Tomorrow’s tech entrepreneurs are more likely than their predecessors to have formal entrepreneurial training.
They not only believe they can start a tech business—some do so before graduating college—but they also expect to be the next Mark Zuckerberg.
And they have vastly more resources, from mentors to networking opportunities, than those who preceded them.
Just ask one of those predecessors, Scott Jones, who earned a computer science degree at Indiana University in the Mesozoic era of 1984 and then moved to the tech bastion of Massachusetts.
At age 25 Jones founded Boston Technology Corp. and invented the underlying technology still used in voice mail systems today.
“When I first came back here from Boston [in the 1990s] I was kind of appalled at how few resources there were to begin a technology or any sort of startup company,” serial entrepreneur Jones, co-founder and CEO of Carmel-based ChaCha Search Inc., recalled during a panel discussion at IBJ’s technology Power Breakfast on March 16.
At about the time Jones was trying to build a new company (music database firm Escient/Gracenote) back home again in Indiana, Kevin Bailey was in high school up the road in Zionsville.
Bailey didn’t know enough to care that the local tech climate lagged Boston; Austin, Texas; or Silicon Valley, Calif. Laid-up at home for a month after a motorbike injury, Bailey created a Dodge Viper-enthusiast website from which he made hundreds of dollars in ad revenue.
The entrepreneurial seed was planted. In 2006, Bailey and two high school chums who used to salivate over his ad revenue checks–Aaron Aders and Jeremy Dearringer–founded Slingshot SEO Inc.
The search engine optimization company this new generation founded now eclipses Jones’ ChaCha in sales. Bailey, however, is quick to credit Jones for offering advice over the years.
In fact, a veteran brain trust of earlier tech entrepreneurs like Jones is helping guide the new generation.
Last year, Bailey and his team tapped as their CEO Jay Love, who co-founded fundraising software firm eTapestry. They also brought in former Bluelock Inc. and Aprimo Inc. executive Don Kane as chief operating officer.
“These guys have been through the challenges that we’re going through right now. So it’s really cool when we have something that might’ve taken us four hours to talk through before, now we’re able to make a decision in 20 or 30 minutes of a conversation,” said Bailey, who remains Slingshot president.
Some observers say this newer generation is more audacious about launching businesses.
Decades ago, those launching their own tech businesses were a bit of an oddity, said Mark Hill, co-founder of banking software firm Baker Hill Corp. and now a principal of tech investment firm Collina Ventures LLC.
“Back then, people thought, ‘You can’t get a job? Is that why you’re going through it?’” Hill recalled.
Jeff Ready, who founded Indianapolis-based data storage hardware maker Scale Computing Inc., sees an uptick in college students who are ready to give their own tech firms a go.
Every year he goes back to his alma matter of Rose Hulman Institute of Technology in Terre Haute to speak at a class on entrepreneurship.
“The first question I always ask is, how many students are thinking about starting a company when they graduate. When I started doing this a long time ago now, I would be fortunate if one kid raised their hand. Now it’s typical that I will get six or seven of the students,” Ready said.
Elizabeth Hart-Wells, director of Purdue University’s Office of Technology Commercialization, has seen an increase in the number of students participating in commercialization of technology developed on campus.
“Not 10 or 20 percent but a hundred-percent increase over the last three years,” Hart said. “The number of students participating in that process is a very healthy trend.”
Students “are wanting to put their toe in the water in an environment that embraces entrepreneurship,” she added. “It’s really a knowledge generation, a new knowledge generation environment.”
In fact, students now come back to talk to her about how they started profitable ventures planned during her classes.
Such budding entrepreneurs were less likely to stick around here in the past.
In the mid-1990s, Scale Computing’s Ready created a company called Radiate, which helped put advertisements in computer games and in software.
“I had to leave Indianapolis because I couldn’t get funding,” he said. “I moved to Silicon Valley and got funding immediately. So, yeah, it’s come a long way. I did get funding here this time [for Scale].”
Mike Langellier, who founded locally based personal finance software firm MyJibe LLC, said the capital environment is improving. MyJibe was acquired last year by Money Desktop Inc. of Provo, Utah, barely a year after it was up and running.
Another resource emboldening the newer generation is the ability to network more easily. Groups like Verge Indy, which meets on a regular basis in a casual setting, have become popular places to present ideas.
The number of tech incubators, such as Developer Town, has also taken off. The tech organization TechPoint also conducts numerous seminars and gatherings as well as running the Orr Fellowship program that matches promising college grads with high-level tech firm executives (Langellier is the first Orr Fellow to start a company and take it through a sale).
“The rise of social networking makes connecting so much easier,” said John Wechsler, a Developer Town partner. “And this generation is certainly wired for that.”
“It used to be that you had to know someone who knew someone to get you in to meet a big muckety muck,” Wechsler said. “Now, those social connections are more visible, and that translates to more accessibility, to more investors, mentors, developers, designers and business people.”
Wechsler said new technologies, such as Ruby on Rails and mobile app generators, have made rapid prototyping and validation much easier than in the past.
“Today’s entrepreneurs can get their companies started in a fraction of the time and a fraction of the cost of their predecessors,” Wechsler added.
Those predecessors tended to focus on the business-to-business market, said Langellier. Those companies typically take longer to build and are more capital-intensive.
“So I think, true to that model, I wouldn’t expect to see a huge growth curve along those lines,” Langellier said.
That’s in contrast to the business-to-consumer market in some more established tech cities that have adopted a “win or fail fast” approach.
In other words, in places such as Silicon Valley, entrepreneurs often will go try something and if they fail, Jones said, “it’s OK, you’ll still get money and people later for something else. This concept of failing fast is not necessarily natural to Midwesterners.”
The local culture is getting there, “but we’re going to have to do that even more and encourage entrepreneurs who are willing to go out there and try something and if they do fail to know that they can get up and try again,” he added: “That’s just so critically important for our culture here in Indiana.”
Both generations agree about the need for a solid business plan. That, plus cash and talent are still fundamental whether in the bygone days of Commodore 64 or the Apple iPhone.
“The fundamentals haven’t changed,” Hill said. “I think there might be a perception that it’s easier to do today” he said of launching a successful tech company.
“This [newer] generation may have that sense…but it’s still tough.”
However, Hill said he likes what he’s seen in the new generation lapping at his heels. Many are smart and they have a ferocious work ethic, he said.
“As I work with them I’m confident in the future.”•