Tag Archives: TechPad

Human Venture Capital

[Note: I teased this post awhile ago and said I needed to research appropriate links to insert. Well, that never happened. This draft has been waiting for publishing for more than 2 weeks. I’m going with it.]

I’ve been mulling a concept I call Human Venture Capital. A quick googilation shows many others have come up with this “unique” phrasing, but it seems generally to be applied to corporate headhunting. As in, “We’re venture capitalists who happen to invest in people!”

Clever.

But I have a different formulation in mind.

What got me thinking about this was this article that ran in the Roanoke Times. It made a painfully obvious point: we don’t have enough venture capital here in the Valley to spread around as start-up money. That means all the resources that have been devoted, in a top-down fashion, from regional partnerships and local heavyweights to attract and retain IT talent and companies has and will be largely wasted, at least insofar as it is intended to build a local tech economy. They are destined to fail because they do not adequately address basic realities of human existence, e.g. needing money to eat, yet lacking that money, from the period of idea generation until a demonstration of minimum viability attracts the notice of potential investors.

Local groups and partnerships, whether you are talking about 460Angels or Innovation Network, that want to invest in the growth of our local economy do so in the most traditional and least effective way, by seeking to partner with smart and promising businesses.

But “start-up culture” is most fundamentally about a time pre-incorporation. In other words, start-up culture qua culture is about people, and the ideas in the heads of those people, NOT businesses.   It is about, like, a vibe, man.

This is important for Roanoke because, unlike New York or San Francisco, or Austin or DC, it just does not often happen that a logical, thoughtful decision is made to base or grow an IT business here. Again, for extremely obvious reasons: a talent deficit and a lack of capital at the early seed stage.

This may sound a bit circular, and it is, but I think we can get clarity with a concrete example.

If you have a bright and ambitious entrepreneur coming through Virginia Tech, and he wants to start a tech company, what are his options? He can stay in Blacksburg and try to make a go of it, or he can take his idea to the Other Valley. Our local bigwigs want him to stay, keeping his big brain and his youth in our slow, graying area – obviously. But consider his obstacles: he needs help and he needs money.

Here is where you need to actually consider the nitty gritty details, and why it is unrealistic to expect start-up successes without first inculcating a supportive start-up culture:

Let’s assume he has graduated. He now has to pay rent, pay student loans, buy food. He has bills. We’ll be generous in this example and assume his parents are helping him out with those basics.

Ok, he still needs computer crap, servers and whatnot, and office space. Let’s assume here servers are cheap and office space is fairly affordable (Blacksburg does have TechPad, etc.). So far so good.

Then he needs help, employees. Apart from just the bare minimum in terms of being able to pay their own bills, the average employee wants to make a decent living, especially an employee who has the ever-so-in-demand skills needed by a tech startup. But, again, we’re going to give our example man every advantage in this scenario and say that the employees, in addition to being skilled, are also his friends, believing in his vision and willing to work for free.

Take a minute to consider the example so far: a skilled team of professionals without bills willing to work for free. Oh, and they need to maintain this for one year to 18 months.

Does this sound like a common scenario?

And yet, this is the sort of thing that that the aforementioned regional heavyweights are looking for, “young” companies with “scaleable” ideas. In other words, the end product you’d see from a dedicated team after more than a year of hard work.

PLUS!, this team still has to be in Blacksburg, Virginia, at the end of that year, because if they have decamped to NoVA or San Fran, they sure as hell aren’t coming back. (And yet, this is actually the least far-fetched part of the dream scenario, because the cost of living here is really attractive, and if you have the drive and ambition, a year in Blacksburg is probably the same cost as two months in the Bay Area.)

