JACOB SCHPOK EXECUTIVE DIRECTOR INDIANA OFFICE OF SMALL BUSINESS AND ENTREPRENEURSHIP STATE DIRECTOR INDIANA SMALL BUSINESS DEVELOPMENT CENTER Small Business and Economic Development

Agenda Why Support Small Businesses and Startups What Entrepreneurs “Look Like” What Entrepreneurs Want and What They Need Linking Entrepreneurs with Resources How To Grow Regional/Local Entrepreneurial Activities Additional Information Sources

Why Support Small Businesses and Startups

Why Support Small Businesses Workforce:  99.7% of U.S. employer firms  63% of net new private-sector jobs  48.5% of private-sector employment  42% of private-sector payroll  37% of high-tech employment  ≤ 5 year old companies produce two-thirds of the 40M new jobs seen by the American economy between 1980 and Production:  46% of private-sector output  98% of firms exporting goods  33% of exporting value Innovation:  Of high patenting firms (15 or more patents in a four-year period), small businesses produced 16x more patents per employee than large patenting firms.

Why Support Startup Activities

A Few States Indiana:.16% Minnesota:.16% Wisconsin:.17% Illinois:.2% Michigan:.29% Kentucky:.36% Ohio:.2% California:.4% Montana:.61% Alaska:.47% Texas:.32% National:.28%

Why Support Startup Activities

What Entrepreneurs “Look Like”

The Two Types of Entrepreneurs A Tale Of Two Entrepreneurs: Understanding Differences in the Types of Entrepreneurship in the Economy  Author: Martin Trust Center for MIT Entrepreneurship  Publisher: Kauffman Foundation The Two Types  Small and Medium Enterprises (SME)  Innovation Driven Enterprises (IDE)

The Two Types of Entrepreneurs

Labeling Entrepreneurs Social Entrepreneurship “Tech” Companies  Developing Technology  Leveraging Technology  Selling Through Technology Size and Growth Classifications  First Stage, Second Stage, Gazelle, Startups, Small Businesses, Mature Business, Independent Business

What Entrepreneurs Want and What They Need

The Anatomy of a Business Management Marketing Money

What Rookie Entrepreneurs Know To Be True Management  “I’m the right person to lead this business.” Marketing  “People want what I’m building.” Money  “The world undervalues my idea/business and isn’t giving me the lines of credit or investment dollars I need.”

What Seasoned Entrepreneurs Know To Be True Management  It’s about education and experience. Marketing  The market can best be understood through primary market research and trial and error. Money  Investing in my business is riskier than investing in Apple and Apple’s stock value increased over 40% last year

Who’s Sitting Across the Table? Rookie Entrepreneur will ask:  “How can you help me access capital” Veteran Entrepreneur will ask:  “How can you help me connect to new opportunities”

MANAGEMENT MARKET MONEY Linking Entrepreneurs with Resources

Management Motivation  Personal Motivation  Time/Energy Constraints  Personal Fitness Metaphor Education  Business Management  Financial Competency Skills  Mentorships  Peer Learning Experience

Market Market Analysis  Secondary Market Research Opening New Markets  Government Sales  Exporting  B2B

Bootstrapping Debt Financing Personal/Partner Income Friends and Family Non-Equity Crowdfunding  Passion  Perks  Participation  Pride Bank Loans/Lines of Credit SBA Guarantees Revolving Loan Funds Factoring Revenue Share Money

Equity Financing Government Incentives Angel Investors Equity Crownfunding  Entrepreneurs can raise up to $2 million and investors can invest up to $5,000 in a new start up opportunity. Small Business Innovative Research & Small Business Technology Transfer Grants (SBIR/STTR) IEDC Tax Incentives and Venture Capital Tax Credit Money

How To Grow Regional/Local Entrepreneurial Activities

Growing Entrepreneurship  Define What Success Looks Like (Outcomes):  5 of New Businesses on Mainstreet  100 of Employees Hired  2 High-Tech Business Launches  Grow the Revenue of 20 Existing Businesses by 20%  Don’t Act Like a Rookie Entrepreneur  Expand your connections to define the true market solution  Build, Measure, Learn, Build, Measure, Learn, Build, Measure, Learn, Build, Measure, Learn…  Launch with the most basic “product” to test the market.

Other Considerations  Acknowledge “Feeders” and “Leaders”  All Startups Need Space to Work  Engage High School and College Students  Understand Generational Priorities:  Traditionalists ( )  Baby Boomers( )  Gen Xs ( )  Millennials ( )

Additional Resources

For Your Reading Enjoyment  The Rainforest: The Secret to Building the Next Silicon Valley  Victor Hwang  Startup Communities: Building an Entrepreneurial Ecosystem in Your City  Brad Feld  Tale of Two Entrepreneurs: Understanding Differences in the Types of Entrepreneurship in the Economy (PDF)  Kauffman Foundation  The Power of Habit: Why We Do What We Do in Life and Business  Charles Duhigg  The Innovator's Dilemma: The Revolutionary Book That Will Change the Way You Do Business  Clayton Christensen  Founders at Work: Stories of Startups' Early Days  Jessica Livingston

Next Steps 1. Test Your Regional ISBDC   Meet and “interview” the private sector startup- champions in your community 3. Connect with the Indiana Small Business Ombudsman: Erik Scheub  

My Contact Information Jacob Schpok   Download this PowerPoint 