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Launching a Non-High Tech Start-Up

Launching a Non-High Tech Start-Up

By: David Dussault

Chapter One: Where do you start?

The Start-Up Scene in Upstate NY
Over the last several years, I have become actively engaged in the start-up ecosystem that is emerging in Upstate NY. High tech incubators and accelerators are popping up, RPI manages a monthly start-up tech valley event, there is a local chapter of Google Startup Grind and schools all over the area are developing curricula in entrepreneurship. When I first started my company eight years ago, this vibrant and emerging ecosystem did not exist in the same frequency as it does today.

There are some shining examples of successful entrepreneurial ecosystems and influencers in Upstate such as the StartFast Accelerator in Syracuse run by my good friends Nasir Ali and Chuck Stormon. The Syracuse Tech Garden and Sandbox are phenomenal examples of combining shared space, education and mentorship to launch some enduring businesses. Upstate Venture Connect (uvc.org) is successfully connecting entrepreneurs, investors and influencers across Upstate to drive better start-up activity and RPI is hosting fantastic gatherings and start-up competitions.

As the average person reads about all of these wonderful activities; the narrative is typically centered on high tech businesses and younger generations (college age or mid-twenties). This is for good reason. The cost of starting a high tech business has dropped dramatically and what used to cost hundreds of thousands of dollars (to build websites, write code, etc) can be completed by a few smart coders and a few thousand dollars with a laptop. The world is shifting to mobile and this disruption is changing business models. Additionally, entrepreneurship can be hard and it takes a long time to build a good company. The younger generation have far less responsibilities (families, homes, vehicles, etc) and can more easily make the sacrifices required to start and grow a high tech company.

I love how the entrepreneurial ecosystem is building in upstate and I am actively involved in it both financially and personally. I have committed to investing in several angel groups, have directly invested in multiple start-ups and am engaged in a small network of successful entrepreneurs, investors and influencers across New York state with a mission to build an interconnected ecosystem across the whole region.

However, I am often approached by entrepreneurs who are further along in their careers, whom have families, most often work for one of the amazing large corporations in our area and they typically have some serious domain expertise but very little knowledge on how to start a company. Their start-up ideas range from building a great industrial services business to a fitness franchise and other non-high tech companies that could create real value, generate jobs and make a valuable impact in our community. There is only one problem – these folks generally do not know where to turn to transform their idea from concept to reality.

Most of the entrepreneurial resources in our community are geared towards technology companies with breakthrough potential and scaling characteristics. Even with the emerging ecosystem coming to life in our area, venture capital money is hard to come by and there is a major gap in our Angel Investing and Mentoring community: (see business review article for more clarification on this growing gap) that leaves many good ideas on the back of the napkin. Where does the non-high tech entrepreneur turn?

The Runway Dilemma
My typical meeting with a non-high tech entrepreneur often begins with the notion that they have a great idea but don’t know where to go with it. They don’t know how to raise money, create a business plan, work with banks or even how to identify customers in some cases. I have come to call this the “Runway Dilemma.”

Using the metaphor of an airport, I often tell the story that a first time entrepreneur is stuck in the terminal of an airport as a pilot. They have this wonderful idea and the skills to do something with it, but they don’t know how to take the idea and board the plane, taxi out to the tarmac and get on the runway. The runway provides clear site as to how the entrepreneur can grow their business and its nothing but clear skies ahead. However, most folks do not know how to navigate the terminal, boarding process and taxi’ing in order to get their idea on the runway.

The terminal in this metaphor illustrates the general marketplace. There are people everywhere buzzing with excitement, anxiety and fear and each has a destination and a purpose. The Entrepreneur has a general flight plan (their idea) and typically knows where their destination should be but isn’t sure about which plane to board. They do not have access to the departures information, flight details, crew makeup or the plane itself – as all of these represent the data and resources required to get their idea into motion and off the ground. The plane itself represents their business. It is a structure that holds the team with a central cockpit to control and navigate it, fuel, food and other resources (cash) to ensure it can get to its destination.

Finally, the plane has coordinates. The pilot understands where it must go in order to reach its destination and they choose the runway that typically points the plane in the right direction. The plane squares to the runway, plugs its coordinates, validates it has all the required resources in check and they push the throttle. Most entrepreneurs can never get to this point because they can’t get out of the terminal and their idea remains a diagram on the back of a napkin.

The resources in our area that help entrepreneurs get on the runway are designed for high tech businesses. This leaves a big gap for all of the non-high tech entrepreneurs with great business ideas.

The First Step for the Non-High Tech Entrepreneur
First time, non-high tech entrepreneurs must throw away all of the entrepreneurship materials they have read and studied to this point. Some of this info is valuable, but the twelve steps to writing a great business plan is ineffective. Banks do not fund business plans and you are too early in the process to truly know which direction you will be going. I often meet with people who tell me that they are researching and writing a “comprehensive business plan” that will chart their entrepreneurial journeys. They have fancy charts, great textbook business model ideas and typically underestimate the amount of money it will take to start the business.

My advice to the non-high tech entrepreneur with an idea and who is facing the runway dilemma is to do three simple things first. These include:

  1. Define in explicit detail what real problem your idea will solve. Why is the problem you identify really a problem?
  2. How will your idea solve this problem and what real value will come from it?
  3. Who is willing to pay for your idea to solve their problem (list specific people, companies or groups). Are they paying someone else today to solve it?

I call this first step the Clarification Phase. The answers to these questions should take up no more than one written page and if the entrepreneur is truly knowledgeable in their area of expertise, they should be able to answer these questions clearly. The reason I call this the clarification phase is that this will provide the evidence necessary to clarify whether your idea has merit or not. Just because you have a great idea doesn’t mean anyone is willing to pay for it. Can you solve a problem and in doing so, create real value for a real customer?

Once you have had the opportunity to iterate the clarification phase to the point where you are convinced you are solving a real problem, you are ready to move on to the next step. However, we will cover those next steps in future posts.

Chapter One Conclusion
I decided to write a blog series on the non-high tech entrepreneur because it is close to my heart. Even though I started a high tech industrial business eight years ago and have grown the company 105%+ per year since 2007 with my team, we are still not considered a high tech enterprise. I struggled early on in starting my business but had the fortunate circumstance to bring GE on as my first customer (and previous employer) who walked along side me during the startup and growth phases. Their support, resources and patience with our team allowed us to build in a very successful way.

Additionally, as I have become much more engaged in the emerging start-up ecosystem in our area, I have identified that many of the resources and information are geared towards high tech enterprises – and rightfully so. The non-high tech entrepreneur does not have a substantial network to turn to in order to gather investment or other traction to get their business launched.

Last, our area is lacking significant investment and mentorship networks for non-high tech businesses. Start-up heroes and mentors such as Harry Apkarian and Walt Robb are not being replaced and there is a wide gap in our area to help the general entrepreneur.

I wanted to use this post to reach out to the non-high tech entrepreneurs and provide them with a simplified approach to getting their idea out of the terminal. I will initiate 4-5 additional posts (shorter) after this one to provide further details on the steps and processes entrepreneurs can take to get their business off the ground.

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