The Greater Indianapolis Chamber of Commerce is developing a new weapon for local startups--Slingshot, a business-networking
forum that will give budding entrepreneurs the opportunity to swing sales meetings directly with high-ranking corporate executives.
The effort is modeled after Tailwind, a dot-com-era business group that gave an early boost to local high-tech successes like Exact Target and Performance Assessment Network.
Exact Target, a maker of e-mail marketing software, now has 250 employees, 6,000 clients and annual revenue topping $30 million. PAN, an Internet test provider, was acquired for $75 million in April 2006, with the buyer keeping operations here.
"In our case, it worked," said PAN founder David Pfenninger, recalling his original Tailwind presentation. "We probably got a dozen opportunities out of that connection, and we batted .300. You get one out of three on your sales calls, man, I'll live with that every day."
Tailwind's formula was simple but powerful. A volunteer committee of venture capitalists and veteran entrepreneurs screened business plans submitted by central Indiana's most promising startups.
The best earned the opportunity to pitch their products or services over breakfast to a room filled with CEOs. And the CEOs, who pledged to hold follow-up meetings with the startups, steered them through the corporate purchasing labyrinth. Startups normally struggle to get a salesman's foot in the door.
Exact Target CEO Scott Dorsey said that when his company participated in Tailwind, it had only about 20 employees. His Tailwind presentation led directly to half a dozen new major customers, Dorsey said, including Indianapolis-based Simon Property Group Inc. Exact Target leveraged the credibility it gained with those clients to land many more.
"For us, it really had a big benefit. It was in the first year or two of our business and it gave us visibility in the business community and senior-level contacts," Dorsey said. "There's very little that our community could do to be more beneficial to our startup companies than using their products."
For all its impact, Tailwind lost steam about five years ago when it ran out of worthy startup companies to promote. That won't happen again, argued Slingshot's volunteer chairman Steve Walker, because the chamber is expanding Tailwind's narrow scope.
Tailwind focused primarily on IT startups. But Walker, CEO of Walker Information Inc., said Slingshot has compiled a list of two dozen promising young companies from a variety of sectors, including life sciences, advanced manufacturing and logistics. And because Indiana's entrepreneurial community has grown substantially in the last half-decade, Walker expects to easily find dozens more.
Slingshot will keep Tailwind's CEO breakfast pitch format, Walker said. But the chamber will tweak the theme of each meeting to increase its relevance for busy executives. Each one will be devoted to a specific industry, with audiences tailored accordingly.
That should increase the chances for startups to book sales. Mall owner Simon Property Group isn't likely to buy laboratory services from a life sciences startup, no matter how tight its business plan. The meetings will be more productive, Walker said, if there's more than good will on the table worth exchanging.
"We're going to try to lead the horse to water, not decide whether it will drink or not," he said. "We're not forcing anybody to buy. We're just trying to help give [startups] a leg up."
Ensuring focus for the meetings is just as important for the startups as for the corporate executives, Pfenninger said, and perhaps even more so. Entrepreneurs have far fewer resources than big-company CEOs. And time is something that always seems to be in short supply.
"Time waste is probably even more significant for the small company," he said. "They don't want to be sending somebody out on wild goose chases."
The meetings will begin in September and continue quarterly after that. As an all-volunteer effort, Slingshot primarily will depend on CEOs' donations of time and attention. The chamber expects to cover its marginal costs, estimated at $5,000 per meeting, with internal resources. It also will solicit contributions from corporate sponsors.
Presenters will have about 15 minutes for their PowerPoint routines--a rare opportunity to pitch to a powerful group that's eager to help. Dorsey said boiling down a startup's pitch is the key to translating an introduction into a successful sales call.
"In a short presentation to a very high-level audience, you need to be succinct," he said. "You need to be very clear about your value proposition and what problem you solve, how you add value to these organizations."
The chamber already has secured commitments from about 100 prominent executives to attend Slingshot's breakfasts, and will augment that list in the months to come.
City Securities Corp. CEO Mike Bosway, one of those invited, said he understands he'll need to be patient. But eventually, he said, regular Slingshot attendance will pay off--both for the startups and for his investment firm.
"Having a steady pipeline of companies in front of the group is important. You may go six months before you see one that's outstanding," Bosway said. "But you've got to be persistent about this, or you'll never unearth the jewel."
In order to maintain a steady supply of top-notch startups, the chamber is lining up a high-caliber board to oversee Slingshot and screen potential presenters. They include Jeff Cristee, the local Cisco Systems executive who conceived and managed the original Tailwind group.
Cristee said that if it can link promising startups to ongoing customers, as Tailwind did, Slingshot ultimately could have more impact than direct investments.
"It's one thing to get venture capital to fund your operations. It's another thing to get customer capital," he said. "The great thing about customer capital is that businesses want to be close to where their customers are. If we can build these relationships, then they'll stay here."