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MN2020 - Discussion: The Role of Startup Companies in Minnesota
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Discussion: The Role of Startup Companies in Minnesota

September 09, 2014 By Deb Balzer, Communications Director

More than 50,000 new businesses were registered with the state last year, according to Minnesota Secretary of State Mark Ritchie. That’s the third largest number of new businesses ever recorded. It’s what Ritchie calls part of Minnesota’s healthy entrepreneurial spirit.

It’s that spirit that brings together aspiring business owners for the first Twin Cities Startup Week. Organizers are inviting budding entrepreneurs and innovators seeking strategic advice, resources and networking opportunities to join in a series of 20 events across the metro.

What is the role startup companies play, and can play, in Minnesota’s economic development?

Joining us today to talk about the role these startups play in our state economy, and their potential for economic development is Justin M.C. Porter of the University of Minnesota Venture Center.

Sidenote: The Startup Week kicks off this evening with a Beta.MN 1.5 gathering which describes its events as “place for entrepreneurs, hackers, artists, investors, teachers and students to get to know each other in a comfortable, agenda-less setting.” 

 

 Post your comments or questions in the box below, scroll down to see the ongoing conversation, and use "refresh" to see new comments.

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20 Comments:

  • Rachel says:

    September 9, 2014 at 6:27 am

    Good morning! Justin will be joining us at 8 am. Before then, please take a minute to share your experiences with startups in Minnesota.

    What policies in MN do you think foster (or hinder) entrepreneurship?

  • Justin Porter says:

    September 9, 2014 at 8:00 am

    Good Morning Everyone,

    I am excited to be here and talk about startups in Minnesota!

  • Steve Fletcher says:

    September 9, 2014 at 8:05 am

    Justin - thanks for joining us.  There was a Star Tribune piece (http://www.startribune.com/business/274229281.html) that expressed some real skepticism about whether the Twin Cities has the infrastructure and support to be a good place for tech startups.  Is there a startup scene here?  Can entrepreneurs find support to develop ideas without moving to Silicon Valley?

    • Justin Porter says:

      September 9, 2014 at 8:15 am

      There is absolutely a startup scene in the Twin Cities!

      One way the community is showcasing what the Twin Cities has to offer is through Twin Cities Startup Week (twincitiesstartupweek.com). You will see a whole host of events to connect people in and outside the region to the new startups that are being created.

      If you want to see some great data, visit TECHdotMN’s data tab (http://tech.mn/directory/). On this page, you will find investors, startups, and organizations that serve the startup community.

      Another indicator there is a strong startup scene is that the Minnesota Angel Tax Credit (http://mn.gov/deed/business/financing-business/tax-credits/angel-tax-credit/) has been full utilized each year and this year it was used up for this calendar year in 3 months.

  • Deb Balzer says:

    September 9, 2014 at 8:09 am

    Good morning Justin and thanks for joining us.

    We are hearing about startups this week with the kickoff of Twin Cities Startup Week. Can you give us some insight on on the startup community here in Minnesota. Specifically, what type of startups are we seeing?

    • Justin Porter says:

      September 9, 2014 at 8:29 am

      Historically, Minnesota has been the epicenter for medtech startups. This makes sense with organizations like St. Jude, Boston Scientific, Mayo and Medtronic (which spun out of the U of MN).

      In addition to medtech, there is a groundswell of IT startups (web and mobile apps) in Minnesota. Minnestar (http://minnestar.org), which is a non-profit I am affiliated with, is one of the organizations in town that brings together people to an event called MinneDemo. MinneDemo is a “geek show and tell” that brings together a few hundred people a few times a year to see these new tech startups. Note that there is an event this Thursday as part of Twin Cities Startup Week.

      Our group at the U of MN launched a record number of 15 startups this past year. The make-up of those startups include, life sciences, agriculture, software, and physical sciences.

      The short answer is there is quite a breadth and depth of startups in Minnesota!

  • Steve Fletcher says:

    September 9, 2014 at 8:23 am

    We spend a lot of time thinking about job creation, and policies that encourage job growth. A lot of those conversations tend to steer toward attracting established companies that hire a lot of people, or taking on huge projects (like a stadium or a train line) that create LOTS of jobs.  What role do startups play in the jobs economy locally?  Are tech startup jobs good jobs?  Are we just talking about a few people or is this a potentially significant part of our economy?

    • Justin Porter says:

      September 9, 2014 at 8:58 am

      It depends on what kind of jobs you want. Some communities would prefer any job, I think Minnesota is fortunate enough to have a decent supply of high paying jobs that require specific skillsets.

