crawdad1313

Hey Matt,

It seems like you are getting more worked up about this than is warranted. Nobody is trying to pick a fight with you. In fact, we all admire what you are doing with PedalBrain and we all wish you nothing but complete success. We feel like every startup in Minnesota that "makes it" puts us one step closer to our goal.

Now, to answer your question: I am not an investor right now. I hope to be able to do that someday, but I don't feel that I am financially savvy enough to hold my own in a highly technical conversation about the minutiae of financial terms within a complicated deal structure. I am a sales and marketing guy with a talent for picking winners, but that doesn't necessarily mean that I am a pure numbers guy, so VC's and angels who have been doing this for a long time would eat my lunch.

With that said, I have done viability analysis on hundreds of ideas, inventions and discoveries, on behalf of dozens of local investors, as well as having been a contract strategy consultant for the U of MN's Office for technology Commercialization; helping them figure out the commercial prospects for IP coming out of university-born-research. Also, I currently am privileged to have some of the most prominent, business-savvy investors in town support my company. So I continue to learn and hope to be able to jump into the angel investment side of things at a point when I don't feel like I am going to get chewed up in the process.

I am part of team who built the Project Skyway selection process, I see every application that comes in and I will play a role in deciding who gets funded. So, I can play a role in helping worth early-stage tech companies get seed-funding in that way as well.

Casey and I have also leveraged our personal networks, to ensure the participation of some rock-star investors, from both coasts as well as the Midwest so that, should our companies agree with you, that they would be better off somewhere else, they will at least have been exposed to investors from other parts of the country.

Bugsy,

First point: Then don't apply.

Second point - Read... Then read some more. Do a little research on what you get when you are accepted by an accelerator. We are not fortunate enough to have a benefactor like Yuri Milner who is blind betting on an entire system (yet), but then neither are the companies we will fund. We fall directly in line with what most other accelerators invest.

Third and most important point: It's not really about the money. I think if you asked folks who had successfully started, built and exited from an early stage company, if they would give up between 6%-9% to be able to "accelerate their personal and business development; get expert legal advice; learn how to build decent financial models; learn how to build and manage a team; get their software built; get to work closely with and get exposed to hundreds of investors... they would say "absolutely" at least they would if they were smart.

Plus, most accelerators bring in investors to help companies learn how to write a good investor pitch, build a strong case for their business and present themselves in a way that investors feel comfortable with. The they turn around and listen to the pitches from companies that they helped mold. The advantage of this model is too obvious to require elaboration.

Eel was right when speaking of the REAL benefits.

Unfortunately, we haven't done a very good job communicating who our "Captains" (mentors, advisors, investors and friends) are. There will be a more detailed list of mentors and investors on the site shortly, but I assure you that we have the chops and the connections to make the Project Skyway experience a a worthwhile endeavor for early stage tech companies.

So, forget about the $6k. It is there to get you through three months; to pay your cell bill; buy groceries and keep you from having to supplement your income to a degree that you can't focus on your company, your customers, your products and your personal development. It is there to help you become the full-time, balls-out, "Go Big or Go Home" entrepreneur that you will have to be in order to be successful.

It actually is "a thing" now...or at least it is for us (Project Skyway).

We definitely questioned ourselves as to why we might want to include something like this. In the end, we feel it is a proxy for one's dedication to develop one's network. Certainly it is not the only measure by which one could reasonably judge someone's ability to have become involved in a community and it may not even be the right one, but social networking is a valuable asset and is a tool upon which many of us rely as part of an overall strategy to forward our business' goals.

Plus, because we don't have a crystal ball into which we can peer to ascertain the kinds of networks and organizations our founders have chosen to become involved with, this gives us some information that we might otherwise not be able to get. In the end though, this is just one small piece of a bigger puzzle that we are trying to construct which will ultimately tell us a lot about the people that we will be working with and giving money to.

Project Skyway is about the people, more than just the idea, because people run companies; people succeed or fail; and people are the most valuable asset (or the greatest liability) in any early stage company. We are looking for kick-ass PEOPLE with kick-ass ideas because without one, the other doesn't matter.

Matt,

I'm not sure that I agree with you, for a number of reasons, but I cannot completely discount everything you say either. The idea that, because it is more difficult to build a software/web/mobile company in the Midwest; more difficult to get funded; and more difficult to become successful holds as much fiction as it does truth. And your assertion that, as you put it, we "are left funding founders not dedicated enough to their startups to move and give their startups the best chance." is kind of silly and naïve.

On a couple of different occasions I have heard you speak about the challenges you face in getting your company off the ground, and your product built. (most recently a couple of months ago at Bootstrapper’s Breakfast at Maria’s Cafe) and I understand your frustration. I was even there the night you originally pitched it, at MinneBar. And I don’t even disagree that the Twin Cities will probably never become a clone of Silicon Valley ($20... Inside Joke). But having lived there, I can honestly say, from the bottom of my heart... Thank God for that!