Still, I can’t totally condemn the 460Angels’ and Innovation Networks out there, because this scenario does play out with enough regularity to inspire optimism. In fact, from a purely investment standpoint, this might actually be a strategy preferable to the one faced by VCs in the Other Valley, because if you can step in and invest in a group of guys who have toiled away in obscurity for a year in Blacksburg, for free, then you know you are dealing with a truly dedicated team. However, as the backbone of an economic development strategy for an entire region aspiring to tech relevance, this is pure nonsense…we’re talking about a handful of people. Like, literally 20-30 guys per year come out of Virginia Tech and attempt to start IT businesses, and few of those are going to last a year. Does the Roanoke-Blacksburg-NRV need or deserve the Innovation Network, Third Security, the Virginia Tech Corporate Research initiatives, etcetera etcetera, for TWENTY or THIRTY unpaid jobs per year?

Wait wait wait! No, of course I don’t want to see these resources vanish! I just want to see them doing a better job at, you know, start-up-y things.

Which brings me back to my notion of Human Venture Capital and our example man. What if, instead of waiting to lavish a couple of million dollars on that one Mr. Example who happens to make it a year, we helped a few guys – and gals; let’s not be sexist, y’all – actually make a go of it that first year? Instead of waiting to invest in the companies, we make an upfront investment in the people?

“Pray tell, kind sir, how do we do this?” Easier than you think, and WAAAAAY cheaper than two million bucks: you buy a house or two near TechPad in Blacksburg and CoLab in Roanoke, and you let tech entrepreneurs have a year rent-free. Done.

And I truly do mean it as being just that simple. It would be nice if there was an additional stipend for food, but not necessary…it’s just that start-ups take so much time that it would be nice if we could spare these entrepreneurs the necessity of getting a part time job, but, eh.

And think of the chasm between the risks taken on by the investors in these two scenarios: you invest in a start-up that fails, you get nothing; you invest in a “hostel,” well, either way, you own a house. And the difference in strategy: a huge outlay of cash as a bet on highly leveraged returns, versus a sensible real estate investment for $10,000.

And when I say “you” I mean YOU. You can be a venture capitalist in our burgeoning tech scene. And given the community-focused effort involved, you can do so as a B corp and get tax advantages. Dope.

I’m not saying anything, I’m just sayin’.

But what I’m saying is this: we need to start smaller, but casting a wider net. Worst case scenario, we have more young people stick around town for a year after graduation without accomplishing much. That doesn’t sound too awful, does it?

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The Little Coworking Space That Could: the “unpublishable first draft” edition

You’re about to read a list.

MovelineThe Black Sheep; Heyo; BeHealth SolutionsVirtualU; Marketing Stick; Skill-capped; Ace of Sales; Rural System and Koofers.

What do these have in common? They are all IT start-ups and alumni of TechPad in Blacksburg. There are actually many more companies listed, but they either didn’t have clickable links from TechPad’s member page or the links were dead.

Even if you don’t know anything about these companies or their viability, that is a pretty impressive list.

I’m not sure where I’m going with this. It would be tempting but lazy to compare TechPad with CoLab in Roanoke and say, “See! Blacksburg is a more natural fit for tech start-ups; just look at that long list and compare to the – shall we say – meager start-up offerings on tap at CoLab!”

That would be a jerk thing to do, though, because all indications are that CoLab really is succesful. They don’t turn paying members away at the door just because their business ideas don’t revolve around disruption and/or unicorns (those are buzzwords, y’all). CoLab is a place for all kinds of workers and small businesses. It’s inclusive!

So, yeah, why AM I writing about TechPad…maybe if I keep tapping away at the keyboard there will be magic. Beep boop bop boop beep…

Nothing yet…

Oh, I know: coworking. Yeah…yeah!

Here’s the thing, right, about coworking or whatever:

:::

:::fuck it, I lost my train of thought.

Did I mention that I hit my head doing pull-ups at the gym tonight? True story. I pulled my head right up into the bar. And I’ve got beastly strength, too. Probably gave myself brain damage like a boss.

Write more tomorrow? Question mark…

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Filed under Blacksburg Start-ups, Coworking, Pointless musings