Economy & Innovation Rundown: Imagination And Startups
On Friday, Arch Grants announced the finalists for its 2014 Arch Grants Business Plan Competition. The field has been whittled down to 46 entrepreneurs. Twenty of those finalists will win $50,000 each along with business support services to help them launch amazing businesses. In exchange for winning, they have to locate, or relocate, to St. Louis for at least a year.
We’ll be following that story when the winners are announced, but a really thoughtful article popped up in Techli offering advice for the 26 firms that will not be recipients of the Arch Grants awards.
The article’s author, Matt Menietti, first explains where he is coming from: Not only have his own start-up efforts been rejected by venture capital firms, but his day job entails evaluating business proposals and accepting or rejecting them. Then, he sums up his advice in three cogent points:
- Don’t burn bridges with a potential investor. You never know to whom they are connected and, who knows, you might still find your way back into their pipeline sooner than you think. Leaving a bad conversation like this with any funder isn’t likely going to end well.
- Don’t blame other people for not understanding your business. Take it as an opportunity to retell your story. To frame it in a different way. To communicate it more effectively. Simplify, simplify, simplify.
- Thank them for the opportunity and keep them engaged. You can tell a lot about founders by how they deal with rejection. Thank potential funders; ask for feedback. Keep connections in the loop (monthly updates about traction, news articles, strategic partners, etc). Hold your head high and move on.
Good advice for rejection in almost any situation.
Our startup culture: a reality check
While St. Louis has certainly been boosting (and boasting about) the number of startups it has, theSt. Louis Post Dispatch’s David Nicklaus had an sobering column this week that could put our enthusiasm in check.
Across the state, Nicklaus writes, entrepreneurial activity has been falling. The Kansas City-based Kauffman Foundation’s annual index of entrepreneurial activity ranked Missouri 35th for 2013, down from 18th in 2012. Nicklaus suggests that the drop is indicative of Missourians' risk-averse attitudes, saying they would rather find 9-to-5 jobs than “hang out their shingles as entrepreneurs.”
Maybe. And maybe that’s true in some parts of the state, but it’s hard to ignore the $380 million in start-up capital raised last year in the St. Louis region — a figure that compares favorably to cities like Cleveland and Pittsburgh.
Also, the rate of entrepreneurial activity has slowed nationwide. The Kauffman report considers the dip a sign of improving economic conditions.
Imagination run amok?
Once upon a time…well, it wasn’t a fairy tale. There once was a time when St. Louis was a Big City. More than 850,000 people lived in the city at its peak in 1950. That’s just in the city itself, according to the U.S. Census.
But since then, the city has been losing population at a fairly steady rate; and it is now hovering below 320,000. St. Louis Mayor Francis Slay, sees the population decline not as a problem but as a challenge. And he plans to address this challenge with a thought experiment: Imagine the city with a population of 500,000 people.
No, he doesn’t mean that if we all think about it hard enough, we can will the city to grow to 500,000 people.
In his blog, Slay explains that architect Dan Jay has been “checking in with a widening circle of thinkers around town,” and asking them what the city would look like with a population of 500,000 people. They are exploring the idea of what it would mean to neighborhoods, to resources and to geography if the city added 200,000 people to it.
To address the question of how to increase the population, Slay suggests immigration and people having more babies. But what’s interesting to me about the thought experiment is the why question. Why 500,000? Why not dream big and go for 1 million? Why not be realistic and imagine adding just 5,000 people? Slay’s explanation:
“A half-million people citywide is within shouting distance of the St. Louis city’s density sweet spot. It is a reasonable point to start a conversation. It represents, generally, a higher density than our suburban neighbors. It encourages urban amenities such as street retail, public transit, shared roads, and housing diversity that a region's urban core should have. “
You can engage in the thought experiment with Slay and architect Dan Jay on Thursday when they both will join Don Marsh on St. Louis on the Air.
A less expensive rite of passage
Finally, in this week’s Rundown, we have a glimmer of sanity returning to the human race. People are spending less on high school proms than they used to.
The Kansas City Star reports that some families have finally realized that the high school prom is a dance for teenagers. As a result, the pomp and glitz that once meant parents spending well over $1,000 on dresses, limousines, flowers, hotel rooms and whatever else kids do for their proms is going down.
The article turned to a report issued by Visa, which found that prom spending dropped 14 percent from 2012 to 2013. In the Midwest, the average amount spent on proms was $835.
As someone who never went to prom herself, that still seems like a lot of money. Not that I’m bitter. Because even though prom holds a special place in our hearts, most people summarize their own prom experience in one word: awkward (according to an informal survey of public media people).