JumpStart: IdeaExchange Blog

Last week I was in San Francisco, where I had the chance to learn from and interact with a number of entrepreneurs, investors, and others in the West Coast entrepreneurial ecosystem. While I heard a number of valuable presentations and panels while there, there’s nothing quite like a punchy quote to grab your attention! Here are a few I found most intriguing, exciting, or otherwise out of the ordinary!

5. “I invest in 1 or more of the 7 deadly sins”, said Reid Hoffman, Founder and Chairman of LinkedIn, angel investor, and new venture capitalist at Greylock

His rationale: Sins matter to people! We care about them! We are passionate, emotional, seduced, irrational sometimes, about the “sins”. LinkedIn is all about greed. Obviously the big idea here was that the company’s product or service has got to be incredibly compelling to a big market of people, but I like to think it’s even bigger — that the best ideas are those which people literally will be unable to decline for both rational and emotional reasons.  

4. “This is the decade of the CMO (Chief Marketing Officer),” said Josh James, Founder and CEO of web analytics company Omniture (which went public and then was bought by Adobe for $1.8 billion)

Well, of course I wrote this one down! But aside from my personal interest, the backstory on the thinking was provocative. James suggested that the 1990s were about the CFO (ERP, cost management, installing financial discipline), the 2000s were about the CIO (IT, infrastructure, client servers, the internet), and now, the 2010s will be about the CMO. The opportunity that will define CMOs and separate the good from the bad — particularly for online marketing companies — will be customer experience. How does digital interactivity and optimization really enhance and improve the customer experience? How do companies take all the data that can be individually available (such as a person’s purchase behavior via web purchases, qualitative feedback through Twitter, number of Facebook connections, etc) and turn that into an unparalleled, brand new customer experience? Or, to make the idea more tangible — if I, the consumer, could tell you exactly what I like — what types of offers work for me, what my social networks are, how I use promotions, how I shop and purchase merchandise — how will you tailor your customer experience to me specifically?

3. “The work starts when we make the investment,” by Felda Hardymon, Senior Partner of Bessemer Venture Partners and professor at Harvard Business School

The meaning? Money is just the beginning of the value that an investor can bring to a company. I was struck by the fact that this was being said by an investor, as opposed to an entrepreneur (although certainly entrepreneurs would agree)! Investors see their role — in fact, hold themselves accountable — for creating value beyond just the money, and entrepreneurs who leverage their investors for knowledge, skills, and connections are wise.

2. “Biology is the science that will drive everything else in the future,” by Dr. John Hennessy, President of Stanford University

I was not familiar with Dr. Hennessy’s background but was immediately impressed with his street cred regarding areas of innovation and entrepreneurship. (As a quick summary, he has a PhD in computer science, used a sabbatical year to found a company which commercialized his research in processors, and is a board member at Google and Cisco Systems, among others). So it was especially interesting to hear from an accomplished IT academic and entrepreneur of his belief that the next area for innovation will be the application of technologies and science — IT, physics, and chemistry — to solutions which address medical challenges. Putting his money where his mouth is, Dr. Hennessy built an interdisciplinary research program called “BioX” (x = any of the sciences, fill-in-the-blank style) to encourage students and researchers from across the sciences, engineering, and IT to create collaborations and solve the world’s biggest biology-based challenges.

1. “Wow…congratulations…you should be extremely excited to have an exit right now,” by various people in California

Yes, this wasn’t a quote attributable to any one person, but it was a frequent comment I heard in reaction to the news that JumpStart Ventures portfolio was about to have an exit. JumpStart Ventures portfolio company DIY was acquired last week, generating positive IRR for JumpStart and representing our first exit. It’s a real milestone for our portfolio and demonstrates that the model we have been executing for the last five years can work. Congratulations to the JumpStart Ventures team, the DIY and Yardi teams, and thank you to our donors for their continued financial support over the last five years and in the years to come!

Cathy Belk is the Chief Marketing Officer of JumpStart. She specializes in branding, marketing communications, and business management. She brings 16+ years of experience in a variety of marketing and business roles, but gets her energy from working daily with entrepreneurs and their growing companies.

