Arizona entrepreneurs need to get lean, experts say
Arizona entrepreneurs have been hearing it for years now — in these tough economic times,
startup companies need to tighten their belts and pull up their boots. Essentially, you have
to go lean.
That was the message from a number of entrepreneurs and investment and development
firms at the Arizona Entrepreneurship Conference in Chandler last week. Now in its seventh
year, the conference has been attended by local and national entrepreneurs to provide a
discussion about where the community is going and how to optimize all its resources.
Jeff Pruitt, Tallwave chief executive and partner, discusses the “lean model” for startups.
This year’s conference was aptly named “The End of Business as Usual,” and speakers were
fielded from successful entrepreneurial ventures, economic development organizations, and
investment firms. Through the day-long conference, one message resonated that all
entrepreneurs know all too well. Seed money is out there, but getting it now is extremely
competitive. While this may be dismaying to some, it provides an opportunity to make a
necessary change to the typical start-up model, said Jeff Pruitt, Tallwave chief executive and
partner. Representing the Arizona-based venture development firm, Pruitt said startups
need to maximize their own resources rather than attempting to gain dramatic funding right
from the start. The difference between the “old way” and the “lean way,” is tremendous,
however. Pruitt said entrepreneurs must stay focused to a sound plan and market strategy.
For example, Pruitt said companies should try to pace themselves and run the company for
less, if any major investment relative to their product or service. By taking on less
investment, young businesses will not “chase the money” in order to pay off their investors.
When that happens, companies lose track of their intended purpose, instead, meeting the
needs of their investors.
“In Arizona, with the amount of money we don’t have, the lean-model is definitely the way to
go,” he said. “There are a lot of ideas that aren’t going to get funding.”
Staying lean still involves seed investment, however. A number of speakers discussed the
recent trend of crowd-funding and some of the successes and failures of firms like
Mark Rukavina, founder of Scottsdale-based iMemories and 20-year entrepreneurial
veteran, talks about his experiences during his years starting companies.
Jan Ziff, who started Scottsdale-based Broomstick Productions, Inc. in 2011, detailed her
efforts while trying to raise the $14,000 necessary to launch learning app called Heckerty.
Although her company received funding and is planning on expansion, the former journalist
said her team struggled with staying lean, relying on their own plan and perseverance to
Mark Rukavina, founder of Scottsdale-based iMemories, said he knows the plight of lean
entrepreneurs all too well. Since 1992, Rukavina has been creating and selling companies
in the Internet space. His latest, and arguably greatest, company was funded largely through
his own investment. But that investment was only possible by staying on track for more than
two decades. “Sometimes, it’s all about surviving the storm,” he said.
Bill Reichert, managing director of Garage Technology Ventures, discusses why seed
investments have never been stronger.
One thing entrepreneurs should not be expecting is a tsunami of advance-stage investment,
said Bill Reichert, managing director of Garage Technology Ventures. Reichert runs the Los
Altos-based firm with popular technology investors Guy Kawasaki and Joyce Chung. The firm
specializes in seed and early-stage companies.
While there is a dearth of investment in terms of dollars, investors are spreading out their
seed money to a larger amount of start ups, he said. Coupled with major advances in
technology and a push to use more personal time instead of hiring others, starting a
company has become relatively inexpensive.
But again, sticking to the plan is the key to scalability.
“Seed investing has never been stronger,” he said. “Building a company has never been
Essentially, investment firms are more likely to spend a little money in a lot of places, and
hold their big investments for a potential “sure thing.”
To do this, both Rukavina and Reichert said, companies need to differentiate themselves
from the others competing for investments. This is reflected in a strong adherence to
company design, focus, and passion. Having a strong team, one that shares both the
burdens and dedication, is extremely attractive to investors, they said.
“People trump technology,” Reichert said. “Make a VC fall in love with the team, the
technology, or the vision.”
The seventh-annual Arizona Entrepreneurship Conference was held at Gangplank
headquarters in Chandler, Ariz. The yearly event is organized by the Opportunity through
Arizona, Garage Technology Ventures, Business, Tallwave, Bill Reichert, Mark Rukavina,
iMemories, Seed money
Seed money is out there, but getting it now is extremely competitive. While this may be
dismaying to some, it provides an opportunity to make a necessary change to the typical
start-up model, said Jeff Pruitt, Tallwave chief executive and partner.
Ty Young, Startup Tucson News
http://goo.gl/nHULs - startuptucson