Accelerating Entrepreneurship - II
New Bohemian Innovation Collaborative
The year 2014 was a turning point for Iowa’s startup community. The community had its infant stages of 2008/2009 and seen various startup events and organizations launch, run, shutter and morph. The state government was now deeply and positively embedded in the community.
StartupCity Des Moines, focus of the forthcoming Part III of this series, was in the decommissioning process, and the Global Insurance Accelerator, focus of Part I of the series was its formative, pre-launch phase. The Kauffman Foundation-sponsored One Million Cups was regularly convening entrepreneurs around cups of coffee every week. Startups were being recognized for Technology Association of Iowa’s Prometheus awards and startup profiles had become a mainstay in the Des Moines Register’s business section as well as the business weeklies in Des Moines and Cedar Rapids.
Eastern Iowa energized and anew after 2008’s devastating floods was experiencing its own entrepreneurial resurgence. Today, it is time to dig into their community serving work.
Before we begin, though my words below may sound like paid advertising, they are simply words of admiration for an organization that has demonstrated consistent investment in its community. I know many on the team personally and their humility will have them mortified at this recognition. I hope you read this with equal admiration for the individuals who give a lot of their time, talent and treasure to grow Iowa entrepreneurs & entrepreneurship.
Humble origins
The Cedar River flooded the city of Cedar Rapids in 2008, and the ensuing recovery brought community together in unprecedented ways. Eastern Iowa was never stranger to software or hardware technology companies and maintained its concentration of deeply technical resources, despite the low density of companies seeking exponential growth in the region, and across much of the Midwest. Yet the flood recovery sparked something new and different.
I met Eric around in 2013 just as he began a series of road trips across Iowa, collaborating and learning from his peer entrepreneurs and entrepreneurial support organizations from his neighborhoods of Cedar Rapids, Iowa City and Cedar Falls to well as new friends in Des Moines, Ames and beyond. He found himself at coffee shops and IEDA offices, from legislators to economic development chambers.
His developing vision ran parallel to those of the Global Insurance Accelerator in some ways and diverged in others. He envisioned an accelerator to host startups across industries and customer segments to spur innovation and bring new companies to the region. Embedded within this vision was to provide a means for latent talent to experience entrepreneurship with a support structure.
The Iowa Startup Accelerator (ISA) was born in 2014 and brought ten companies to Cedar Rapids, three from Iowa, two from outside the US, and the remaining five from other states. Each participated in the program, learned the process of modeling a business for exponential growth, structured financial models, engaged in mentoring sessions with current and past founders, and prepared for graduation day (demo day in startup parlance) on Nov 6. At least three of the ten remain viable businesses today under their original name & ownership or post-acquisition.
Expanding Support Systems
Accelerators surround business founding teams with a managing director, a program manager, curricula, mentorship, access to investors, and members of the community vested in the company’s success. Attention on the founding team and company are a core principle of most accelerator ethos and service providers simply selling their wares to these young companies is verboten. As accelerators mature, therefore, services needed and sought after are either built from within the accelerator or partners carefully curated.
ISA recognized additional skills and services needed in-house for the incoming teams to the ISA and the larger community. It had formed a non-profit entity concurrently with launching the accelerator, named it the New Bohemian Innovation Collaborative (NewBoCo). This entity not only housed the ISA but also became home to the new service organizations. It began by addressing the three key areas of need for any founding team as they near graduation from an accelerator - space, money and talent.
Space
The ISA started on the second floor of Geonetric’s office building and teams worked there throughout the program. As graduating teams are expected to move out to their own spaces to make room for the next cohort and programming upon graduation, space for them became a need. Dispersion can result in lost camaraderie built by members of the cohort who spent 90-100 days working near and with other so proximity was key.
Andy Stoll and Amanda Wood were strong members of the community and ran Vault Coworking, one of the earliest coworking spaces in the state. From the onset of their space, they recognized a need to expand their community and sought connections across Iowa and beyond (more in next week’s StartupCity Des Moines story).
They saw the collaborative opportunity with ISA and relocated their coworking space into Geonetric’s building, bringing the idea and prospect of creative collisions closer. This provided an option for graduating teams to move across the hall and continue to work in and expand the entrepreneurial community. Their infectious energy was a catalyst in growing the ecosystem further, boosted itself by proximity to their people - entrepreneurs.
Although Andy and Amanda now work on projects within the Kaufmann Foundation umbrellas, Vault coworking continues to operate today and supports day passes, annual memberships and month-month agreements for short and long-term stays.
