Who wouldn’t want to be Steve Jobs or Earl Bakken, build their Apple and Medtronic startups in the garage and become unicorns in their industries?
But in a day and age when founders have to sell themselves more than ever — on social media, in front of investors, pitching to clients — running a startup isn’t as romantic as it may seem, even when your business is successful. And only about half of businesses that started in Minnesota in 2013 were still active five years later, according to data from the Bureau of Labor Statistics.
However, entrepreneurship is a challenge that more and more people are facing in the Twin Cities. Business formations at the height of a decade. San Francisco Startup Genome, a policy and research organization, has ranked Minneapolis-St. Paul ranks fourth in his list of the world’s 100 Best Startup Ecosystems and second in the United States after Detroit.
Take, for example, Georgia Fort, who got into business for herself because it had her best chance of staying in journalism in the Twin Cities. Or Elise Asch, who started a company because she saw a way to support infertile couples the way her family did.
Even when you’re successful, it’s hard and risky to constantly push your vision — especially when you’re young.
“You hear about contracts or funding rounds, but you don’t hear about layoffs and stress,” said Stephanie Rich, head of platform at Bread & Butter Ventures, a Minneapolis venture capital firm. “For every win, there is a struggle to get there.”
When Ash started Fruitful Fertility, a free matching counseling network for couples with reproductive problems, the business took off. The St. Paul resident has raised thousands of dollars in capital from angel investors as more than 6,000 people have started using the platform.
In the process, she’s become somewhat of a darling in the local startup scene – featured on industry boards, praised for her innovations, and being named a rising female entrepreneur.
Then the pandemic hit, hitting scratches in her business model. The company was dissolved in 2021, and 75% of the investors’ money was returned.
“It was like, ‘If I’m not that person, then who am I?'” she said. “
Ultimately, Ash decided to stay in the entrepreneurial environment but by working at Cloudburst, a Minneapolis-based technology and development services company for startups.
Its common experience. Most entrepreneurs succeed after many trials and errors, due to unexpected economic changes, evolving business models or the skepticism of naysayers and skeptics.
Reed Robinson — who now invests in startups in Minnesota through his early-stage investment firm, Groove Capital, and former head of startup BetaMN — knows firsthand the uphill battle that entrepreneurs face.
In 2011, when he was 27, with a fresh MBA in hand, Robinson and his partners founded Heroic, a marketplace that lets homeowners share recommendations of local service providers. The company building process was high.
Being an entrepreneur, he said, is “a disease, and I don’t mean that in a negative way.”
Over the course of 18 months, Reed and his partners built the website while raising nearly $200,000 from investors.
Then the business began to collapse. Investors have proposed new ideas and business models, and the co-founders are starting to move in too many directions. Eventually, the enthusiasm waned and the company dissolved in 2013. But not before a rival company was sued.
“You want to adapt to the market based on what you learn, but if it’s too flexible and changes over time, people lose track of who you are and what you’re doing and you might not give yourself the time needed for the customer or market to understand who you are and why you’re different,” Robinson said.
I think I caught a bubble
Jeremy Segal started his Proozy cut apparel and equipment business as Lyons Golf as a teenager. The idea has always been to find a market for clothing and equipment.
At first it was brick and mortar stores. Then, at the age of twenty, he began persuading clothing makers who had always sold to department stores to diversify some merchandise and sell them online.
“I think I caught a bubble before it happened,” said Segal, 37. “They never understood that these kinds of quantities could be sold online.”
A few years later, it was sold to customers using Amazon or Groupon.
Segal said he then made another big decision in 2015 — and it wasn’t a common one. He decided that Proozy needed to create a direct-to-consumer website.
“No one liked the decision because we already have a huge company on Amazon,” he said. “The only way to build a business on a large scale is to do it on our own site, with our clients.”
But again, this hub has allowed the Eagan-based business to grow. Seagal said she now has 100 employees and by the end of 2023 will have sales of $120 million.
Confidence has managed to take great risks and stand by your decisions in favor of Seagal, but that doesn’t mean it was easy, especially when he was 20 and crossed the table from people two to three times his age.
Take advantage of change
Atef Seddiqi, co-founder and CEO of the Minneapolis-based fintech subsidiary, can speak. He was working for Time Warner in Los Angeles when he felt like doing more than just observing how smartphones are changing the way people run their lives.
“I’ve seen these big paradigm shifts,” he said. “I wanted to be able to take advantage of some of these shifts.”
At 28, my friend started his first tech company, and sold it less than two years after it was created. Then he fired and sold another.
He had some solid experience when he set up a branch in 2015. However, he got involved with the startup accelerator in Minneapolis — and realized that the best way to grow his new company was to move it to the Twin Cities. This company also took a long-term commitment to build, carefully adding new services that would attract even larger clients.
The branch allows businesses to expedite payments to their employees or receive tips digitally. It also now offers a no-fee bank account through partnership and debit cards.
So far, Siddiqui has raised $133 million from investors as the branch continues to build a customer base that now numbers 400, including Uber Freights and Walmart’s delivery platform Spark.
Like Segal with Proozy, though, my friend had to develop a strong backbone because it not only changed the way people were paid, but disrupted the pay cycle.
“We’ve challenged the status quo in terms of what it means to get paid and when,” my friend said.
“Here’s the scheme.”
Branch has competitors in space. So does radio journalist Fort, who is developing a model for storytelling on social media.
Fort Blck Press started in August 2020 after applying for broadcast jobs across the Twin Cities and getting none of them. She had experience and had confidence that people wanted to see her stories.
Fort, 34, started her own business to stay in journalism, but found the freedom to build a company that reflected her values as a racially biased woman who wanted to tell stories about the black community. She also wants her company to be more equitable.
You can publish your texts in a way that is original to you and your culture and does not correspond to the AP [Stylebook of] “Normal English,” she said. “You can wear your hair the way it grows naturally from your head and be in front of the camera and not have your superiors tell you it’s a violation of your contract, and here’s how to do it. That’s the scheme.”
In the process, her team found all kinds of ways to get creative. Sometimes a picture tells the story. Sometimes, the video is raw. Sometimes it’s more like a TV news clip. She now has nearly 200,000 followers on channels like Facebook and TikTok.
In the first year, I worked on a tight budget, having won some grants. She thought she had to create an entirely new business model because she had created a news business on social media and admits she wasted time doing it. In the end, I settled on a similar sponsorship/subscription model for newspapers and magazines and also wanted to build a financial model for sharing stories with traditional TV outlets and getting paid for them, rather than the stations’ independent work.
The somewhat organized chaos of the first few years gave Fort and her team a seat at a table with sources. “He. She [also] It has given me the confidence to grow the next generation of freelance journalists and I say the game has changed.”