I’ve had the pleasure of hearing Brad Feld speak several times in the last year, most recently at Launch Fest.   One of the things driving our work right now is building a sustainable startup ecosystem in New Orleans and Louisiana.  Brad set forth his premise about the five components required for a successful, sustainable ecosystem at the TechStars Network conference in May. Here’s my summary of his talk.

While small business is vital to communities, the vast majority of new job creation comes from high growth entrepreneurship, and that is what we are focused on in the startup ecosystem.  While there is much focus on ecosystems like Silicon Valley, Brad believes that there are 100 cities in us that can support vibrant long term entrepreneurial communities.  His premise is informed by from his work in and the growth of the Boulder startup community.

Working towards the goal of creating long term sustainable entrepreneurial communities, we need:

1. Long View – a 20 year timeline – stakeholders must be committed to the community for long term.
2. Entrepreneurial Leaders – it must be led by entrepreneurs – cannot be led by government, non-profits, big companies, VCs, lawyers, accountants, economic development, universities.  All of those stakeholders need to be engaged, but entrepreneurs must drive it.
3. Fresh Meat - need new talent all the time – college graduates & people moving in.
4. Engaging Activities – engage the entrepreneurial community from top to bottom – startup to serial entrepreneurs – get all involved – you need a thing that engages all those people. You want really active engagement for a moderate period of time because its impossible to maintain a high level activity by someone on something that is not core focus.
5. Repeat – must have a rhythm with for a long time.  Must have a beat that last through economic cycles. The only way to build a community is to move beyond boom and bust and build something over extended periods of time.

Thanks to Brad for all the support he’s provided us through the TechStars Network.  I’d love to hear what you think is important to the ecosystem.

I am excited today to announce Launch Pad Ignition, our new startup accelerator program.

This is the culmination of several years of planning and preparation, and we are particularly excited to be launching as a part of the TechStars Network, and by extension the Obama administration’s new Startup America Initiative.

Ignition has been a personal passion project. The conversation started a year ago, after I wrote my open letter to David Cohen (see, they really work).  Andrew Hyde has been a huge supporter and Taylor Davidson has been instrumental in helping us model this out and make it happen. Thank you to the fantastic mentors who have already committed to being onboard.  If you’re interested, please contact me. I’m excited to be working with my co-founders of Barre Tanguis, Will Donaldson, Peter Bodenheimer and Mark Graffagnini, this really is like a startup itself.

An exciting leap for the New Orleans startup ecosystem, Ignition creates a framework to help founders refine their product offering, invigorate their business plans, and raise funding to fuel their growth.  So, if you are a startup in New Orleans, or willing to move to New Orleans to accelerate the growth of your company, definitely check out the info and get your application in before March 18.

Learn more about Launch Pad Ignition, the TechStars Network, and Startup America.  See more detailed information in our press release. We are proud to be playing a role in accelerating entrepreneurship.  Startups, start your engines!

Dear David -

Last night we had the pleasure of attending the TechStars demo day in Boston where we saw 10 great companies present to 250 mentors, investors, and members of the tech community.  Wow, what an impressive evening and showcase for TechStars.

I’d like to respectively submit for your consideration New Orleans as the next city for TechStars.

You and I have had several conversations over the last year, facilitated by Andrew Hyde, about my desire to launch a mentorship-based seed fund in New Orleans.  We’ve done our homework: studied the models, attended your session at SXSW, and talked to mentors, entrepreneurs and investors all involved with TechStars. You said to me last night “New Orleans is on my radar…” to which I respond: I’m making it my mission to do what it takes to attract TechStars to launch in New Orleans in January of 2011.

I believe we can demonstrate to you that the tech startup community in New Orleans and Louisiana is activated and it would be a winning move for you to launch your Winter session in New Orleans.  Here is what I plan to demonstrate:

• we have a roster of local and national mentors ready to commit
• we have sources of capital that will get behind a TechStars New Orleans
• we have an startup ecosystem of intelligent, passionate, creative, driven entrepreneurs who will provide the core of and be impacted greatly by TechStars
• we have a favorable climate for tech startups with the 35% digital media incentive which makes Louisiana one of the best places for software and Internet companies in the country
• we have a collaborative workspace, Launch Pad, ready to house TechStars companies
• we have activated local leadership lined up to get behind TechStars and make it a success

I have been passionate about the need for a mentorship-based seed fund in New Orleans for the last two years, and I fully believe that the stars are aligned to make it a reality right now with TechStars.  We are committed to making our case to you, learning what we need to know, and answering your questions to make as convincing an argument as possible.