I know that this is a completely unfair, anecdotal example, but I have a company that I started last August, in the Twin Cities, got funded and is now on the precipice of becoming another wildly successful, Minnesota-based, early-stage tech company. It isn’t impossible, but it also probably isn’t as easy as it would be if I had a similar-sized network somewhere near the 101 corridor. However, that is kind of the point. It is absolutely ridiculous to think that I could simply jump on the BART from SFO, plant myself in the Tenderloin, haul my cookies down to 2750 Sand Hill Road and start begging for money from folks who have never heard of me. My network, the thing that is the real lifeblood of every successful accelerator, is here; my family is here, my home is here, and there are plenty of other reasons for me not to drop everything and go west, but they have nothing to do with a lack of commitment. In fact, I lived THERE for a while and chose to come back here to start my first company, to get away from some of the negative things that I felt weren’t conducive to my success. Since then, I have started, built and successfully exited from a couple of different companies, so I know it can be done.

There are SO MANY people here in the Midwest, for whom the Dream of Silicon Valley is so strong, that they think the streets of Palo Alto are littered with $50 million term sheets, where entrepreneurs get to keep 90% of the company they started 2 weeks ago. Most of the local "entrepreneurs" that have this terminal case of "SV Envy," have never even been there. (and usually have only talked about starting a company) The thing that we in the Midwest don’t seem to grasp is that good companies get funded and succeed, no matter where they are. There is not a higher rate of success, per-company-started, in SV, there are just many, many more started, so it is natural for folks to see the great number of successes as a sign that there are fewer failures. That is a fallacy.

After all, it would be ludicrous to think that a kid from Pittsburg, who had gone to Northwestern to study music, then dropped out of grad school to build a start-up in, of all god-awful places, Chicago, could make it work. It would be a certifiable miracle, if that company raised $165 million from VC’s in Silicon Valley (and Moscow), hired more than 1,000 people and turned down $6.5 BILLION from Google, because they figured they could make a lot more by waiting to do an IPO.

I guess the way I look at it, NOT having some of the "advantages" that you spoke of could be looked at another way. Perhaps the folks who stay in the Midwest, or (gasp) actually migrate TO the Midwest, see that this IS a different kind of place; though not necessarily better. But, it is the kind of place that, if you leverage your network; bust your ass; and ignore all the people who say it can’t (or shouldn’t) be done; spawns companies that will be around for a long time, create jobs, create wealth and create community pride. And, because we freely acknowledge that it IS definitely harder to raise money here than some other places, we need something like Project Skyway to help fund and mentor folks, so that we can build our own startup Mecca (or at least a place that isn’t repellent to early stage companies.) One thing we can definitely agree on though, the Twin Cities will never look or feel anything like SV.

As for the differences that have been pointed out between what we are doing with Project Skyway and what others are doing; we aren’t trying to be exactly like other accelerators, because we have a different set of issues facing us and we also bring different strengths. Cem Erdem is funding this with his own money and his vision and instincts, (along with mine) tell us we are heading in the right direction. Time will tell if we, like any early-stage company, have to pivot and try something different, but for now we are excited about what we have built so far.

In fact, we love YC, TechStars and all of the rest of the accelerators that have come before us, and we look forward to joining them in building an amazing nationwide, or even global, entrepreneurial ecosystem. No observer in one of our Project Skyway planning meetings (including me), has ever heard Cem, Casey or anyone else say anything but complimentary things about other accelerators, their founders, or their graduates. In fact, I think we can all agree that we likely wouldn’t be doing what we are doing, if it weren’t for them blazing a wide trail. There is something we can learn from all of them and we have done our best to do so.

However, we happen to believe that there is more than one way to support, inspire and help give life to early-stage companies and we are taking a slightly different course. In truth, there are far more ways that accelerators and the entrepreneurs who seek their support are similar, than there are differences. It is true that we do not REQUIRE a technical co-founder, but then there is no evidence that the single-most important component to building a successful tech company is having a founder who can sit down and code all night. In fact, there are plenty of reasonable arguments in support of both approaches and there are plenty of horror stories that provide ample anecdotal evidence for both as well. In the same vein, there is no rule that says that I cannot be just as successful as someone in another part of the country, so I choose to build my company here, where I have a strong foundation, a supportive network of other entrepreneurs and where there is plenty of money available to me to build a company that will change the world. And if, for some reason, I find that things are not as I believe them to be, I will take your advice and start hammering AngelList. But I didn’t see anything on their site about me having to be within 20 miles of an ocean.

We at Project Skyway are confident in our approach and in our ability to provide many of the critical elements that lead to building successful, sustainable, companies and, for the most part, those elements are derivative of the direction that the accelerators that have come before us have provided.

In the end, there is no magic bullet; no perfect solution; no supernatural zip code and no single formula that will make every early-stage company an unmitigated success. Regardless of how far we’ve come in the past 12 years to further our understanding of what specific kinds of resources evolve to create the best ROI for founders, investors, employees and communities, building early-stage tech companies is still akin to being a 19th century settler getting ready to cross the Mississippi River and head West; Great Potential - Poor Maps; But it is still worth the effort!

This is a long time coming. Project Skyway has the coolest selection process ever for an accelerator plus they don't require a technical co-founder because they are providing every single team 2 full-time developers.