Money
The best accelerators guide the startups to lay a path toward commercial success and exponential growth toward an exit. Unlike building sustainable, lifelong & lifestyle businesses, accelerators by and large focus on companies that can be grown toward an exit to return a profitable exit quickly. This isn’t simply a perverse incentive, rather a recognition that accelerate-able companies consume larger amounts of capital, do so quickly, and carry a higher risk of failure than small business.
Startups do not generally qualify for small business administration loans as they often don’t have assets to collateralize, need far greater amounts than economic development program loans and grants, and must find private capital to match available support from state of Iowa programs.
In collaboration with Plains Angels, NewBoCo launched the Corridor Angels Investors to find and educate accredited investors in the region about startup investments. This effort in 2015 led to the subsequent establishment of ISA Ventures, a $22M venture capital fund to provide strategic financial backing and support for high-growth companies.
Talent
Much of technology history is punctuated by a lack of sufficient resources to create, deploy, support and expand technological products. As the gap grew between available and necessary resources, numerous agencies and businesses identified means to introduce technology to younger students.
NewBoCo recognized this need and created its own programs to educate students, teachers, and non-teacher adult education programs. Its DeltaV code school deployed the bootcamp method to provide rapid and immersive education in technologies at startups and corporates. They also recognized the need to equip teachers with necessary computer science education skills. Focusing on kids, they brought the global CoderDojo programming workshops via a local chapter to the region.
Each of these programs was designed to solve a long-term problem of adequate resources to enable companies being born in the region to stay and grow here.
Learnings from this program unearthed another opportunity, one referenced in the Geonetric article some months ago. A modern approach to technology and innovation is rooted in Agile principles popularized in 2021. NewBoCo developed the curricula for extending the very practices they were teaching startups during ISA’s program and at Geonetric to corporates statewide.
The Latest Addition - Novy Venture Studio
Venture Studios are a natural evolution from accelerators where founders who dream of a world-changing idea build a company. Venture studios pivot on the idea slightly, bringing seasoned and bespoke partners to the founding team behind an idea. Novy Ventures is Eric and team’s latest addition.
They review ideas submitted for commercial viability, often as long as an accelerator program itself. This vetting allows iterative idea-refinement before a dedicated research and validation period with prospective customers and subject matter experts in the field. As ideas move through this refinement funnel, the winning, single, idea is chosen for investment.
The investable idea is converted into a formal company and receives up to $1M in investment from Novy Ventures to facilitate the product build, brand and marketing, sales and revenue strategy and scale. The goal throughout this phase is to build the nascent company toward an exit to an acquirer or become a standalone company.
Eric, David and team have done this before with team of founders who walked through the ISA. Critically, in this phase, the founders and Novy members become one with mission and incentives aligned even stronger for mutual success.
Leadership
Eric has shown an ability to attract and grow talent to elevate NewBoCo. Operating the organization with long-term succession in mind, his team comprised David Tominsky as program manager in 2014 and remains in a leadership role today at Novy. Aaron Horn joined in 2017 and served in various roles including Eric’s successor to the executive director role until 2023 when Jill Wilkins stepped in to the role.
He has grown it from a 2014 P&L of $292,000 to nearly $2.9M in 2023 with significant financial and operational support from community and corporate partners. None of this could’ve been possible without significant financial support complementing Eric’s own blood, sweat, tears and windshield time on I380, I80, and I35 when he wasn’t traversing state highways and gravel roads to angels.
The team’s structure is influenced by agile and Scrum principles, allowing the non-profit to operate with the flexibility and high-velocity execution as with a startup. This agility allows NewBoCo to rapidly pivot and launch new programs to meet emerging needs in the ecosystem demonstrated by more than a decade’s work.
In Closing
It is heartening to see that the New Bohemian Innovation Collaborative isn’t done writing its story and continues to innovate, true to its name, at home and across the state. Its leaders and team members remain invested in spurring and growing entrepreneurial ventures and are constantly finding new ways, partnerships, and people with a shared purpose.
This entrepreneurial support organization remains critical to the state’s economic development future and thus worthy of public and private support.
I am honored and proud to be a member of the Iowa Startup Collective whose focus on entrepreneurs across Iowa inspires many. I am equally honored and proud to be part of the Iowa Writers Collaborative whose nearly 100 members share a depth of knowledge, education, inspiration, opinion and essays to an ever-broadening audience. I hope you check out both.
Really love the space-money-talent framework for post-accelerator support. Most ecosytems build one or two of these but NewBoCo seems to have nailed all three simulatneously. The transition from Vault coworking straight into ISA Ventures funding feels like it reduces alot of friction for graduates.
Great history. I knew Aaron Horn but not this background. Appreciate the context and story of evolution.