By Corrine Casanova
I interviewed Eric Madison for this story on July 25 as he was headed to Las Vegas for two weeks as he typically did each month to work at StartUpNV in the southern portion of the state. Because of Eric’s untimely death on August 19 I would like to share with our readers my interview in Q&A format.
Here’s a little background:
With hubs in Las Vegas and Reno, StartUpNV is a non-profit 501(c)3 and is Nevada’s only state-wide business incubator. They are also connected to Small Business Development Centers located throughout rural Nevada. StartUpNV provides resources and education, including start-up office spaces, highly experienced and connected mentors, access to capital—and proven methods to help Nevada based start-ups be successful. They currently have 17 start-ups in the program.
CC: What’s the typical success rate of start-ups?
EM: About 90 to 95 percent of start-ups fail within the first three years. When there is a business incubator involved, that fail rate goes down to about 60 percent.
CC: Why is that?
EM: Start-ups get help and support to all aspects of their business at business incubators. The founders will get access to mentors and their staff will get access to people that will help them in their job. You will also have access to start-ups that may be doing similar but different things and you will work with them. For example, if I’m a product company and I need a website, there might be a website company that can do the work for you for a discount and that collaboration piece will help out a lot.
CC: Does collaboration happen naturally?
EM: It does. Of course there is a culture to every incubator so you have to make sure you breed a culture of collaboration. Each month we have a dinner for our start-ups and they are required to come. And each month we talk about something different. You kind of have to force them in the beginning to have that collaboration but once they establish it, it is kind of organic.
CC: Do you have a mission statement or core values that you’d like to share?
EM: Yes. First, fostering an entrepreneurship culture of collaboration. Second, attracting and retaining talent in Nevada which is a big problem. We don’t want all the smart kids going across the border. And lastly, creating Nevada as an entrepreneurially friendly state. On paper it seems to be but the culture is not quite there for Nevada. I think there is not an issue of urgency in this state. For example, if you go to California, it’s different. People are working really hard and fast. Here, if we give start-ups a list of things they need to do in 90 days and check back in 60 days, they could say, “I haven’t even started.” In Silicon Valley, I did seven start-ups in 10 years. Jeff Saling, Bob Susskind and I are all from Silicon Valley. We come in with that fast paced culture in mind. Sometimes we get pushback from some of the old boy’s network. My comment to them is, “Work with us, but don’t work against us because we will steamroll you.”
CC: How does the Innevation Center tie in with StartUpNV?
EM: It provides co-working and meeting space for our StartUpNV clients. There are 11 locations throughout Nevada with Las Vegas and Reno being our formal hubs. Reno is powered by UNR and Las Vegas is powered by SWITCH. The Innevation Center in Las Vegas is expanding in Technology Park. We will have about 50,000 square feet of office space. It’s like we will be our own city. StartUpNV is the incubator for UNLV. My fourth co-founder of StartUpNV is Zach Miles. He is the associate vice president for economic develop at UNLV. If you know of Mridul Gautam at UNR, he’s the Mridul of UNLV. He is now a board member representing UNLV.
CC: How often do you travel between Las Vegas and Reno?
EM: I am in Vegas the first two weeks of each month. So far this year I’ve taken 17 trips back and forth.
CC: I’ve noticed there is an intense rivalry or even dislike between UNR and UNLV. How do you manage working with both?
EM: It’s one of those things where there was some initial pushback from UNR because of our relationship with UNLV. However, the Innevation Center has been really nice to us. We have good relationships with faculty members on campus but not with UNR as a whole. But once we start incubating successful startups for UNLV and Reno, UNR is going to go, “Okay, at this point we are the odd man out.”
CC: How does the economy help or hinder startups?
EM: There are two aspects to it. Innovation in a recession time is really high because when a lot of people aren’t working they have time to think of new ideas. Now getting funded can be a problem though. A lot of Silicon Valley big names were started during the recession. They had to be creative about how they built their business model. For example, in the software industry, apps were invented where people could try them out for free. Features were added to create a premium model which people could purchase for a fee if they chose to do so. That all came out during the recession because people weren’t buying apps. Essentially, invention comes out of necessity. If I don’t have a job and I can’t find a job then I have to create my own job. When there are bad economic times, good businesses get started out.
CC: What does the pitch process look like for potential start-ups?
EM: Everybody that comes to talk to us starts out by pitching. I don’t care if we know you or don’t know you or you have a company that just needs help. You sit in a room at the Innevation Center either here or in Las Vegas on a Monday or Wednesday afternoon and you pitch your company or idea and we give you feedback. It takes about 45 minutes.
CC: Is it like Shark Tank?
EM: We all sit on this side, they sit on that side of conference table. We spend about five minutes explaining what an incubator is, what services we provide and ask them, “Why are you here today?” And the answer better not be looking for money because entrepreneurs often assume money will fix every problem they have. But I would say over 80 percent of them aren’t far enough along to attract investors yet. Our role is to get them to a certain point where they can attract investors.
CC: Tell me about this 90 day process that you use with start-ups.
EM: Every 90 days the start-up comes back and pitches for their spot. At this point we rank them on the startup feasibility index. We rank them on five things:
- Team
- Product
- Market
- Competition
- Customers
We look at their knowledge and ability to execute. So, you might have a great product idea but you don’t know how to build it. Your knowledge of the product is high but your ability to execute is low. We are looking for both knowledge and ability to execute. We create a graph which shows where their weak points and strong points are and that shows us what we can focus on.
CC: As Reno continues to expand with start-ups, is there anything that concerns you about that?
EM: The infrastructure. SWITCH is going to bring 3,000 jobs the area but where are these employees going to live? They are coming from Silicon Valley and probably aren’t going to want to live in Dayton or other outlying areas. They are going to want to live in Reno/Sparks and what’s the infrastructure for that like? Nobody wants to talk much about this.
To learn more, visit starupnv.org.
