which they are already working.

Startup Weekend's greatest impact can be felt on the community level. As much as we like to think about entrepreneurship as a global phenomenon (and it is) and as much as we like to think about entrepreneurs from all over the world being in contact with each other (and they are), we have found that some of the most interesting developments in entrepreneurship are taking place at the local level. With all of the technology available that allows us to communicate with people on the other side of the world, we have lost sight of how important face-to-face communication can be. Indeed, it is vital to the exchange of ideas, the formation of teams, and the growth of startups.

Right now, entrepreneurs and people interested in entrepreneurship are frequently alone—or feel they are alone. Startup communities and their associated programs and initiatives are often fragmented, broken, or nonexistent, which makes it difficult for aspiring entrepreneurs to find the resources and support they need, when they need it.

On a higher level, institutions and some older programs have extended the myths of entrepreneurship. Therefore, they ultimately do not contribute to the creation of successful ventures or a culture supportive of true entrepreneurship. They continue to suggest that a good idea is the most important part of a business. They encourage budding entrepreneurs to keep their ideas close to the vest, and they worry about who has the rights to some piece of intellectual property—and all this before a company is even launched.

In order to combat this kind of thinking, Startup Weekend is trying to figure out not only how to bring more events to more people in more places, but also how to have a more permanent presence in those communities. How can we build an entrepreneurial culture over time, and not just over a weekend?

For one thing, we'd like to coordinate with other members of the entrepreneurial ecosystem. We want to institute events that prepare entrepreneurs for Startup Weekend and help to support them afterward. We will be having reunion events for people who have participated in the past.

We are also trying to incorporate even more networking during the course of the weekend. Perhaps merely working with the people on your team doesn't provide enough exposure to the talents of the other Startup Weekend attendees. We have been trying a variety of games and contests that will encourage people to do more mingling at future events.

We also want everyone who has participated in a weekend to be able to tap into the entire entrepreneurial network. So we are going to be trying some cross-pollination—sending folks from San Francisco to Chile or from Cairo to New York or Brazil to Tunisia—to allow participants to learn more about the global startup experience. Perhaps this will give them ideas for how to maneuver around some of the onerous regulations that small organizations face, or help them figure out how to expand their business ideas on an international level. What with the world being so flat and all. . . . Well, you get the picture.

The Future of Startup Weekend

Coming together and experiencing a Startup Weekend gets people asking themselves and others:
What's next?
In the past, we haven't been able to supply any kind of support after Startup Weekends, but time and again we watch people come out Monday morning and say, “What's next?” The more people who ask that question, the better—because that question creates the need for more programs and initiatives to help answer it. This, in turn, helps fuel the entrepreneurial revolution from the bottom up.

There is a lot of talk these days about how we encourage entrepreneurship from the top down, whether you work for the government, you're a venture capitalist, a politician, a civil servant, or you're in academia. People constantly ask themselves how they can put this entrepreneurship stuff on top of existing programs and reap the benefits. But none of these plans seem to work. The truth is that it has to be seeded from the grassroots level to succeed.

At Startup Weekend, we are trying to bring people from different parts of the ecosystem together. Over the past few years, high-level people in government and business have been talking at events like the Davos Forum. But those kinds of events weren't attracting the senior CEOs or CTOs from the successful companies in a particular town. And those senior business people weren't meeting the hungry entrepreneurs on the ground who are still at the beginning stages of their careers.

We're finding that the Startup Weekend experience is just as educational for the people on the top rungs of the ecosystem. The more entrepreneurs who get the chance to talk with investors, the more programs investors will create to support those entrepreneurs, and the more entrepreneurs who are then going to be attracted into the programs. We are hoping for, and expecting, this kind of a snowball effect.

The Startup Foundation

In the future, we hope to expand Startup Weekend's influence by forming something called the Startup Foundation. We aim to make this initiative the world's most powerful way to invest in the development of an entrepreneurial community and ecosystem. By focusing on particular cities and towns, we hope to help entrepreneurs meet each other and work together more frequently. This will foster creativity, innovation, and new business creation on a grassroots level. By empowering community leaders across a global network, we can maximize impact, learn from our efforts, and unify on a large scale.

With the support of the Kauffman Foundation, we are planning to appoint Startup Cofounders in eight cities around the world. These leaders will coordinate the efforts of various startup events and try to bring more of these kinds of events to their particular areas. The Startup Cofounders will try to connect disparate groups, including university student organizations, corporations, coworking spaces, chambers of commerce, investors, and so on.

Educating people about what it takes to become an entrepreneur, as well as the great things that entrepreneurship can do for a community, is going to be vital for the Startup Foundation. We want to create more startup evangelists who will bring their friends and colleagues to the network. One of the reasons Startup Weekend has been so successful is that we get people from an extensive variety of backgrounds to come to our events. But we want to cast our net even more widely. We want to promote the kind of curriculum we talked about in Chapter 4—a curriculum of best practices for entrepreneurs. In partnership with people like Steve Blank and Carl Schramm, we are working on ways to spread these ideas through social media, mentoring programs, and even individual blogs as a platform for sharing successes. We have to get the message out there in as many ways as possible.

Another important aspect of this work is our attempt to gain more information about the way startups are formed. Although we've conducted extensive research while tracking Startup Weekend participants' progress over time, there is still a lot we have to learn. One of the key roles that the Startup Foundation sees itself fulfilling is to build a database of information about how startups are formed and how individual entrepreneurs evolve. We would also like to conduct more in-depth analysis of the impact of entrepreneurial activity on job creation.

We will be rolling out the Startup Foundation in eight cities in 2012, and then continue expanding in 2013. This will be a test for us. Ideally, we'd like to see a Startup Cofounder coordinating these efforts in every major city in the United States and in other places around the world. We want to determine whether it's possible to improve the outcomes for individual entrepreneurs by strengthening the overall entrepreneurial community, and to see if there are ways in which we can help people on their startup journeys. So, if you hear a knock at your garage door soon, you'll know who it is!

Conclusion

Viva la Revolution

There is a startup revolution currently taking place. Many people are wondering if it's just another bubble. There is probably a bubble and it will burst. But the startup revolution is based on structural and sustainable changes in technology and business. As venture capitalist Charlie O'Donnell says, “There has never been so much content and so many resources available for entrepreneurs. If you're looking to start something there's no excuse for you to be uninformed.” Rather than becoming frustrated while trying to develop ideas alone, you can actually find out about the kinds of things that venture capitalists are willing to fund. Many venture capital firms have blogs that describe particular models that are of interest to them. The whole system has become much more transparent recently.