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  Entrepreneurship Insights

April 2015

Welcome to the latest bulletin offering entrepreneurial insights from the Startup Owl. Enjoy and learn. This issue is mostly about rural and small town startups.
37 Million Rural Americans

People in rural communities and small towns across America are just as likely to be entrepreneurs as the geeks of Silicon Valley, or the app developers of Austin, Texas.

 

In fact there are 37 million adults in rural communities who consider that they have the ability to start a business*.

 

So why don't more of them commit the act of starting a business? There are several major reasons, including:

  • lack of an entrepreneurial 'ecosystem'
  • small size of the local market
  • limited access to funding.
However, there is much help at hand. There are many more, but the seven below are among many ways a rural startup be well supported and thrive.

One: The leveling effect of the Web allows you to compete with multinationals. You can set up your business on the kitchen table, make your own website, add PayPal, and then delight in your sales at the same time as you stir the soup. For instance, you can build your team in different locations without traveling, using free collaborations apps like Flock or Pie. The availability of online learning is leveling the educational map. Here come silicon prairies, digital villages and mobile hamlets.

Two: Many new forms of funding are now available. This applies very much to rural areas. For example there are Community Supported Businesses, where local people provide direct backing often through advance payment for goods or services. You can learn more, by getting a copy of my paper on Grassroots Entrepreneurship  from the Illinois Institute for Rural Affairs.

Three: Crowdfunding can provide funds, too. For the small scale funding normally needed by rural startups, only reward crowdfunding is available right now, but that works well. Here's an example: the seed sheet produced by CloudFarm , a Vermont rural startup $30K crowdfunded on Kickstarter in December 2014.

Four: More and more food hubs are developing in rural communities. They often enable small food processors and manufacturers to share facilities and learn from one another, for example by using a community kitchen. To learn more about one, look at the Vermont Food Venture Center .

FiveYou don't necessarily have to set up a company. You might simply operate as a solopreneur and register a DBA (Doing Business As), so that you have a name that relates to your activity. This avoids the formalities associated with an LLC or corporation, but of course you would not get limited liability protection. Another route could be as a co-op, such as a food co-op, or a worker co-op. You could register as a Benefit Corporation, or a limited profit company (L3C). It's all about what is coming to be called the 'Fourth Sector' or the 'For-Benefit Enterprise'. Take a look at the short summary on the right, or if you want to read more before taking the leap, read The Emerging Fourth Sector .

Six: With Laughlin Nestor, my partner in Dublin, Ireland, I am setting up a rural incubator in the cloud. Ireland, with 57% of it's population in rural areas, and he has worked for many years in the field. Our new platform will offer similar kinds of support and networking to incubators on the ground, but will be easily accessible to people in remote locations. Our entrepreneurial ecosystem will be very interactive and inclusive. If you want to know more, let me know by email. If you have entrepreneurial friends who could be interested, pass on this newsletter and invite them to get in touch with me, too.

Seven: Rural startups have many advantages over urban equivalents. Working space is much less expensive and many rural entrepreneurs set up at home. Here's a new idea that's becoming popular: the 'hoffice'. That's an office at home that you can share with a small number of other micro-enterprises. It's sort of an incubator without the overhead. If your office is well set up with desks, printers, or say a 3-D printer that can be shared, you could even add extra income. You want to know more: visit hofficea Swedish website in English.

 

* How do I know this? Because there 56 million people in the US who live outside cities (Census 2010)-19.3% of the total population. And, according to the Global Entrepreneurship Monitor 2013 US report, 56% of adults between 18-64 believe that they have the capabilities to start a business. Do the math!

 

Ireland's Startups
Ireland ranks 13th in the World Banks' 2015 rankings for the ease of doing business (the US is 7th). The country has major plans to improve its ecosystem for entrepreneurship.
Ireland, the most internationally focused small rural country, is aiming to increase numbers of startups, and the 5-year survival rate, improve the capacity of startups to grow to scale-all by 25% in the next five years. See  Entrepreneurship in Ireland
There ore than 39 million people in the US (over 10% of Americans), who claim Irish heritage, or the equivalent of 7 times the population of Ireland itself. 
Thanks for reading this issue of Entrepreneurship Insights. If you have any comments or would like help with your startup, do write to me: will@startupowl.com

Sincerely,
 
Will Keyser
a.k.a. The Startup Owl

In This Issue
Successful Entrepreneurs Tell Convincing Stories
Look at these slides to help you reflect on making customers into fans, financial backers into partners, and colleagues behaving like founders. 

The $13 Startup
DrawAttention started when co-founder Kyle Taylor made a whiteboard sticker for his laptop and posted a picture of it on Facebook. His friends liked it and commented, so he saw an opportunity. 

The founders spent $13 on a URL (drawattention.co), whipped up a logo, and in 10 hours - built a site with e-commerce, analytics, social media, and email marketing. They created a product that was unique and versatile for entrepreneurs.

Based in the not-quite rural town of Denton, TX (120K population), Kyle says, "We prefer to create something media worthy-we are talking about the cool thing we can make that people will want." 

Basically the DrawAttention product turns your laptop into a whiteboard so that you can communicate silently with the people around you-think airports or Starbucks.

Co-founder, Eric Swayne, said he was working from home when Kyle told him about his idea, and he volunteered to write everything. He calls it bootstrapping on steroids!

Techmill Denton is an incubator/co-working space for tech startups where Kyle is very active.  He and Clarissa Redwine and curate a weekly digest promoting over a hundred events this year and send it to a community of 1700 subscribers.

 

For-Benefit Enterprise
The For-Benefit Enterprise is a consequence of two main forces: first, the growing dissatisfaction with the way full-blown capitalism works, and second, the rise of business focus on sustainability.

The core attributes of for-benefit enterprises include concern with:
  • social purpose
  • business method
  • inclusive ownership
  • stakeholder governance
  • fair compensation
  • reasonable turns
  • socio-eco responsibility
  • transparency
  • protected assets
You may think that you can simply apply your values and ethics to your company, but you will be more effective if you enshrine them legally at startup.

It's especially important for rural startups, where issues of scale, governance and ownership are pre-eminent. Many startups and small businesses are embracing these principles, as can be seen in the huge growth in the number of certified B-Corps.
Rural Biz Plan Comp Gets 65 Entries
Registration for for the Windham Regional Business Planning Competition in Vermont has just closed-with 65 entries. Amazing that this small rural county (44K population) can attract such a big number of potential startups. 

Similar competitions have been running there since 2006 and have only attracted 86 entries, in total.

Even Brattleboro, the county's biggest town where I teach an MBA entrepreneurship course, only has a population of 12,000.

Prize money may have something to do with it. Lee County, IA equivalent in size offers only $5,000, whereas Wyndham is offering $68,000.
Venture Founders LLC | | will@startupowl.com |
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