Building the Story of Success in Ohio
Ohio, (Not) the Midwest Silicon Valley
Ohio Innovation Fund had the privilege to speak in front of approximately 150 business professionals at a recent event with the Association for Corporate Growth, Columbus chapter. The topic was “Silicon Valley Mindset for Success in Ohio.” It’s an exciting time for venture capital in Ohio, as we are seeing the benefits of the investments from Ohio Third Frontier in the pipeline of companies ready for venture capital coming from our seed and seed plus-stage partners at TechGrowth Ohio, Rev1, CincyTech and Jumpstart.
“Ohio has the raw material for success, but lots of work to do.”- Bill Baumel
At the Ohio Innovation Fund, we can see Ohio’s path to success. This state has a strong workforce to tap into, and its interest in entrepreneurship continues to grow. One critical need is for Ohio’s deep network of major industries to further partner with Ohio start-ups with relevant technology and med tech solutions. Ohio’s many leading companies can provide insights and feedback on start-ups’ products, and serve as marquee customers and references that can help Ohio’s start-ups secure additional out-of-state customers.
A Beacon of Inspiration for Startups Across the Nation
Support from the state and other key stakeholders has been strong at the seed stage, but not at the venture capital stage, which has left many Ohio start-ups falling short of their potential. Without Ohio-based start-ups reaching their full potential and having successful exits, there is little motivation for out of state investors to focus on Ohio. Investors (Limited Partners) measure venture capital success based on a fund’s return, and thus will only invest in a VC firm with strong returns. Many have gone as far away as China and India, so they will come to Ohio if they know they can achieve solid venture returns here.
Another major and recurring challenge to Ohio companies fulfilling their potential, beyond capital, is changing the way that we view success. Success in the VC world means $10’s to $100’s of millions in revenue, and $100’s of millions to billions in exit value, not millions. It is this mindset that we are working to change, and it has profound implications on the quality of team that must be built as well as on the goals and plans that our companies have.
VC success is not easy. Our companies face an ever-evolving set of challenges.
OIF’s advice for any start-up:
- Make Sure There’s a Market: Understand your market. What compelling problem do you solve and where you are in the adoption cycle? A lot of time and money can be wasted on perceived market needs that are not critical or years away from being there.
- Be Honest About Customer Progress: Maintain a focus on moving deals through the pipeline. Focus on clients with pain points that your company can solve AND those that have a budget to implement a solution in the near-term.
- People Change Over Time: Understand that the people who created the company may need to take on different roles as the company scales over time, and the next level of leadership may need to be brought in.
- Focus on resolving the greatest barriers to growth: talent, key product features, target market/industry focus and such. For example, if your customer acquisition cycle is longer than you anticipated, you need to understand why. Is it the product? Is it the market? Is it the marketing message? Addressing the issue as quickly as possible will prevent months of missed opportunity. Every day in a start-up presents different challenges. Face them head on.
More Than Just Capital & Funding
As venture capitalists, we offer support by identifying barriers to growth and helping to mitigate and/or remove those barriers to growth. Part of our job is to look at a company objectively and see what our management teams may not see given the day to day operational grind. We offer support by staying focused on the big goals and providing insight and resources to achieve those goals. At the Ohio Innovation Fund, we are working to build the story of success for our Ohio companies.
For more information about Ohio Innovation Fund or advice on how your startup can take advantage of the lush entrepreneurial landscape of Ohio, contact us today.