The State of Entrepreneurial Affairs
Young Columbia Businesses Make Names For Themselves
Nearly a dozen young businesspeople representing Columbia’s current entrepreneurial class sat down for the spring CEO Roundtable at the Broadway Hotel. Each is in the throes of developing, launching or day-to-day operation of a startup, and they all have unique yet somehow similar stories to tell. ||| The recent State of the Union Address from President Donald Trump hung in the air and provided a jumping off point for the day’s conversation. An entrepreneur himself, Inside Columbia Publisher Fred Parry asks about the current state of entrepreneurial affairs in Columbia.
The Current Climate
Coming from Kansas City, Collin Bunch, the entrepreneurship coordinator for Regional Economic Development Inc. (REDI), is excited about Columbia’s current state of affairs of its entrepreneurship environment.
“Even two years ago, it would be hard to have this [round table meeting] maybe,” Bunch says. “There’s a higher number of quality startups and entrepreneurs out in the community, getting help, doing things, being successful than even a few years ago. And, people getting investment outside the community, finding ways to make it work, it’s hard to even keep up with now.”
Nic Parks, CEO of The Pinball Company and one of the “oldest” entrepreneurs at the table (his company has been around for 11 years), admits his business was somewhat covert until he became more involved locally.
“Early on, I wasn’t very connected because I was in the internet business, not selling much in the community,” Parks says.
“Certain people found me and bought machines from us, but since we were involved with Laser Lanes and the arcade, and now with Silverball downtown, we’re more connected.
“I’m impressed by the amount of entrepreneurship in Columbia. I think we’re on this growth track,” Parks says. “People are being inspired by other mentors, like Brant [Bukowski] doing so well at VU. Tyson’s sort of doing is thing — we can have a successful brewing company here in Columbia. There’s nothing that we can’t do in Columbia. I see some big market companies coming out of COMO.”
Parks admits retail storefronts can be challenging in Columbia, but a business can be successful if it finds the right spot. “I don’t think any business is easy to turn into a success,” he says. In areas of St. Louis where Parks grew up, business and residential are mixed in many areas, which isn’t the norm in Columbia, except for in select spots like Cherry Hill.
There is also frustration connected to zoning, affordable access to commercial land.
“Right now, most of the land zoned commercial is owned by a few people,” Parks says. “So if you want to go build a commercial building, you have to go through the battle of trying to get the zoning changed if it’s residential, or you deal with those players that have already bought up everything. So, as we grow, hopefully the city will plan areas that people are open minded to zoning changes.”
Josh Kayser, who founded SuretyBonds.com in 2009, agrees with Parks. “It is tough, and it is controlled by seemingly a small group of people,” Kayser says. “We’ve been very fortunate in that when we did go out and shop for rentals, I had personal connections who threw me a bone and locked me into a really nice, favorable long-term contract.”
When Kayser started his company nine years ago, he says, the startup environment in Columbia and around the country was bleak, but the economy has improved and students coming out of Mizzou are encouraged to be entrepreneurs instead of joining the workforce immediately.
“There is another way, and the other way could be striking out on your own,” Kayser says. “It doesn’t take that much effort seemingly to be able to pay your rent and get things done when you’re young. So, start that journey when you’re young because it feels and looks different when you’re 32 years old with three children at home.
“Money seems to be pretty easy and pretty cheap the last couple of years, and the terms are very favorable for entrepreneurs,” he continues. “I don’t know if that will always be the case. It’s nice to see people actually strike when it’s hot in that regard. The city has done a pretty good job of funneling public money into things like REDI and different programs.”
For Michael Urban, founder of Harold’s Doughnuts, being part of a startup wasn’t top of mind when he graduated from Mizzou in 2005. He worked with entrepreneurial minds like Brent Beshore at Adventur.es and Wade Foster, founder of Zapier, now making a name in the Silicon Valley. It was companies like Veterans United and Brant Bukowsky and other mentors who started to rise up who influenced Urban’s decision to jump in.
