- Category: Entrepreneurship
- Published on July 13, 2014
- Written by Sherwood Neiss
When recently visiting Wine Country USA for a storybook wedding, I was taken aback by the wine, the scenery, and the lifestyle. I understood why so many people are drawn to a life of making wines. However, I learned that making wine isn't easy, isn't cheap, most vineyards take a long time before they start-producing grapes, and a longer time before they see a profit. I also learned that businesses that support the industry are categorized as either those that grow grapes or those that make wine. What about all the other opportunities?
Being an entrepreneur, proponent of the crowdfunding movement, and a consummate 'idea guy,' I thought there was so much more potential to Wine Country USA than what I was seeing. Sure there were the hotels, spas, and restaurants that come with such an ideal location but what about the startups? Why isn't Wine Country USA another Silicon Valley? Not for technology, but for the wine industry? Why isn't there an incubator there focused on creating businesses that come from selling all parts of the wine than just the grapes?
In June, I had the chance to speak at Startup Iceland. In a speech given by the President of Iceland before I spoke about Crowdfunding's potential for Iceland, I learned how this island nation of 300,000 people is turning their core competency, fishing, into an industry of products and services consumed by the global fishing industry. In doing this, these businesses have helped the country recover from the its own financial meltdown to create jobs and economic opportunity.
Iceland did this by thinking out of the box. A perfect example of this is the Iceland Ocean Cluster House, a privately owned business incubator focused on ocean-related industries. The Ocean Cluster brings together people from very different companies and industries so they can exchange ideas and collaborate on money-generating concepts. Businesses have to pay a fee to join, but they are paired with other businesses to develop projects.
Nearly 40 companies in the group have offices in the Ocean Cluster House, an old fish warehouse in Reykjavik that was renovated in 2012. And it isn't just about the fillets. Companies produce products that turn enzymes from fish intestines into cosmetics, bones into protein powder, and fish leather into expensive garments. They sell these products globally. And when you start to think about how broadly these products are used you can see the potential is much more than just the meat.
How would Wine Country USA take its core competency and accomplish the same? Here are some thoughts:
- Find an old abandoned warehouse and convert it into a modern incubator. From the looks of it, there are hundreds of options.
- Fund this with either private donations, a matching grant by local municipalities or crowdfund it with the community. If you crowdfund it, give investors some equity in the incubator. This will turn them from passive supporters to active investors. They will become marketing and branding agents for the incubator and help spread the word. (Note: The Iceland Ocean Cluster is a private company that receives little government funding).
- Court the local universities and institutions focused on educating students about the wine industry and foster business plan competitions to spur innovation. Invite winning ideas and the ones with the greatest potential to join the incubator.
- Use crowdfunding to test the viability of these businesses to raise seed capital to build out their business concepts in the incubator. Provide matching grants from the wine industry.
- Encourage traditional businesses (technology, graphic artists, legal and accounting) to set up offices in the incubator to support these startups and share ideas and best practices.
- Mimic the "Alliance of Ocean Clusters in the North Atlantic" an association of similar fish-focused clusters to form the "Alliance of Wine Clusters" to cross-pollinate ideas and technologies.
The Ocean Cluster House is an amazing center for startups focused on the fish industry. A Wine Cluster can be a potential model for fostering innovation in Wine Country's manufacturing, processing and agriculture industries. Wine Country is well suited to develop its own version of the Iceland Ocean Cluster because it has a wide variety of wine-related businesses and some top wine research institutions, such as the University of California, Davis. A Wine Cluster could serve as a model for similar wine clusters globally. And it can bring a lot more innovation, entrepreneurship, and jobs to an area where a lot of people would love to live.
- Category: Entrepreneurship
- Published on June 19, 2014
- Written by Sherwood Neiss
Today, I turn 45. To be honest, I’m not in the least bit thrilled about that number. Sure I don’t feel like I’m 45. Clearly my sense of humor wouldn’t match that of a 45 year old. But I’m 45 and that’s a reality, so I just have to deal with it.
