Accelerate This: Mentorships

Twelve weeks seems like plenty of time to complete a business task, unless that work is building a company from scratch.

For the four startups taking part in The eFactory’s business accelerator program, there are plenty of goals looming in late October: Nail the Demo Day pitch, earn paying customers and users, find investors for additional funding and, of course, put out a product. By design, these companies have some help. The accelerator’s lead mentors are embedded in different parts of Springfield’s business community, and they’re charged with coaching one of the businesses along the winding fast track to viability. But they only have a brief time to share knowledge.

“Time is of the essence,” said Cody Stringer, entrepreneurial specialist at Mercy Research and Development, who mentors The Daily Scholar. “You have to balance the time to meet often without taking too much time away from them growing their company.”

Stringer and the other three mentors, Danny Perches, Josh Holstein and Charlie Rosenbury, meet with the fledgling companies at least once a week – although since they are all working day jobs close to The eFactory, it’s oftentimes more than that.

“My responsibility is to be that constant source of feedback for them – challenging a lot of their ideas and having a different set of eyes looking at what they are exploring,” said Perches, coordinator of business assistance at the Springfield Area Chamber of Commerce, who mentors Mofin Labs. “For me, it’s a lot easier. They are the ones who are working 70 hours a week.”

Diving into the issues faced by companies trying to accelerate their growth, the mentors shared with Springfield Business Journal some of the challenges and best practices through which they’ve coached.
 
1. Paying customers
Stringer said a good startup builds a great product, but a great startup is good at getting paying customers.

“There’s a philosophy that the product is secondary to a company’s ability to gain customers and users,” Stringer said, adding that as The Daily Scholar crafts the third version of its learning engagement software, it will be increasingly important for the company to eventually break from the testing cycle.

Securing additional funding from investors is easier when the company has a track record of compelling customers to produce a revenue stream.

“I’m trying to push them on having a plan for conversion so they can get paying customers to validate the product,” Stringer added. “Having a future plan for converting those beta users and pilot users to paying customers is critical – and that’s something a lot of startups tend to fall down on.”

2. Growth hacking
With customers buying in to a company’s product, the next step is keeping them. That’s where growth hacking comes in.

“It’s one of those buzzwords that the startup community is so fond of,” said Charlie Rosenbury of Self Interactive, Eagle Speak’s mentor who recently presented on the topic. “It’s focused purely on acquiring and retaining users.”

Rosenbury said retention is geared toward grassroots efforts, such as incentivizing users who have dropped off with a coupon or discount.

For Shopzeely’s model dependent on growing a paying customer base and a roster of personal shoppers to do the legwork similar to Uber, Rosenbury said the company could budget for in-house purchases on the app to keep the latter segment engaged.

“They identified the need to onboard some shoppers and get them some experience so they have buy-in, and maybe it’s worth spending 150 bucks to establish that relationship,” Rosenbury said. “That’s not sustainable, but early on when you’re trying to build a base, it’s a good time to think about making those decisions.”

3. Scaling success
For an app like Shopzeely’s based on getting customers what they want when they want it, the quick route to revenue might be served by a shotgun approach to reach everyone. CellARide LLC CEO and Chairman Josh Holstein, however, advises the Dallas-Fort Worth transplants to not do all the heavy lifting. Instead, by sticking to their target demographics, they can find the business-to-business connections – such as Simon Malls – that can then help with reach.

The other trick is minimizing the app’s issues at launch. It requires testing, but Holstein said a company can’t be afraid to pull the trigger. “Every app development company has done it – they put out a version 1.0 or a version 1.1,” Holstein said. “You’re never going to have it perfect the first time, so you’re always iterating and cleaning things up. Get it to where it’s user friendly and people want to use it over and over again. That’s the main thing.”

4. Knowledgeable networking
As a connection to the business community, no company in the accelerator might be more in need of the chamber’s Perches than Mofin Labs – they did, after all, form roughly two weeks prior to the start of the program. Perches, however, thinks the company already is dialed in to its market.

“One of their key strengths is knowing who their client is – they are really aware of the industry,” Perches said, referencing CEO Eric Ham’s background in financial data centers and Chief Technology Officer Josh Willis’ software development. “They do a great job of communicating with those partners, really honing in on what they might benefit from.”

Still, Perches is helping Mofin Labs and the other three companies make the all-important local connections. Some, he said, are intrinsic to their location near downtown and IDEA Commons. Other interactions with the chamber and Springfield Business Development Corp. boards are good for keeping Springfield’s business stalwarts engaged with budding entrepreneurism.

“Exposure to partners and the general public is probably what any small company struggles with the most,” Perches said. “The advice I’m giving them is take advantage of all the resources the program is bringing, whether it’s the presenters or the people they meet in the community. There are a lot of people who want them to grow and stay in Springfield.”