“It’s been a dramatic turn from what I can tell in a retail business like mine,” Urban says. “It’s been an amazing place to get started in my space because so many individuals, no matter what company or industry you’re from, are open to collaboration, are open to trying to figure out ways to innovate and sell more of each other products. … I’m not sure how much of that was going on between food businesses or otherwise, before say 2010.”
Startup Weekend Columbia is another place these entrepreneurs have found mentors. Alex Winkler, CEO of Kolu, an app that links travelers with local tour guides, met one of his mentors there, Cam Kashani, the godmother of Silicon Beach.
“She’s in Los Angeles,” Winkler says. “She wanted to come out to Columbia because she’d heard good things about it and had never been.”
Having REDI’s Innovation Hub and mentors has also helped. “That’s been a really big thing for me and this community,” Winkler adds.
On the flipside, funding has been more challenging for Winkler’s tech startup. “…with the brick and mortar, they see it. They feel it. But with an idea that needs to be conceptualized, they don’t have that vision.” Kolu received small grants from I-CORPS and Bringing Up Business Week. Beyond that, Winkler went to 20 different people in the community seeking funding. He got a lot of “no’s” before getting his first big break in Seattle. Investors understanding his challenges, listening and empathizing have been elusive, and he hopes that will change but is unsure of what that might look like.
Harold’s Doughnuts uses Zapier, the aforementioned software engineering company started by Wade Foster, to facilitate its delivery system, Urban says. “He’s still a champion of Columbia. He still comes back to Startup Weekend every year. Then again, that recognition — he’s talking about Columbia, Missouri, in the valley and that matters a great deal. He was born and raised in Jeff City went to Mizzou.” Foster was in a software engineering company, a really small one called Ideaworks, he says, went to VU just for a year, then had an idea at Startup Weekend, and they won.
Bunch reminds the group that while you can’t fix the investment challenge overnight, companies still have to be good. They have to make money. “You can’t just pitch some cool idea. It has to have value,” he says. “So you have something like Zapier or Kolu, where once they get to other cities, it’s ‘Oh, this amazing. You already have customers? The thing’s already working?’ Usually people pitch us with an idea and a PowerPoint, so it doesn’t help you in the moment, but I see how it works out over time.”
Failure to secure funding isn’t always a bad thing, Winkler says. “That’s been said multiple times: It is good to fail. We learn that. Maybe one of the reasons why we weren’t getting funding is we weren’t ready. That’s something that every entrepreneur has to deal with as well even though it’s hard in the moment.”
Brooke Bartlett co-owns a small gourmet popcorn business, GoPo, and sees another advantage the Columbia community provides through events like the True/False Film Festival, Art in the Park and Roots N Blues N BBQ. “Those three events really help small businesses in those off seasons. Fall is a really busy time for a lot of businesses. February is not. It also gives you chance to sponsor, get your name out there. It also brings in this whole other amount of people from outside of the city … those things have really put Columbia on the map and make us really different from St. Louis or Kansas City.”
Referring back to Startup Weekend, Bea Doheny, a senior at Mizzou who launched her own astronomy-inspired jewelry line Astronobeads when she was a sophomore, loves that the community gets engaged. At the “Shark Tank” event, three startups were awarded funding and one other was invited back.
“I took Bill Turpin’s Investing in Startups class at Mizzou last semester,” Doheny says. “My classmates and I broke into groups and did due diligence behind the local companies that applied for the MIC Accelerator Fund. It was so interesting to be on the flipside of the investment process.”
One of those Startup Weekend-winning companies, Roo Storage (formerly Stor) was awarded $25,000. This Airbnb-for-storage was founded by second-year MBA student Eric Laurent. Laurent took Turpin’s class, too.