I do this crazy thing every 5 years where I get my body in the best shape it has ever been in. This anniversary is no different with the exception that I decided to do what many advised against. I did the unthinkable for a person my age and joined CrossFit®. CrossFit for those who don’t know is an intense cardio weight workout. Those in it espouse its benefits as if they were members of a cult. Those outside of it fear it is a masochistic workout that can do more harm than good.
After 4 months, I have to admit I’ve become part of the cult. I’ve remained unscathed despite the naysayers. And I’m getting more than a fit body. CrossFit has made me a sharper entrepreneur and the lessons that I’ve learned are many of the same lessons any entrepreneur can learn about building and growing a successful venture.
- It all starts with a healthy body. Without a healthy body you cannot accomplish anything. Exercise while it may be painful during, makes you feel good afterwards. A healthy body leads to a healthy mind. A healthy mind gives you the ability to think clearly, logically, and strategically. These are all skills entrepreneurs need to use everyday.
- CrossFit is both an individual and team sport. So is entrepreneurship. Both require that you set individual and team (aka company) goals. In both cases, you should have a long-term objective. In both cases if you set smaller, daily, challenging yet achievable goals, you will have a greater chance of reaching your desired outcomes.
- Crossfit like running a business is never the same routine. Working out and managing the operations of a business is never ending. If you give it your all every day you will never let yourself or your company down. CrossFit also teaches you how to manage multiple things at the same time and how to prioritize. Important business skills.
- In CrossFit it is all about showing up and execution. This includes stretching, warming up, exercising, and cooling down. In business this equals researching, preparing, executing, and following through. Taking time to prepare for what you are going to do will allow you to execute better and that doesn’t only relate to what happens in a gym.
- In CrossFit if you aren’t a puddle of sweat afterwards you lack commitment. In business if you don’t feel like you’ve given it your all, you lack determination. A business cannot succeed without determination and your body will not get into shape without commitment.
- Getting in shape isn’t a sprint but a marathon. You train daily for incremental improvement. The end game comes from your ability to stay on track and endure the hard work. Growing a business doesn’t happen overnight and neither does getting rich. So go into it with a long-term outlook and you can get both the business and body you desire.
- It isn’t about the weight but the form. I’ve never had a CrossFit coach tell me to put on more weight. As a matter of fact I usually do less than the prescribed women’s weight. However what I do hear is coaching (aka mentorship in business) about how to perform the exercise (or deal with a business challenge). In business execution isn’t always about how fast you do something but how well you do it. People judge you for what you can accomplish and how well you accomplish it.
- In CrossFit even though you might have done an exercise 100 times, they teach it to you as if it were your first time. In business repetition is key. Employees and investors need to understand what you are trying to accomplish. By repeating it you reinforce in them what you want them to know, what you want them to do, how you want them to do it, and what outcome you expect.
- There is risk everywhere. You might have heard stories about people hurting themselves doing CrossFit. In CrossFit you are taught over and over how to perform an exercise. (See repetition above). They teach you the right way to do an exercise and also show you the wrong way. Nonetheless, people sometimes don’t listen or forget what they are taught. That can lead to harm. Business is the same. You need to listen to learn. You need to practice to make perfect but there’s always the risk that something could go wrong. There are no guarantees.
- You can’t think negative thoughts and complete a rigorous workout the same as you can’t think negative thoughts and succeed as an entrepreneur. You need to think positive, have a “can do” attitude, and push forward. You need to have a dose of humility and a strong sense of confidence. Not everyone can lift heavy weights (nor should they). And not everyone can take on the challenges of starting and growing a business. You need to be honest about what you can do however you should be confident in your capabilities.
- Be encouraging and help others. Ever try to exercise when people tell you not to? Ever try to work when people tell you not to? It is easy to skip out. If you are encouraging and helping others chances are they’ll be better off for it and you’ll feel good about it. A simple “you can do it” shows you care. It will also engage people to do more than they think they can. It sure helps when lifting heavy weights.