Two weeks ago in Columbus, 500+ venture capitalists, entrepreneurs, and government leaders gathered to hear about the accomplishments of The Ohio Capital Fund (OCF) and our State’s growing venture capital community. (For those of you not familiar, OCF provides incentives for investors from outside Ohio to invest in companies based here). Due to the work of many, including the OCF, the Ohio Department of Development, and all of the other members of the venture community - Ohio has earned some serious bragging rights! Among the many great accomplishments shared at the OCF Summit, here are some of the most compelling:

• 196 companies received $446 million in equity investment in 2008. Of this, 73 companies (37% ) and $259 million (55%) were from the Northeast Ohio region.
• Total investment dollars ranked Ohio as 13th in the U.S. for venture investing.
• Early-stage funding (which represents the type of dollars that would be invested in a company after a JumpStart Ventures investment) was up 67% from 2007 ($238 million in 2008), compared to a decrease nationally of 20%.
• Organized angels invested $45 million in 107 companies in 2008. I have to believe this is one of the top levels of investment and broadest reach of companies of the last decade, if not longer.

*Read the rest of the 2008 Ohio Venture Capital Report from Ohio State for the rest of the details

Relative to The Ohio Capital Fund itself, its success is also evident with these stats:

• The fund has invested $111 million in 21 funds, which have deployed that capital in over 35 companies.
• These companies receiving investment have created 1400 jobs, and not one of those jobs has gone away in the last 12+ months.

Some of the other information shared included the impact of Ohio Third Frontier, as reported by the Stanford Research Institute’s report released last month. Consider this data regarding VC investment in the state:

• Venture capital investing has grown over 13% per year over the last five years in Ohio, more than double the national rate of VC growth
• Total seed and early-stage VC has actually grown at 18% per year over the last five years

Ohio Third Frontier and the Ohio Capital Fund have played an instrumental role in this growth, but not the only role; this success is also due to the entrepreneurs of our region, who have identified the ideas, pursued their growth, and grown the businesses that are attractive and competitive investments for investors within and outside of the region.

John Dearborn is the Chief Development Officer of JumpStart and brings experience as an entrepreneur, founder and CEO at companies across the US and Europe over the last 25 years to the pursuit of economic transformation in Northeast Ohio.

A while back, our CEO, Ray Leach, wrote a blog regarding podcasts available from Stanford University concerning a wide range of topics for entrepreneurs. For those of you that follow Stanford University’s Entrepreneurship Corner podcasts, you know what a great find this site is. If you haven’t been there in a while or not heard of it, you should check it out.

Many times in my past life as an entrepreneur, I found myself incredibly close to the details of the business I founded. Needless to say, making payroll every two weeks when you’re bootstrapped has a way of keeping you focused!

Sometimes, it’s good to step back and take a look at some broad, strategic issues of a more general nature that can get you to think not only about the world at large, but may even bring a fresh perspective to your own business or situation. These great podcasts allow you to do just that and gives you really interesting perspectives from some of the world’s sharpest minds. For instance, check out the recent lectures from Microsoft’s CEO, Steve Ballmer. The following video podcast, titled “The Future of Microsoft, The Future of Technology,” really got me thinking and it just might get your wheels turning as well.

You may not agree with the almost-always-bombastic Mr. Ballmer, but you have to appreciate his zeal, even after all the years he’s been at it and with how many people want to take down his company!

John Dearborn is the Chief Development Officer of JumpStart and brings experience as an entrepreneur, founder and CEO at companies across the US and Europe over the last 25 years to the pursuit of economic transformation in Northeast Ohio.

I start many mornings each week with an elliptical workout that includes listening to podcasts to see what I can learn. One of the podcast series that I consistently listen to is the Entrepreneurial Thought Leaders series produced by Stanford’s University Entrepreneurship Center. Every week a new podcast is released of a recent lecture given at the University by incredible speakers - from successful entrepreneurs to big names in venture capital.

This week, the podcast titled “Retooling Early Stage Development” really made an impact on me, as Steve Blank comments on the illogic most venture-backed companies operate under versus really understanding the needs of the market and their initial customers.

All stakeholders of entrepreneurship can benefit from listening to the insightful people Stanford brings in to speak to their MBA students. These podcasts are not to be missed!

Ray Leach is CEO of JumpStart and brings his energy and leadership experiences from founding five high-growth entrepreneurial and intrapreneurial endeavors in the last 20 years. Ray is a Sloan Fellow and earned an MBA from the MIT Sloan School of Management. He also earned a BA in Finance from the University of Akron.