Step 1: Good Idea, Step 2: ???, Step 3: Funding - Minnesota Needs Fundable Startups, Not More Funding

I attended Minnebar at the Best Buy World Headquarters yesterday, and it was awesome in many ways. I met some really interesting people, and had a chance to catch up with past acquaintances. Plus, I had never been to the Best Buy World Headquarters, so that was cool too.

However, I attended the "How Can Minnesota Be Better?" sesh, and I didn't realize how big of problem people perceived there was for startup funding in Minnesota. Everyone uses The Valley as a benchmark, but unfortunately Minnesota isn't The Valley. I think people should stop complaining about the funding issue, and start creating businesses that are fundable. And by fundable I mean:

• Generating revenue
• Having actual customers
• Showing growth
• Proving the business model

Granted, I'm sort of talking out of my ass here, considering I'm only 22 and I really only have one startup under my belt, which was pre-revenue...far from being fundable. Regardless, this is the internet and I can say whatever I want, so I will go on.

One of the panelists at the sesh was Chris Smith, a local partner in Coral Group, a venture capital firm. I've gotten to know him recently, and I agree with a lot of his view points. We talked after, and like he said, people tend to be a little shocked when he tells startups they probably shouldn't be looking for funding, but rather they should be focusing on creating a fundable company.

There's the notion of "failing fast", which Minnesota entrepreneurs should be embracing more. The idea is to test a business idea as quickly and cheaply as possible, in the simplest form possible. If the business model doesn't work under those conditions, chances are throwing a bunch of money at it isn't going to change a whole lot. Case in point: I'm working on an idea that involves SMS. Part of the business requires someone to receive a text message from a user to their email. I could pay a bunch of money to set up an SMS gateway, pay a developer a bunch of money to create the backend, and maybe even a cool web interface and then go find customers.

The problem with this is that if the system ends up not being used, then that was a big waste of time and money. So instead of doing that, I simply setup a Google Voice account that forwards text messages to an email, and then I have that email set up with the ability to forward to any other number of emails of my choice. This took me all of 30 minutes to setup and cost me nothing. Now I can go to potential customers with a minimum viable product to test my hypothesis. If it doesn't end up working, who cares? If it does, then I will iterate and build exactly what my potential customers say they want/need. Even though I am basically a genius, there's no way in hell I'd ever guess right without testing and talking to my customers first.

So, go create a fundable company and see how far you can get without looking for outside funding.