Please make space on the TechStars calendar next January for New Orleans. Thank you for your hospitality in Boston and your consideration. We will be in touch.

Who’s with me?  If you are a startup or entrepreneur who would love to see a TechStars New Orleans, holla back in the comments!

Sincerely,

Chris Schultz

[PS: for those who wonder who I'm writing to here: David Cohen is the founder and CEO of TechStars, a mentorship-driven seed stage investment program for Internet startups.]

There’s been a lot of good news lately about entrepreneurship in Louisiana. With the renewal of the digital media tax credit and the energy around startups lately, things are just going to start taking off, right?

Well, maybe.

I still see some gaps in current eco-system that can be filled with a true mentorship-based seed fund. (In case you’re wondering, I mean a Y-Combinator / TechStars style investment program. Mentorship-based seed funds exist all over the country, I’ve compiled a listing here)

So where are the gaps? Well, here’s what I see:

1. The “Moving Companies to Louisiana” Strategy – one of the biggest stated goals of the digital media tax credit, and a strategy I see LED & GNO Inc among others pursing is trying to lure companies to move to Louisiana with the tax credits, etc. GNO Inc put together a great deck, on what makes New Orleans so appealing. Probably the most visible impact thus far is the EA Sports testing facility in Baton Rouge. Here’s the thing: Established companies have employees. Employees have families, houses, schools located near where the company is currently based. Even though knowledge-based industries like digital media don’t have large infrastructure needs, their employees have established lives.
2. Supporting the “Shoot for the Moon” Companies – I had a conversation with a Launch Pad member on Friday who has been through the startup process several times, and he and many others feel we don’t have the deal flow in Louisiana right now. The problem is that were not quite at the point where people are seeing the wealth creation of other successful companies, and frankly we’re just new to building a startup ecosystem. Deal flow is directly related to entrepreneurs willing to take huge risks. Entrepreneurs willing to take huge risks and “shoot for the moon” is directly related to having an ecosystem that supports risk-taking and acknowledges and accepts failure.
3. Bridging the Gap Between Business Plan and Business - having a great idea doesn’t mean you are prepared to run a company. Most people starting a company have great subject matter expertise or talent, but may not have a fully rounded skill set in the ancillary areas of building a company. First time entrepreneurs get bogged down in this stuff: accounting, legal, personnel management.

So, how does a mentorship-based seed meet these needs and more:

1. Move Folks when its Easy to Move – Start young. Most people entering Y Combinator are just graduating from college or in their 20’s. People are portable at this stage and many digital nomads would love nothing more try out New Orleans for a stint. We’re already seeing this with all the amazing young people coming down here post-K for Teach for America and programs like that. There is a huge difference in a person’s willingness to move based on what stage they are in their lives.
2. Go Big - A lot of people have a “go big” idea, and given the opportunity to pursue it, even for 3-6 months will usually determine if there is something there or not. Of course, this is the riskiest stage of an idea, but most people never get the shot to really go for it. I know so many people trying to bootstrap a startup right now, but paying the bills with freelance work. The freelance work engulfs you and you never really get to go for the big idea. Often times (I am an example), people build service businesses to pay the bills, and though they may be successful, they aren’t investable and aren’t the big win that we all want to see happen. A seed fund that provides Ramen-soup money for founders to pursue an idea and get it to a prototype without having to divide their time to pay the bills really gives entrepreneurs a shot to go big. Think what would happen in Louisiana if every summer we gave 10 young startups enough funding to build out their big idea.
3. Mentorship – these funds are called mentorship-based seed funds for a reason. They don’t just hand entrepreneurs $25k. They have a curriculum and program that teaches the skills required to run a business. Already in New Orleans we’ve created a set of entrepreneurial hubs. This is a huge start, because startups can ask each other questions, and tackle problems together. Filling this out with a true curriculum that removes the headaches of setting up your accounting, legal, etc would enable entrepreneurs to have a singular focus on building their product. We have people in this city willing to devote the time and effort, but the value of this contribution needs to be acknowledged and compensated.

What kind of investment are we talking about?

• 10 companies selected for June – August 2010. Each company gets $25,000 to build a prototype. – $250,000
• The administrative costs of the program are probably equivalent to the investment dollars. – $250,000

When I think about the real-world impact that a program like this would have and the allocation of economic development and grant dollars that are being spent in Louisiana on advertising, conferences, infrastructure, administrative staff, workforce development, it seems like a drop in the bucket to get a program like this off the ground and I believe it is an investment worth making.

What do you think?