“It was just so cool to see college students being more involved in the investment and startup world,” Laurent says. The turnout for the first-time “Shark Tank”-esque event also impressed him. “With all of the entrepreneurs, there might be a hundred people show up, but it was a packed house. That was really cool and encouraging to see how the community got so involved and so interested and supportive of new, brand new startups trying to make a name and get their first round of funding.
“I do have to say, … Bill Turpin (one of the founders of Netscape) has been a doing great job at transforming the way people think and also making tech more relevant within Columbia,” Laurent adds.
Assets and Detractors
With investment capital not as easy to come by, the young entrepreneurs around the table point out other attributes that make Columbia appealing.
Laurent offers collaboration. Collaboration in the local community is especially important among entrepreneurs. “Being ultra-supportive and open to collaborating with other startups can be beneficial to both to find common ground, like storage and bracelets, or storage and beer, maybe traveling and beer, or loans,” he says. “Regardless of what you’re doing, there is always some way to collaborate. That’s probably a big factor that in Columbia we’re ultra-supportive of other entrepreneurs. We want to encourage other entrepreneurs to be successful, because in the end, it’s really their success that will help our success because Columbia becomes more relevant.”
“The youth in this city, just naturally with the university, is something that is incredibly fueling to the outside economy,” says Drew Rogers, founder of Relevant Youth, a student-run creative ideation agency working with small businesses to help with digital needs. “I’m a huge advocate for investing, not just money but attention and resources … wisdom into the student mind and into the student communities, because the interest of entrepreneurship is so high. … There is such an interest here that if we can invest, whatever that looks like, into students, [it will increase] the likelihood that they will want to stay in this city. Relevant Youth is a recruiting tool, too, so that companies can get to know the best and brightest at Mizzou.”
Tyson Hunt, co-founder of Logboat Brewing, piggybacks on Rogers’ comment and adds another layer of concern to keeping emerging talent local. “Columbia has the highest cost of living of any city in the state of Missouri,” he says. “A lot of that is because of housing. There’s not a lot of affordable housing for people that are taking a risk starting a business, and there isn’t a lot of affordable space to occupy to start a business. Access to affordable spaces is very limited. The idea of investing in starting a business while also trying to buy a house to perhaps support a family is daunting without having a lot of entry-level houses for sale, and apartment rents are skyrocketing. It’s a big problem that the city and we as a community have to address sooner than later if we want to retain all of the talent that’s coming out of our colleges here.”
“Tyson nailed it,” says Kayser. “We’ve gone through cycles and we’ve been around for nine years now. When I started out and hired recent graduates about my age, a lot of those people are gone. They went to St. Louis or Kansas City, and we really had to change the kind of people we hire. We generally want to see some sort of connection to Columbia.” When employees start thinking about the next chapter in their life and starting a family or purchasing a home, the first-time-buyer options previously selling for $150,000 are closer to $250,000. Due to high new construction costs imposed by the city, developers are struggling to fill that demand, making St. Louis, with its more affordable housing, more appealing, Kayser adds. They have started recruiting from Columbia’s bedroom communities, like Holts Summit, Boonville and the Highway 63 corridor for “people who have established roots there. So, the longevity has been much greater.”
Bartlett says people were shocked when they put their GoPo kitchen in Fulton, Missouri, instead of Columbia. They keep their retail focus on Columbia and partner with local outlets because of expenses. “In Columbia downtown, it would cost me three grand to rent the same size space I’m renting for under a grand in Fulton,” she says. She bought a house in Fulton as well.
“If you look at the target market in Columbia, we have, it’s fair to say, there’s a very high college age face. It really dips off between 30 and 50. Then, we have quite a few elderly and retired in the community, too,” says Dustin Stanton, co-owner of Stanton Brothers Eggs, the largest free-range egg producer in the country. “We’re kind of becoming known on both ends of the spectrum. Look at Lenoir Woods, as they continue to expand every single year. We have it really good on the older end of the age spectrum as well as the younger end, but it’s that piece in between where we’re missing the connection. People come here; they go to school here, and they leave, and that’s kind of when you need people. That’s when you need them to spend money here locally as they grow their families rather than moving away.”