- Competition is a natural part of CrossFit. It is also a natural part of business and life. How you deal with it determines how you will succeed. Look at competition with a positive attitude and not something from which to run away.
- Engage diversity. In CrossFit, you don’t have to be a 20 something white male to compete. Thanks to crowdfunding now you don’t have to live in Silicon Valley and be a tech only company to start and grow a business. You can be a minoirty in an innercity but leverage your online social network to help you succeed. Embrace who you are, what you want to do, and a community of people around you to fulfill your dreams.
- Watch others but be your own person. In Crossfit I like to see how others are performing an exercise and when they hit exhaustion. I use that to pace myself so that I can complete what I need in the time allocated. In business survey the landscape to see what others are doing. Use that to strategically plan your path forward. And finally …
- A fist bump means “job well done,” “I’m proud of you,” “we did it,” “let’s keep on going.” Start bumping fists or whatever else you can do to commend people in your business and around you on a job well done. It is a small gesture that will carry you and your company a long way.
- Category: Entrepreneurship
- Published on March 23, 2013
- Written by Sherwood Neiss
SXSW 2013 is over and the cultural shifts taking place on the horizon are becoming apparent. One of the biggest shifts will be the impact crowdfunding will have over the next year. In our panel, the Global Impact of Crowdfund Investing, Jason Best and I described how Crowdfunomics© will sweep the globe. Crowdfunomics is the economic impact of crowdfunding. It is the business case for the social web we’ve been waiting for. It is different from donation-based crowdfunding because up until now there was no financial return tied to those donated dollars. Rather than giving to support a cause, you are now investing in people with ideas that have profit potential.
Crowdfunomics is investment-based crowdfunding. Where communities of interest, geography and origin become more than fans, followers or likes but rather small investors. Where a group of investors decide to fully fund an entrepreneur who has provided digitally recorded disclosures about the business, revenue model and investment opportunity. Where investments flow through SEC-registered websites and fund entrepreneurs in their own backyards, in a way that is fraud free (background checks are mandated in the legislation) and transparent. These community businesses will provide economic stimulus and sustainable jobs and the money will cycle from investors to businesses, employees and back to investors in the way of dividends, loan repayments, equity and a return on happiness. Not all companies will be successful but those that have an engaged group of investors stand a better chance.
The 10 day South by Southwest (SXSW) conference contains Interactive (technology/culture), Music, and Film components and takes place every March in Austin, Texas. It began in 1987, and has continued to grow in size. SXSW Interactive is focused on emerging technology and trends. It has earned the festival a reputation as a breeding ground for new ideas and creative technologies. Like the Consumers Electronics Show (CES) in Vegas, it is considered one of the premier events with a Who’s who list of speakers. Speaking slots are coveted and held by names that include famous entrepreneurs, Senators, author and TV personalities. Twitter and Foursquare, everyday tools for tech-enabled Americans, were launched at SXSW. Theory has it, if you can afford to attend and want to be discovered, you’ll be at SXSW parading around with your technology in hand promoting it with a t-shirt on your chest. Just to be in front of the eyes of 27,000 engaged participants who are the cultural and technological vanguard.
Two years ago at SXSW crowdfunding was a concept. Last year, it was a new funding tool for artists or tech-related designers that were using it to gathering massive numbers of followers and hundreds of thousands of dollars of pledges or product pre-orders. Not much attention was focused on the fact that our Bill (we wrote the legislative framework to legalize crowdfunding) was just lumped together with a group of other capital formation bills in the U.S. House and sent to the Senate as part of the very aptly named Jumpstart Our Business Startups (JOBS) Act. The President signed it into law in April 2012. This year crowdfunding is a serious topic. We alone presented on 4 different panels. There were at least 10 other panels that our peers in the crowdfunding industry either spearheaded or participated in. And the buzz was that this is going to spur innovation unlike anything we have ever seen. But not just innovation in apps or technology but in the private capital markets as technologies are built to facilitate communication with thousands of investors seamlessly and reputation management tools á la ebay and amazon are built to review not just ideas, but entrepreneurs, investors and their comments. We have learned the pros and cons of social media. And tying that into capital formation will create more transparent markets.
