Nebraska Startups Get Helping Hand
July 21st, 2015
Of all the new businesses that are created in a given year, the vast majority will be closed within 18 months. To help improve the number of successful startups in Nebraska, a relatively new program organized by the Aksarben Innovation Initiative aims at determining the success of a company before itâ€™s ever open for business.
In a large room filled with computers and other devices at Omahaâ€™s Scott Technology Center, Mike Chochon presented his latest research on his company Prairie Smarts, a tech startup which measures the amount of risk investors have in their portfolio.
Chochon was a financial manager for almost 20 years before founding Prairie Smarts in 2012. He said running his own company is harder than he thought it would be.
â€œI wanted to get a little bit more disciplined in our approach,â€ Chochon said. â€œWeâ€™ve made some mistakes, and we just want to get better as we go to different customer segments going forward.â€
To get better, Chochon enrolled in a 14 week program called Lean LaunchPad, which was organized by the Aksarben Innovation Initiative-a partnership between the University of Nebraska at Omaha, the Scott Technology Center, and the Aksarben Discovery Fund.
Ken Moreano is the Executive Director of the Scott Technology Center and co-founder of the Aksarben Innovation Initiative.
When asked to explain AIIâ€™s mission with Lean LaunchPad, he said, â€œWe really work with both community entrepreneurs and would be entrepreneurs coming out of the University to try to help them work through a disciplined, repeatable process to gather evidence substantiating a path for them in their prospective start-up company.â€
So what does that mean?
â€œWe help baby-sit people that want to start a business, and help them find a direction to decide whether they should go that way for their lifeâ€™s work or not,â€ Moreano further explained.
The AIIâ€™s program is modeled after Stanford professor Steve Blankâ€™s idea to focus on the market viability of a concept before its development. Traci Hancock is the other co-founder of the AII, and said the Lean LaunchPad program replaces the traditional five year business plan.
â€œWhen youâ€™re working in technology, things change very quickly,â€ Hancock said, â€œso you can imagine spending all of your time writing a five year business model that could change in six months doesnâ€™t necessarily make a lot of sense at this pointâ€”the point of idea.â€
Hancock said this is the third class, or cohort, to go through the Lean LaunchPad program in Omaha. There are nine companies currently enrolled, ranging from Chochonâ€™s financial risk assessment company, to an online pharmacy, a medical supply company, even an online store for handcrafted albums.
Moreano said he considers the program successful, even if one of the participants decides not to go into business.
â€œ[The program] mitigates risk and decreases their investment. So they cut bait versus pursuing something that will fail. Weâ€™ve seen companies that have failed for seven years and eventually have to shut it down when they may have been better off shutting down after six months to a year,â€ Moreano said.
According to Bloomberg, about 80 percent of new businesses fail within 18 months. Improving the success rate of startups is one reason why the State of Nebraska took notice of the Aksarben Innovation Initiativeâ€™s Lean LaunchPad program, and why the Nebraska Department of Economic Development is helping fund it through a $30,000 grant.
â€œItâ€™s a pretty small investment, but itâ€™s an important one because we do want to help facilitate the education that happens around entrepreneurship,â€ Joe Fox said. Fox is the business innovation manager for the Department of Economic Development.
He said Lean LaunchPad is helping to improve the pipeline for the stateâ€™s other innovation programs. After a business owner or potential business owner completes the program, Fox said they may be eligible for an additional $50,000 in funding through the stateâ€™s prototype grant program. Fox said the investment in AIIâ€™s Lean LaunchPad is part of the stateâ€™s commitment to retain talented business innovators.
â€œIf youâ€™ve got a good technology and someone with entrepreneurial potential that wants to go out and try and take a technology to market, we absolutely want them to do that here in Nebraska,â€ Fox said.
Mike Chochon said heâ€™s excited to get Prairie Smarts off the ground, and with the knowledge heâ€™s gleaned through the Lean LaunchPad, hopefully be part of the 20 percent of startups that succeed.
â€œTo have them come in and just give a real review of what youâ€™re doing is needed, and theyâ€™re doing that,â€ Chochon said. â€œThat is helping us stay on task. Unfortunately you can at times think you have something, and build something, and then ultimately realize you have nothing.
Fortunately for Chochon, he feels he has something with Prairie Smarts, but heâ€™ll know for sure when his cohort graduates at the end of August.
Comments are closed.