“When my wife went to school here,” Bunch says, “literally no one stayed. I think VU, Influence and Co, Surety Bonds, there are legit pathways to stay here now. It seems like it’s gotten better.”
“It’s absolutely changed,” Kayser says. “Our entry-level positions, we’ve started to pay 20 to 30 percent more just because the landscape’s changed, because VU now hires twice as many people as they did, and everyone’s kind of had to up the bar. It costs more to live here. So to incentivize people to live here, you have to pay higher wages, and that’s tough on a startup because once you get past the ‘everyone’s a co-founder stage, your biggest expense is almost always your people.”
In terms of courting companies that might have interest in investing in Columbia entrepreneurism, investment ideas varied.
“Some kind of fund for really early small amounts tied to being some kind of program or milestones,” Bunch says. A $3,000 award for attending a four-week camp on customer validation, for example, to provide incentive to achieve that next step and garner other investment funds or loans.
Kind of an incubator on steroids almost, just at a very early start.
“I’d go back further,” Hunt chimes in. “I think we’ve got to start way earlier. We’re missing a lot of talent in our local high schools, and I don’t think we put enough focus on the public education side before we get to the university or Stephens or Columbia College or even Moberly Area Community College. Education is the key. … I think there could be some awesome focus around entrepreneurship, but before you even get to that, we should continually invest in education and training on some of the soft skills that are really hard to teach: Respect, hard work, punctuality, emotional intelligence, manners, how to find a sense of purpose. I always look to education. It’s kind of my first go to.”
But more than grades, drive is important. “I would say 4.0 students make the worst entrepreneurs,” Bunch says. When he worked in Blue Springs, Missouri, the entrepreneurial community was non-existent. He worked through high school and middle school students and then the parents of kids, surpassing them in a lot of ways and filtering out.
“That education also includes this whole idea of risk,” Urban says. Despite the high statistic of startups that fail, there needs to be a way to overcome the notion that you’re going to lose everything. When success stories emerge, you’ll hear about what it takes to succeed.
“There are a lot of romantic ideas out there that when you get into it all,” he continues, “it never is part of that idea that you first started with — the grit, the determination, the tenacity, the showing up on time, the every day, 365 — all of us around this table have no days, or just no time, for that. But you don’t understand that when you think of the idea. … Sometimes I think people get pushed to the corner, and not do it because they’re being told is a bad idea. But it could be the greatest thing, could be the next Facebook.”
Doheny agrees. “Being a student entrepreneur, it’s the ultimate learning experience. It’s definitely risky and nerve-racking at the beginning, but I wouldn’t change it for the world after just diving in.” Even more exciting is the evolution she sees happening at Mizzou, as entrepreneurship is stepping beyond the business school to include departments across campus according to their expertise.
What you don’t learn in an academic setting is just as important however, Laurent says. “… in the current education system you’re learning mostly about businesses that have already been created and problems they are facing within a billion-dollar company. … But it doesn’t really teach you much about the different stages of business. In the beginning, if you have an idea, what do you do? Where do you start? And … executing and producing the idea and coming up to launch, then what happens on launch? How do you create scalability? How do you expand? At every different phase of the business you’re encountering completely different problems.”
For Urban, once you’ve identified your mission and worked through those growing pains, every entrepreneur should be looking for “what’s next.”
“They really should be working on something else to grow in the future and do really well,” he says. As an example, he looks at Harold’s as a technology company as it goes forward. If they work to streamline the online ordering process and get all of the components in place to make that process flawless, “That’s how we win. That’s how we build a big company over a number of years.”
Urban got his start in tech, so it’s easy for him to visualize, he says. If a business person has mentors and advisors who can help them think beyond their current business and suggest ways in which it can scale up and increase market share, “You can be here in Columbia, but you can ship your product to Miami or wherever than your market is now. Oh my gosh, you just expanded it by an infinite sum.
