Opportunities in Hampton Roads

Some thoughts on clusters, connections, & collaborations…

Marty KaszubowskiExecutive Director

Center for Enterprise InnovationOld Dominion University

Themes1.Hampton Roads is an

increasingly attractive location for innovative companies to start and grow

2.The region is responding with both formal and informal programs, top-down and bottom-up

3.We need smart people from all around the region to step up and start something new

Small Business “Drives the Economy!!!!”

… Maybe not …

“New” beats small and large every time …

Kaufmann Foundation: “… it is clear that new and young companies, and the entrepreneurs that create them, are the engines of job creation and eventual economic recovery.“ “… 1980-2005, nearly all net job creation in the United States occurred in firms less than five years old.” Kaufmann makes a clear case that it is a firm’s age, not its size, that is the driver of job creation – this has many implications, particularly for policymakers who are focusing on small business as the answer to a dire employment situation. 

Small Business “Drives the Economy!!!!”

NEW Businesses “Drive the

Economy!!!!”

But not all startups are the same!

There are six distinct types of “New Venture”:

1. Small business2. Lifestyle business3. Scalable startup4. Buyable startup5. Social entrepreneur6. Spin-out company

A Startup Is a Temporary Organization Designed to Search for a Repeatable and Scalable Business Model

• Failure is an integral part of the search for the repeatable Business Model

• No Business Plan survives first contact with customers

• Startups demand comfort with chaos and uncertainty

• Startups require access to a supportive community and relevant services

Per Steve Blank, et al

So … What Do New Ventures Need?

Access to stage-appropriate capital

Access to networks of people & institutions to help them gain access to the above …

Access to talent & technologies

Access to professional advice, counsel, mentoring, & services

An entrepreneurial ecosystem includes: Idea generators, which can be company, university, and federal research center staff as well as

individuals and small teams working outside of any formal organization;

Entrepreneurs turning ideas into new ventures that, first, explore the market to determine specific customer needs and preferences and, eventually, turn a repeatable business model into a growing enterprise;

Experienced management that understands growth and expansion and can help new ventures “scale up” in a professional and measured way;

Mentors who have experience working with new and growing ventures and are willing to pass it on in exchange for little compensation other than the satisfaction of knowing they helped a new venture succeed;

Risk- and stage-appropriate funding sources that cover the range of small, to mid-size, to larger capital needs and explicitly address the different TYPES of capital (e.g., equity versus debt) needed by new ventures seeking to exercise uncertain markets;

Customers, especially mature local companies that agree to serve as “early adopters” for local ventures experimenting with new products or services;

Suppliers willing to work with new ventures testing uncertain business models; and

Commercial Partners, willing to offer expertise, facilities, and (usually) non-cash resources that can enable a new venture to test products or services in exchange for an opportunity to participate in the growth of the new market.

Developing an entrepreneurial ecosystem does not happen overnight.  It requires a culture of idea generation,

experimentation, commercialization, success and failure.

Cities and their private sectors stakeholders can help by creating “safe places,” networks, and programs for local entrepreneurs to:Generate ideasLearn & share knowledgeRecruit mentors, experts, and capitalExperiment with their products, services and

technologies. 

The region is investing heavily in the development of our local entrepreneurial skills.

Focused on entrepreneurship as a set of skills that can be applied across professions, markets, and technologies.

Investing in both in formal and informal programs:Formal programs include funded incubators, accelerators,

co-working spaces, mentoring programs, “Entrepreneur in Residence,” business plan contests,” venture funds, etc.

Informal programs include entrepreneurship clubs, expanded networking events, “Startup meetups,” speaker series, on-going “celebration” of entrepreneurship successes.

Re-Invent Hampton RoadsA leadership initiative of the Hampton Roads Community Foundation

Four Study Groups:Civic LeadershipWorkforce DevelopmentIndustry ClustersEntrepreneurship

(http://reinventhr.org/)

What is an Industry Cluster?

ResearchersPractitioners Customers

Where does your organization fit?

