Sunday, 19th November 2017

TechBreakfast Fuels Entrepreneur Ecosystem

Posted on 01. May, 2013 by in Blogs

Image of the TechBreakfast Logo

While a number of initiatives designed to foster a vibrant statup ecosystem have launched in the past couple of years, TechBreakfast stands out has having achieved real momentum. Founded by ‘parallel’ entrepreneur Ron Schmelzer, the Meetup began in 2011 with 10 people sitting around a table in Baltimore. Since then TechBreakfast has grown to more than 2,300 registered members and monthly Meetups in Baltimore, MD; Columbia, MD; Washington, DC; Northern Virginia; and most recently, Philadelphia.

The group’s growth rate demonstrates how much this area needs a venue for sharing ideas in a pitch-free environment. Assuming a constant growth rate of more than 200 new registrants per month, TechBreakfast will have more than 4,000 members by year-end. My bet is that there will be a lot more members given Schmelzer’s plans to add bring TechBreakfast to New York, NY; Boston, MA; Austin, TX, and Silicon Valley in the near term… and up to 40 cities longer-term.

Image of TechBreakfastWhat? Silicon Valley? That’s right. Even though the Valley is renown for being the nation’s mover and shaker when it comes to entrepreneurship, Schmelzer believes TechBreakfast can add something vital to the mix by creating a venue for peer-to-peer sharing locally and from different regions of the country.

If you’re a founder, just imagine what it would mean to have the opportunity to present in one of these other locales and gain exposure to their expertise. Suddenly, you’ve got what’s happened at TechBreakfast here—the cross-discipline, cross-jurisdiction synergy occurring on a national scale. And that’s one of the important differences between TechBreakfast and a number of these other initiatives.

Show And Tell for Adults

Schmelzer started TechBreakfast a few years after moving to Baltimore because he missed the energy of the entrepreneurial scene he had experienced in Boston.

“There’s a lot of tech going on in this area, but it’s diffused and the communities don’t talk to each other,” he notes. “It’s not as easy to get your hands around the ecosystem as it was in Boston, and geography is a contributing factor. Moreover, there’s a serendipity factor in Boston because different industries, technologies, and people are all on top of each other. Density creates random collisions among people, which in turn, creates opportunity. I started this morning meetup because I wanted to see what my peers were doing.”

TechBreakfast is not an opportunity to pitch. It uses a show and tell format so that techies, developers, designers, and entrepreneurs can share and learn from their peers. People often stay after the event to connect. While professional service providers, angels, or venture capitalists also attend, the focus remains on sharing information freely across a wide variety of disciplines and bringing a broad spectrum of experience (from newbies to been there, done that many times) in one venue.

Sparks in Search of Tinder

After speaking with Schmelzer, it’s clear he is invested in establishing an entrepreneurial ecosystem and support structure appropriate for each locale rather than trying to transplant a number of Silicon Valley replicas across the nation.

“You can’t make a fire without tinder. The tinder’s the ecosystem. Each entrepreneur is a spark. Our region has a lot of great sparks. We need to get a little dry material and blow on the flame to make something happen. If we pull all of the pieces together, I think this region can boom,” says Schmelzer. “But we have to change the way we do things in order to make it happen.”

East Coast Vs. West Coast

Although we’ve previously covered the difference between East and West Coast, Schmelzer has a succinct way of cutting to the core of the differences.

“The biggest difference is in investment philosophy and mindset.”

Much of the venture capital in Silicon Valley comes from people who have started companies, had successful exits, and now repeatedly give back by investing in and mentoring other entrepreneurs. While these people may not have market experience relevant to their new investments, they know what it takes for a company to go through its lifecycle from inception to acquisition or IPO. These investors evaluate startups’ potential based on personal experience. They expect entrepreneurs to fail and are less inclined to invest unless a founder has failed at least once.

