October 20th, 2010
Checking in on Portland Ten and its drive to incubate 10 $1 million Portland startups by October 2010
We’ve all heard the criticism about early stage funding for Portland startups. But one of the most noticeable gaps—and less talked about problems—in our startup culture is the lack of mentors and expert guidance for young startups. We simply don’t seem to have enough veterans with enough successful exits… yet. But many people are actively working to resolve that issue.
One group that’s trying to fix that problem—and provide startups with the mentorship and structure they need—is the Portland Ten led by Carolynn Duncan. The Portland Ten started in early 2009 with a very ambitious goal: Incubating 10 $1 million startups by 2010. Was that goal insurmountable or achievable?
So here we are. October of 2010. 10/10. Since its founding, the Portland Ten organization has expanded to one full-time staff member, two part-time staff, three contractors, four volunteers, 15 skill development instructors, and five advisors.
But how has Portland Ten done on achieving its goal? Well, I took some time to catch up with Carolynn to get the latest on the project.
Here’s what she had to say.
When you launched the Portland Ten, you started with the objective of fostering 10 $1 million companies by October 2010. How close are you to that goal?
We have already “broken the ice” with one of our companies exceeding the $1 million target. Plus, we’ve had additional graduates (we call them “founders”) earn success in the form of venture capital funding, new local area jobs and more.
In total, we’ve completed five cycles of Portland Ten, with 24 enrolled and 14 graduated. Of those, one company exceeded $1 million, one secured $3 million in venture capital, and one added 15 jobs.
How close are the other companies?
The second company from the first five cycles is anticipated to hit $1 million in April 2011. Eleven companies are actively working toward $1 million. In addition, one company has shut down and one has gone dormant.
How has the Portland startup scene changed since you started?
Portland Ten launched into a horrible economy in February 2009, six months after major financial collapse.
The keyword for that period was “dormant.”
The funding climate was dormant. The startup climate was dormant. The tech and open source community was active—but commercially stagnant. Oregon Entrepreneurs Network (OEN) and the angel/pitching networks were active. Oregon Growth Account (OGA) money was dormant. This was pre NedSpace, Big Idea Bash, Portland Seed Fund, Portland Incubator Experiment (PIE), CivicApps, and PDC’s Economic Development Strategy. Pre- Madrona, True Ventures, and Kleiner Perkins investments
Now the terms I’d use are “active” and “emerging,” even in spite of a still-difficult economy.
How has the funding of Portland startups changed since you started?
Activity on the VC level has definitely increased, particularly in mid 2010. More out of state firms, and new names (Madrona, True Ventures, Kleiner Perkins) are doing deals in Portland. That simply was not the case when P10 launched in early 2009.
The City of Portland’s investment in the Portland Seed Fund has initiated some visibility around seed stage investing. A few venture firms in Portland have dried up—or become inactive.
In my opinion, there is more interest in Portland from outside investors than ever before.
You’ve seen the City of Portland, in the form of the Portland Development Commission (PDC), get behind this effort. That’s huge validation. What has it meant to the program?
We’ve had great support from PDC, as well as the City (CivicApps), and support from Mayor Sam Adams, as he’s lauded the Portland Ten effort at public events (OSBridge, CivicApps Awards Ceremony). This support has been extremely helpful.
PDC’s financial support in early 2010 allowed us to pilot running all three of our programs concurrently (P10, Sprint, Skill Development), so we can work with a variety of entrepreneurs—no matter what their commitment level or stage of company. Offering programs at various levels of training and financial commitment allows us to start developing a pipeline of companies that will be able to tackle the $1 million program in a year or two from now.
CivicApps has provided additional channels for getting the word out to the open source community, and support from PDC and Mayor Adams’ has been helpful in growing Portland Ten from startup, so to speak, into a long-term asset for the region. PDC’s Gerald Baugh is on our advisory board and has been a constant, enthusiastic champion of Portland Ten since getting involved in late 2009. We appreciate their support and look forward to the City and PDC’s continued engagement with the Portland Ten.
What has been the most challenging aspect of the program?