      Tech jobs are great jobs, but the challenge is you typically try to do more with less. This basically means that startups try not to hire people until they absolutely need it and most of the time that works because technology inherently automates a lot of work/process.

  • Lee Egerstrom says:

    September 9, 2014 at 8:24 am

    Justin - I’ve got to ask if there are any limits other than access to capital holding back technology startups in Minnesota? So much of Minnesota’s past developments have been built on existing natural resources or as extensions and expansions of things other companies and people were doing. Is this alignment to resources still necessary?

    • Justin Porter says:

      September 9, 2014 at 8:36 am

      Capital always comes up. The real limitation is the entrepreneurial mindset. We have a culture that is more risk averse and caters to the big organizations we created decades ago.

      Regarding resources, we are fortunate to be in place with abundant resources - smart and diverse population of people, great city infrastructure (transportation), good cost of living, etc…

      Minnesota is a great place to start a company.

      • Lee Egerstrom says:

        September 9, 2014 at 8:44 am

        I like that answer. Building on the infrastructure we have in place, we now have waves of New Minnesotans - immigrants and refugees - coming into Minnesota with entrepreneurial spirits and rapid pursuits of education. Is this building the human capital needs to keep the entrepreneurial ball rolling?

        • Justin Porter says:

          September 9, 2014 at 8:53 am

          You betcha! wink

          I consider that a huge advantage in our startup ecosystem. The more diverse the more likely innovation will happen.

  • Robert Nepper says:

    September 9, 2014 at 8:27 am

        We could have many many more private sector businesses and good “make things” jobs if our major companies were required to “Use or Return” their employees’ inventions, which they claim !
        Most of these large firms require that employees sign an overreaching “Employee Agreement” (EA) which claims virtually all employee inventions 24/7/365 for the employer,(as a condition of employment), but with no obligation to actually USE those claimed inventions. This missing obligation gives the employer awesome power to claim and then CRUSH many unwanted inventions which do not fit the employer’s chosen business. Employers often get more inventions than they can handle; thus they consider them “a dime a dozen”, so it doesn’t bother them to SCUTTLE them (to keep their creative employees focused on assigned tasks ONLY! It is difficult to imagine how many new businesses, jobs and tax dollars we lose because of this unbelievable destructive practice!
      In just ONE case of an unwanted employee invention which was released back to the employee as “worthless,’ spawned a huge $50 BILLION entirely new xerographic industry creating 500,000 new jobs1 (WSJ May 23, 1989).
          In my own case, my employer claimed my new (developed) product, which I had developed in my own workshop, on my own time, with my own tools, parts and personal funds - totally unrelated to my employer’s businesses. Worse yet, he didn’t even want it; he just wanted to quickly CRUSH any inkling of outside entrepreneurialism arising from any of HIS employees!
        How can we expect a vigorous industry with full employment when we allow this unbelievably destructive practice to continue? We need passage of SF 21 (Use or Return); it wasn’t even given a hearing the last two sessions of the Minnesota legislature. That organization was too busy spending millions on new stadiums and an office building for themselves!

    • Justin Porter says:

      September 9, 2014 at 8:39 am

      Sorry to hear about your situation. This is more reason for individuals to start their own company and create better employment agreements that are fair and reasonable.

  • Deb Balzer says:

    September 9, 2014 at 8:55 am

    Are you seeing more women involved in tech startups and in technology fields overall?

  • Steve Fletcher says:

    September 9, 2014 at 9:09 am

    If one our readers has a really great idea for a new tech business… what should they do next?

    • Justin Porter says:

      September 9, 2014 at 9:24 am

      Thanks for that great question, Steve!

      Just like Thomas Edison said, “Genius is one percent inspiration, ninety-nine percent perspiration” so “Startups are one percent idea, and ninety-nine percent execution.”

      I recommend getting connected into the community by attending as many events as possible. I co-curate a weekly startup newsletter called StartupDigest (https://www.startupdigest.com/digests/twin-cities). This is a great way to plug into the Twin Cities startup community.

      Thanks again for having me today. Feel free to send me an email at .(JavaScript must be enabled to view this email address).

  • Lee Egerstrom says:

    September 9, 2014 at 9:14 am

    The threads this morning reenforce the belief we have the human resources in Minnesota to support a burst of entrepreneurship and startup companies. What still gnaws at me is questioning whether we have the venture capital in place to support such activity. Have your and your colleagues explored available capital we will / would need and have?

    • Justin Porter says:

      September 9, 2014 at 9:30 am

      There will always be the debate about whether there is enough capital. If you ask the entrepreneurs, most of them will say there is not enough capital. If you ask the investors, they’ll say there isn’t enough good deals worth investing.

      At the end of the day, good startups will get funded either in Minnesota or outside.