Local entrepreneurs growing successful startups say the process is fraught with challenges, but also replete with rewards. And, they say, that Albuquerque, despite its limitations, brings certain advantages. Here’s a brief look at what entrepreneurs say it takes to scale up a local startup.
Molly Cernicek, CEO of SportXast, a platform for capturing video highlights of athletes, says it is vitally important that the process starts with “an idea that resonates.”
“You have to see if you talk to 20 people, how many will say, ‘Wow, that’s really interesting; that’s a good idea’,” Cernicek said. “Because you are always going to have to be getting people to have a positive reaction to what you’re doing — whether it’s the very beginning of an idea to when you build the product.”
In 2013, Cernicek and her team jump-started the development of SportXast by winning the Santa Fe Startup Weekend. The Santa Fe Startup Weekend is a 54-hour event that brings together developers and entrepreneurs to pitch ideas and build real products.
According to Cernicek, once a product has resonated with other people, taking an idea to a “startup weekend” event is a good next step in seeing how the idea competes with others.
“There’s just more and more opportunities to go to some sort of event that’s focused on entrepreneurship and that’s where you begin networking and talking to people about your idea and start seeing if it resonates,” Cernicek said.
ABQ ID, Creative Startup Accelerator, and Start-Up Santa Fe are some notable accelerator organizations that provide opportunities for local entrepreneurs.
Building a product
As entrepreneurs turn ideas into real, physical products, they begin creating business models, finding possible customers, and seeking financial backing through investors.
“MVP, which is a minimal viable product, is basically the simplest product you can make, that solves the problem,” said Nick Williams, director of information systems for Albuquerque-based startup company, Sunport. “You want the first version to be totally simple and totally focused on the problem you are solving.”
In 2012, Williams went to the first Startup Weekend in New Mexico and met Paul Droege, who had the idea for Sunport. The idea, according to Williams, was still abstract and they needed to make the product something physical and tangible before people would understand. The result is Sunport, a small adapter that plugs into an outlet providing solar power wherever you go. It works by measuring the level of electricity you take from any outlet and automatically upgrades it to solar power using solar credits.
“I see a lot of other startups that are trying to go with this spaghetti strategy where you throw stuff against the wall and see what sticks,” Williams said. “That doesn’t work. You have to go out there in Albuquerque and talk to just a few people and keep doing it until you really understand what kind of person wants your product and what the value is of your product.”
Power of collaboration
Williams, who also serves as executive director of Catalyst Week, a local event to promote entrepreneurship, says that joining forces with other people is how startup companies become a real thing.
Cernicek said this type of collaboration requires proactive leadership.
“As somebody who gets a market, you need somebody to be able to build your product,” Cernicek said. “It’s rare that one person can build a company and yet right now in New Mexico overwhelmingly that is the model that you’re seeing.”
Proactive thinking is what allows entrepreneurs to meet new people, form teams, and get their idea moving, she said.
“You can be a solid engineer, but if you don’t have somebody who can create a business model and start building and finding customers, you’re never going to get anywhere, and vice versa,” Cernicek said.
Having a customer base
Finding that customer base can be a core challenge, according to Cernicek. It requires talking to early customers and finding out what they really want. This leads to a marketing plan. Getting a product noticed by the public is always a hard thing to do, she says, given how “noisy” markets can be, she said.
“No matter what, you have to be able to physically interact with early customers. Everybody hopes for this magical viral effect with whatever you’re doing, but in reality, that viral effect always has people behind it. If you want to expand somewhere else in the country, you have to put a body on the ground,” Cernicek said
Keys to success
According to Cerineck, there are four key areas that need focus for your startup to be successful. These include being able to hire expertise that your company will need; having an early customer base; finding investors in your immediate environment and discovering a mentorship network that offers local help, but also reaches beyond your location.
Taking advantage of location
Local leaders say if New Mexico wants to grow as a startup community, it needs to find more and easier ways to bring investment capital.
“New Mexico doesn’t have as easy access to capital, but at the same time our cost of living is really low,” Williams said.
Williams said that there are ways to get around the lack of wealthy investors in New Mexico.
“There’s an intentional strategy in Albuquerque to follow the ‘startup communities framework.’ Part of that is fostering this community and fostering this ability for collaboration. The entrepreneurial thing to do is to be resourceful, to be lean, and to figure out a way to do it where you don’t actually need much money.”
Cernicek said Albuquerque still has its advantages, which includes affordability.
“I think if you have a business to business startup, and you have a solid network, there’s a lot of advantages to being in New Mexico,” Cernicek said. “If you can recruit people into your company from elsewhere who are really well qualified, you don’t have to pay them the wages that you’re paying somewhere else.”
Julia Jones, the social director of Sunport, says the more your product relates to the community and cultures within it, the more support you will receive. “If people are investing in the startups that are here, they have to love and understand the culture that New Mexico has to offer.”
Jones and Williams combined forces to promote the startup community in New Mexico, saying it starts and ends with collaboration.
“I find that it’s the entrepreneurs helping other entrepreneurs. They’re the ones that are leading the efforts and creating these events that could help accelerate and create that ultimate startup community,” Jones said.
“It’s vibrant,” Williams said. “There are people out there who are willing to help other people and we’re all in it together.”
Making it national
Taking a startup product to the national scale is usually the main goal when entrepreneurs start companies.
“If you want to get big customers on board, find another region, find another city, and start working it and that includes putting bodies on the ground, Cernicek said. “That means travel, that means more expenses in sales and marketing to go get these bigger customers, and that means figuring out a different geography and how that works.” This kind of growth for a company is good, but costly.
According to Jones, company representatives have to prove there is a market for the new product.
“As an entrepreneur, no one else is going to make you do it, you have to get out there and do it.”