 june 2000
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By Kevin FeatherlyNewsbytes - Think of it as a kind of domestic foreign-trade mission. A group of as many as 52 Minnesota high-tech start-ups, many of them from the dot-com and telecommunications fields, are planning a field trip to Silicon Valley en masse, with a plan to put themselves in the faces of venture capitalists whose money might help their start-ups turn the corner to business success in the New Economy. Although small businesses frequently make trips to the offices of the industry's money men to make their pitches, the idea of putting a large group of them out on a plane to do make their pitches all at once is rather unusual. The trip is being organized by NetSuds, a Minneapolis professionals' networking group that organizes regular social gatherings and "entrepreneurs breakfasts" for Twin Cities information technology executives.
In an e-mail to prospective participants, NetSuds CEO Matt Noah - himself an entrepreneur and a former ADC Telecommunications engineer - described his plan. "I have decided that we will take our entrepreneurs to Silicon Valley to tell the various Minnesota start-up stories to all who will listen," Noah wrote. "The project is under way. We will charter a large airplane, book a venue, accept sponsors and invite Silicon Valley venture capitalists to listen to the best of Minnesota startups." The event, not yet scheduled, is expected to take place sometime between June and September, said Tim Bates, project manager for Net Suds. Bates said the contingent will comprise a wide range of IT companies "that are pushing the edge of the new technologies." Most will be e-commerce or telecom start-ups, he said. "Right now we've had about 52 companies respond that they might want to be participants in the event," Bates said. "What we'll probably do is see who really wants to go and which ones are probably the best representatives of what they do. Basically we'll take them out for about three days and get them in front of all of the VC's that would be interested in hearing their stories." Robert Evans, a Twin Cities financial analyst with the Craig-Hallum Capital Group, was somewhat lukewarm to the idea, which he had not heard of until approached by a reporter. "I don't think VCs (venture capitalists) want to meet 50 people all at once," he said. But he also said the idea is somewhat intriguing, especially because of the role of a central organizing group like NetSuds. "I think it would be valuable if there is an organization that can be a contact, that can help companies prepare their business plans and come off professionally and maybe make introductions to the right people," Evans said. And that is exactly what NetSuds will do, said Bill James, president St. Paul, Minn.-based James Technologies, which runs the WebClerk.com e-commerce site, among other properties. James, who travels widely in his business and says he's never seen a trade mission like the NetSuds plan, is considering participation in the junket. The trip will result, in effect, in a social "mixer," the likes of which Silicon Valley sees every day or two - a place where California entrepreneurs with hot high-tech ideas can meet up socially with local VCs and angel-fund investors who are eager to latch on to the next big thing in IT. Minnesota's corporate community, being of a more button-down, workhorse mentality, simply hasn't acclimated to that kind of setting, James says. That has to change, he says. "What this is, is somebody saying, 'This is how you do this. This is how you put on your boutonniere,'" James said, laughing. "We're not very fluid here like that. We all sit on our own side of the room." He said, "I think what NetSuds (is) doing is saying, 'OK, let's create a churn. Let's create more of a mix where it's not so much who you know - because you're in a community, you can go in and get better access as a group.' I think it's a great idea." The notion, in part, says Bates, is to begin the process of putting Minnesota back on the high-tech map. The state - in decades past considered a high-tech hotbed as the home of such computer luminaries as Cray Research, Honeywell and Control Data - has lost its luster in the dot-com age. A recent editorial in the Minneapolis StarTribune lambasted Minnesota for being "smug too long" and letting the new economy's opportunities slip through the state's collective grasp. "That's part of what NetSuds is doing," Bates said, "bringing back this capability, getting more interest and revving up what has always been a strong IT and technical marketplace, putting back some of that leadership. Ten years ago, this was still perceived as a real strong marketplace. But given what's occurred in the last three years with the dot-com communities and just the amount of funding that's gone into it, we just haven't kept up." James said the trip would resemble a trade mission to a foreign country, and as such, has the advantage of oddity. Thus, he said, he firmly believes it would capture the attention of Silicon Valley. "I think anything that's got a different taste, a uniqueness, is going to be of curiosity there," he said. "I think it's a hot idea, and I think it's replicable. In a while it will be old hat, but for the first 10 times that it happens, it's going to draw a crowd." James thinks the junket will prove successful, and might spur other states to try the same strategy. But Minnesota's companies, he thinks, will have a leg up - if NetSuds truly does send the best of the best of Minnesota's start-ups out to the Valley. "If there are some really solid, put-together structures," James said, "I think California's going to look at this and say, 'Pretty interesting.'" The NetSuds group is online at http://www.netsuds.com/ Newsbytes.com www.newsbytes.com © Post-Newsweek Business Information, 2000. All rights reserved. iBiz |