15

Wants• One “place”:

• to coordinate current efforts

• for resource matchmaking• to efficiently connect with

qualified people• without being “sold

things”• Quality data connection –

Business services’ reviews• “Bring the online offline”

Hurdles• Current initiatives very

disconnected• City infighting• “Not the easiest place to build

a business”• Regional perception Features• Consolidated list of events• Profiles – add credibility • Communication between

mentors and entrepreneurs• Startup resources and

information• Rich original content

What we learned from talking to entrepreneurs…

Mentor Founder Enthusiast

Characteristics • In one of the various stages of

starting a business.• May read “how-to-be-an-

entrepreneur”• Faces challenges around scale

and capital.• Looking for advice.

Needs• Connection with a qualified

mentor on a specific topic to help grow their business.

• Access to qualified resources and events

• Connections with other local founders

Characteristics • Likes reading entrepreneur

magazines and blogs to see what’s new

• Has startup ideas, but has not taken the leap to starting a business.

• Attends startup/tech meetups.

Needs• A list of local startup/tech

events that provide insight into other local entrepreneurial efforts.

• Connection with entrepreneurs and mentors for guidance and inspiration in moving forward with business ideas.

Characteristics • Successful entrepreneur or

business leader with expertise in their area.

• Has time to give back to local founders

• Takes an interest in developing the local business landscape

Needs• A platform to be connected with

a qualified founder that will not waste their time.

• Information detailing current events in the area.

Clusters & Entrepreneurship – Initial Conditions

Industry Clusters Entrepreneurship Challenges

Cyber Security Advanced Manufacturing Unmanned systems Bio-Sciences Coastal Energy Military Tourism Port & Maritime Modeling & Simulation

Access to capital Coordination of existing &

planned venture support programs

Access to cluster-specific advice & counsel

Networks of like-minded entrepreneurs

Suppliers & customer connections

Clusters & Entrepreneurship -- Programs

Industry Clusters Entrepreneurship Programs

Cluster “upgrade” programs1.Better connecting &

collaborating 2.Common measurement,

benchmarking & monitoring 3.Creating an innovation focus 4.Access to capital

Revised/updated Economic Development models

757Angels E64 Project Mentoring/matching tools &

events

Related “Grass Roots” efforts

Industry Clusters, Econ. Dev. Entrepreneurship Programs

NorfolkConnected VBConnected HamptonRoadsInnovations VB App UBED HR Re-Invent HR, Phase II

1000Four Hatch, PTI, HU Incubator, Franklin

Incubator, Historic Triangle Incubator

1M Cups Startup Meetup(s) StartNorfolk, StartPeninsula ICE757 UnWINEd Strome Center Open House Tidewater Analytics

Shameless Pitch for ODU’s Center for Enterprise Innovation…

Industry Clusters, Econ. Dev. Entrepreneurship Programs

Government Contractor “transition” program

Social Entrepreneurship programs

SBIR/STTR support Data Analysis and Market

Assessment Procurement Assistance Center Product prototyping

Veteran’s Business Outreach Center

Women’s Business Center Technology Applications

Center Launch Hampton Roads

(partnership with Opportunity, Inc.)

Announcements to come …

Related “Grass Roots” Programs

Innovation & Collaboration Entrepreneurship

HamptonRoadsInnovations NorfolkConnected VBConnected UBED HR Incubator Managers Unmanned Systems Group

1000Four Propel Launch Hampton Roads Veterans Business Outreach Center Women’s Business Center Procurement Assistance Center Technology Applications Center Hatch, PTI, HU Incubator, Historic

Triangle Incubator, Franklin Incubator

1.Hampton Roads = innovative companies & commercialization of research

2.The region is responding3.Step up and start something new!

Questions?

Zero-Sum v. Non-Zero-Sum

Market Share Market Creation“Coopetition” CollaborationLow-uncertainty High-uncertaintyEliminate Risk Manage RiskSpecialization TeamworkExecution Experimentation

In an Innovative, “Non-Zero-Sum” Culture: People share a faith in the culture of innovation and

entrepreneurship. Everyone is open to meeting anyone in this community. Everyone understands that, as part of the community, they will

often receive valuable help from others for free or at a very low cost.

They agree to “pay forward” whatever positive benefits they receive.

They give trust to others before expecting to receive trust in return. They treat everyone fairly. We will take advantage of no one. They bring people together, as none of them are as smart as all of

them... They understand that mistakes and failure are acceptable ways of

testing new ideas. They learn from others, and help nurture learning in others. Each person is a role model for everyone else.