Image of TechBreakfast show and tellIn contrast, investors across our region typically have experience managing financial portfolios. So, while they may have deep pockets, these VCs evaluate investment opportunities from a much more conservative perspective. Those who do not have entrepreneurial experience tend to make vastly different decisions. For example, if you haven’t had a prior success, then many local angels and venture capitalists are unlikely to take a serious look at your company.

The difference in philosophy really shouldn’t come as a surprise. When you think about the transition in business philosophy that has occurred recently, we know that companies require a different set of strengths and skills as they go through their lifecycles. We also know that people who thrive in startups and those who thrive in established companies rarely feel comfortable (or even competent) in the other environment. The same phenomenon likely applies to investors. They just don’t seem to know it yet.

Basis for A New Funding Model

Schmelzer has given a great deal of thought about changing the model. “Cities and states realize how important startups are to the economy. If applied differently, government seed funds could go a lot further. Organizations like CIT Gap Funds and the Propel Baltimore Fund tend to follow the same path as the local venture capitalists. What if we changed the model?”

“These funds are put in the position of picking winners and losers before there’s enough evidence to improve the odds of success,” says Schmelzer. “That’s a very risky bet. In essence, these funds are adding a bit a lighter fluid to a handful of sparks. The flame grows hot for these few, but it goes out because there’s no tinder to catch fire when the companies have exhausted the seed funds. The investment doesn’t generate new jobs or tax revenues if these companies fail.”

Schmelzer proposes that we have an opportunity to adopt a different funding model.

Imagine if a state or city invested $5M to $10M in an ecosystem designed to benefit a larger number of new ventures? Investments could provide a wide spectrum of shared resources to qualifying companies—from free office space to a pool of developers, grant writers, and professional service providers.

Distributing funds differently changes the game from supporting a few, select companies with relatively low likelihood of success to a much, much larger community of startups. Sharing resources, creativity, intelligence, innovation, and experience across technical disciplines also increases the likelihood of long-term viability for participating companies.

Business As Usual Doesn’t Work

As noted in the opening, there are a number of initiatives seeking to develop a robust infrastructure that will support a healthy entrepreneur ecosystem throughout this region. Each of these organizations offers something to the community and should continue to push their initiatives forward (and combine efforts in some instances). That said, TechBreakfast is different. It has a unique energy that is drawing critical mass in a way most other groups have not.

TechBreakfast isn’t just for startups. It’s for all of us who want a healthy local innovation economy. We need to change the dynamics of how we look at doing business. While there’s no obligation for entrepreneurs who have had a successful exit or any of us to give back, it is the only way we’re going to truly refuel DC, Maryland, and Virginia economies. I urge you to get involved as a presenter, as a mentor, or simply as a member of this quickly growing community.

Next week we’ll look at Day of Foster.ly. Founded by Adam Zuckerman, Foster.ly is another resource that is gaining its own critical mass in our startup community.

Post By Marcia Moran (314 Posts)

Marcia Moran

Marcia Moran

Marcia Moran helps organizations reimagine what’s possible and provides the framework for clients to achieve stellar, long-term results.

As a Performance Architect, Marcia uses the principles discovered through neuroleadership and positive psychology to deliberately design the employee experience and corporate culture. Blended with pragmatic systems design, these elements free people to play to their strengths while reducing strife in the workplace. As a result, people can push beyond their known limits as individuals, as teams, and as companies.

Marcia is also the Vice President of Marketing for Intelishift, a colocation company with operations in Ashburn, VA and Silicon Valley. Prior to moving to the Metro DC area, she worked as a business consultant for Up ‘N Running and advised startups and small businesses in the areas of management, operations, and marketing.

Marcia earned an MBA from Chapman University. She loves to travel, speaks Norwegian, and unwinds by kayaking and painting landscapes. Marcia recently co-founded Positive Business DC with Shannon Polly and Donna Hemmert. Positive Business DC provides resources to help people increase the levels of well-being in the workplace and at home.

Website: → Performance Architect

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