Investing in private companies (unlike investing in large public companies on stock exchanges) has been around for a long time but these investments have until now - with the passage of the JOBS Act been available, by law, only to the rich. The new Crowdfunding legislation takes friends and family financing and provides an infrastructure, technology and ecosystem to regulate and expand the process. Crowdfunomics will emerge out of the soon to be live crowdfunding provision of the JOBS Act. Once the SEC finishes the rules making, local communities will be able to pick up where Wall Street, the banks and VC’s left off. It will put the power into the hands of people who decide what they want to do with their investible capital. However it will now also include the wisdom and market power of ‘the crowd.’. Companies won’t get funded until the crowd decides they are worthy of funding. Post funding, customers will become investors with a mandate to share knowledge and experience to help the entrepreneur (aka their investment) succeed.
So what will be different between this year’s SXSW and next? This year people were recruiting fans, followers and likes (via the social networks). Next year they’ll be saying, “like what you see? Why not invest in our company?” And with tools like QR codes, they’ll direct people to a funding page on an SEC registered crowdfunding platform very likely hosted by SXSW as well. When people ask companies how successful SXSW was for them, it won’t be measured anymore by ‘likes’ but by how many dollars they raised. The one thing that’s been missing from SXSW until now has been the ability to connect dollars to the ideas. With an engaged crowd of 30,000 next year it will be interesting to see how much investment that equates to.
- Category: Entrepreneurship
- Published on December 14, 2012
DC’s newest and coolest coworking space, WorkDistrict, will open its doors January 2013.
Located in a former TV studio and Living Social event space, WorkDistrict will provide low-cost office, conference and event space, plus operational, growth and funding resources for startups and micro-businesses.
WorkDistrict is different, says co-founder Paul Ballas. “Thanks to low overhead, we’re far cheaper than other coworking spaces, allowing us to support a broader range of businesses. For less than the cost of two lattes a day, our members get collaborative work space, a street address, internet access and office support (and all the free coffee they can drink).”
“Our culture is special,” adds Ballas. “We’re a membership-driven organization focused on tech, sports and other creative businesses. Membership is by application only, and new members must be approved by existing members.”
“Additionally, we are the first coworking space in the country dedicated to helping its members source capital through “crowdfunding”, the raising of small amounts of capital from many individuals over the web,” states co-founder Patrick Menasco. Congress legalized crowdfunding through the Jumpstart Our Business Startups Act (JOBS Act) of 2012. The Securities and Exchange Commission (SEC) is expected to issue implementing regulations in 2013. “With the pending SEC action, WorkDistrict’s timing is perfect,” adds Menasco.
To help support its crowdfunding efforts, WorkDistrict has entered into an exclusive strategic partnership with Crowdfund Capital Advisors (CCA). CCA’s principals were the driving force behind the JOBs Act and remain at the forefront of the crowdfunding movement.
Sherwood Neiss, CCA’s principal states, "It was a matter of time before the tenants of co-working met the practice of crowdfunding. WorkDistrict is on the leading edge of incubators that will launch the newest innovate ideas with the support of the crowd. They are setting the stage for how other accelerators globally will operate."
WorkDistrict is located at 2217 14th Street, NW, Second Floor. Starting January 2013, WorkDistrict will be open Monday through Friday, 9:00 am to 6:00 pm (24/7 access optional). Daily, monthly and longer-term memberships are available. Applications and further information may be found at www.workdistrict.com.
- Category: Entrepreneurship
- Published on December 14, 2012
Sherwood Neiss will present at Harvard Business School on January 24, 2012.
Don’t Miss the Revolution: A New Economy Is Here!
This seminar will benefit anyone who wishes to raise funds for a project, invest in CF-backed ventures, or learn how crowdfunding will impact the financial services sector.