“You start to see that vision; you start to see why this makes sense, why you’re continuing to do it,” Urban says. “There’s quite a lot of untapped potential in businesses here today that just may think they’re in the business of selling a widget, but really their business is something completely different while they sell those things.”
Bringing the conversation back to investing, Bartlett feels that if someone had a large sum of money they were looking to invest, the brick-and-mortar businesses downtown would be worthy recipients.
“What draws people to Columbia is the downtown. … There are lots of different personalities, so invest back into those people who are taking the risk in the brick-and-mortar and putting money into the downtown,” Bartlett says. Making funds available to businesses in the District would be a way to say, “ ‘Thanks for sticking around for two years and sticking it out. Here’s a few grand for you to start investing in more technology. … We want you here. We believe in you. Stay.’ And even though it’s a small amount of money, for a business I feel like just the District saying, ‘We see you. We want to help you.’ is really big.”
“When I see the downtown, I see that as the college basis,” Stanton says. “If we’re trying to get that middle area — 30 to 50 or 60 — you’re trying to find that core population that you want to keep here, I think more family-oriented things is what we need, like the Roots N Blues, as well as to focus on that early life and early child development with our education system, I agree with that.
“The system we have right now is very much teaching kids to be dependent. They want the teacher to tell you what to do. Do this by this date, etc.,” Stanton continues, “and by the time you get out of Mizzou, if you choose to go there, that’s kind of what you’ve been taught. We need to rewind to be more independent in that system too.”
The role the university plays is undeniable and unavoidable, for better or worse.
“We are a college town,” Parks says. “It’s a transient town that way. I went to St. Louis and came back to my college town to build my business because I can grow my business anywhere. That’s just something that we’ll have to deal with, that transitionary space.
“If you look at all of the apartment complexes downtown, what are they? That’s student housing. If you look at most metropolitan areas, they didn’t start as metropolitan areas. Some of them have nice colleges, and I’ve visited some of these places but you still have downtown office buildings. You have downtown residential areas, things for people who are not the college students,” Parks adds. If he were in development, he says, he would be looking at building a combination office/residential downtown place because he and my wife would have loved to spend time downtown as younger professionals before they had children.
While he pines for more options on commercial and residential space, he cautions to be careful what you wish for. The higher cost of living in Columbia is hopefully an indicator of better available housing and higher wages, “because you don’t want to be Detroit. You don’t want to just build dirt cheap houses that will fall down if we have high winds.” But he is quick to point out other cities with higher costs of living typically have those other valuable amenities, like housing and office space options.
The disconnect, Parks says, comes when we have students graduating and we’d like them to stay in Columbia and make a life. “Somehow we have to find a way of generating some affordable housing to keep that talent here in transition.”
He also adds that more consideration might be given to building a school in which entrepreneurism is the degree. “You go to high school then you go to college. You do that for four years, and then hopefully you get a job, versus entrepreneurism as a real career track. We need to educate people on that, and it doesn’t take four years,” Parks says. “Maybe there’s enough people who would pay, parents who would pay for an education. So how do we get access to student loan money to use for entrepreneurial education?”
The university culture has its benefit to the entrepreneur though, as Stanton sees it. “As an entrepreneur, it’s great. You need the people. That’s students coming to town that financially invest in our community. That’s a good thing,” he says. “I notice a big difference between May to August when they’re not here. I really do. Anybody would say that in the city, but on the on the flipside of that as a student going there, I agree. I felt when I was going through, it was almost looked down upon — if you don’t get a job in a big city or elsewhere. I noticed that the career fairs pushed you to get a job in Indianapolis or New York and L.A. the entire time, and there was never that connectivity to the local city. Mizzou is a big staple here, and there should be more connection with the city and Mizzou, and more of a friendly atmosphere that if you stay here you can still be successful.”