Learning to balance times when we, as a team, have to run extraordinarily hard for a short period of time (our own startup phase, enrollment periods), versus when we have to pace ourselves for the long haul (about 9-14 months into the project, when people started asking, “So, how come you haven’t got anyone to $1 million yet?”). Of course both of those have gotten easier as we’ve gained experience in this initiative, and it truly helps to have the first company to have exceeded $1 million, with the second one well on its way. But it is in no way a simple thing to manage this initiative and the impact we are developing.
Also, realizing that the more Portland Ten is “owned” by our entrepreneurs, by the community, by partner organizations at the higher education level, within the investment community, and by the City/State. Our vision is to foster this ownership, as the more the community builds a stake in Portland Ten, the more successful it will be.
And, finally, the creation of Portland Ten itself. From starting out with an idea (Rob Wiltbank and I met for coffee at Willamette University office, in early 2009), then giving up aspects of the original idea—or the way in which I would prefer that it is organized—in order to create an organizationally and financially viable company, has been a challenge. At the same time, we want to ensure we maintain the vision for how the programs and organization needs to work, in order to deliver results both to founders and the mission (10 at $1 million).
It is a tricky process. And, one that we’re still working through.
What has been easier than you expected?
The actual work with companies. It’s actually pretty damn easy to work with entrepreneurs and get fast results across the board with revenue, traction, biz dev, product dev, team, and resources, once they have made a full commitment to participate in the program.
And working with the ShopIgniter team to exceed the $1 million milestone was very, very easy. That’s genuinely amusing because it is the thing that scares potential participants the most, and is the aspect of the program that the community loves the most—and yet it is the easiest thing that we do.
Also, our relationships with alumni are stellar; they continue to participate months, even a year or more after graduating. They truly love the program and it is a joy to have built an organization that can deliver that quality of experience to entrepreneurs.
What shortcomings are you looking to improve in the coming months?
Some operational challenges, some growing out of startup mode and applying best practices for social impact organizations, and some refinement on the way in which we communicate to entrepreneurs how much they can benefit from participating in a Portland Ten program. I’d love to have 6 months off on a desert island to completely upgrade the design/usability of the programs and curriculum, but since they do work well, and since we update them every quarter based on participant feedback, we’re okay for now on those.
What about the Portland startup scene has surprised you?
How stagnant things really have been, and how much effort it really does take to reconfigure internally and externally, the way Portlanders perceive themselves and the startup community, and how outside regions perceive Portland as a viable “incubation” area for startups or not.
For example, the single most common thing I’ve heard from people in Portland, having pitched Portland Ten to hundreds of people in the last 2 years, is “Portland really needs Portland Ten”, quickly followed by, “I know an entrepreneur who really needs Portland Ten.”
And yet with all of that confirmation, to actually get a founder to participate in Portland Ten, is very, very difficult and a quite fragile process. We’ve talked with hundreds of entrepreneurs in the last 2 years and have had only 16 commit to the $1 million track. Why is that? It surprises me.
If you’re an entrepreneur in Portland and you want your company to be able to employ you and 10-15 others in 1-2 years (i.e. have $1 million in operating revenue), why wouldn’t you participate in a mentoring experience where so many resources from the business community, advisors, investors, peer founders, the City, PDC, and many others, are being made available to support you in that process?
What feedback do you have for Portland entrepreneurs or startups looking to move to Portland?
Portland is a great place for startups in the early stage. There is so very much attention and support being made available to you. Now is the best time its ever been, for entrepreneurs in Portland. If you aren’t sure what’s available, drop by Founders Coffee– Tuesdays 9 am at Backspace– and we’ll get you connected in.
I know you’re supposed to love all your startups equally, but do you have any favorites?
Not at all. We hold Alumni Founders’ Groups every month, and are available to all of our alumni founders with open doors. They often drop by months after graduating, to say hello or they call us up to grab a beer when things are rough. There are moments in each project that are more exciting than others, and it is always fun to celebrate the successes, but entrepreneurship is such a tremendous roller coaster, and our entrepreneurs have to manage months and months of failure and stagnation before the tide turns. We’re proud of all of our entrepreneurs and wish them all the best in their endeavors.
Any parting comments?
Only that I would very much like to thank the P10 staff and advisor team for their dedication to this project and to the startup community, specifically Nick Cottle, Jennie Kalberer, Madeline White, Mark Grimes, Rob Wiltbank, Diane Fraiman, Gerald Baugh, and Kristin Wolff.