Podcast Summary
Capital Factory: Connecting Startups with Resources and Community: Capital Factory, an Austin-based accelerator, connects startups with investors, customers, and talent through their network, mentor programs, and physical space. Amidst the pandemic, they've shifted to virtual events and office hours, demonstrating the value of accessible, convenient connections.
Accelerators like Capital Factory play a crucial role in connecting startups with investors, customers, and talent. Capital Factory, in particular, is the hub for entrepreneurs in Texas, focusing on bringing people together and facilitating these connections through their network, mentor programs, and physical space. With the onset of the coronavirus pandemic, Capital Factory has shifted its focus to virtual events and office hours, which have seen higher utilization than before due to the ease of virtual connections. While there is still value in face-to-face interactions, the pandemic has shown that virtual meetings can be more accessible and convenient for startups. Overall, accelerators like Capital Factory continue to provide essential resources and connections for startups, adapting to the changing landscape to best serve their communities.
Losses of serendipitous encounters and in-person capital during remote work: The shift to remote work limits opportunities for authentic conversations and new opportunities through serendipitous encounters and in-person capital. However, these connections can be rebuilt in a virtual setting.
The shift to remote work and virtual interactions during the pandemic comes with significant losses, particularly in terms of serendipitous encounters and the building of in-person capital. These elements are crucial for fostering authentic conversations and new opportunities. The cancellation of large events like South by Southwest during the pandemic highlights the challenges of making such decisions, both financially and logistically. Despite these losses, it's important to remember that these connections can be rebuilt, albeit in a different way, as we adapt to our new virtual reality.
Navigating the Challenges of Cancelling a Large Event Due to a Global Health Crisis: The unpredictability and challenges of hosting large events during a global health crisis require difficult decisions, contract negotiations, and uncertain timelines for a return to normal.
The decision to cancel the South by Southwest festival due to the COVID-19 pandemic was a difficult one with significant financial implications. The organizers were the first to make the call, but it was a hard decision that involved navigating contracts, refunds, and uncertainty about the future. The festival typically books dates years in advance, but the pandemic made it unclear if or when the event could safely resume. The only potential "miracles" that could lead to a quick return to normal are the discovery of a cure or the development and distribution of a vaccine, but both of these possibilities are uncertain and could take years. Ultimately, the situation highlights the unpredictability and challenges of hosting large events during a global health crisis.
Return to large-scale events may take up to a year with new safety measures: Protect your business with cyber, D&O, E&O, and EPL insurance using a broker like Embroker for custom-built policies and instant quotes
The distribution of COVID-19 vaccines and the return to large-scale events like 100,000 person gatherings are still a ways off. It could take up to a year for everyone to have access to the vaccine, and even then, new technologies like rapid testing and potential breathalyzer devices may be necessary for large events to occur safely. Another important takeaway is the significance of insurance for startups. Cyber, D&O, E&O, and EPL insurance are all crucial for protecting your business from potential lawsuits and financial losses. Traditional insurance companies can have lengthy and opaque sign-up processes, but using a broker like Embroker can save time and money with instant quotes and custom-built policies.
Capital Factory's Shift to Virtual Operations: Capital Factory transitioned to a rolling acceptance model and virtual platform, providing long-term benefits like continued access to resources and remote operation. They use digital tools like Slack for community engagement and offer mentor office hours, Ask Jason sessions, and other strategies to keep members engaged.
Capital Factory, a leading tech accelerator and venture fund, has shifted its operations to a rolling acceptance model and a fully virtual platform in response to the pandemic. While this transition has led to the loss of the cohort system, it also offers long-term benefits, such as continued access to resources and the ability to operate remotely. Capital Factory has leveraged digital tools like Slack to foster community engagement and create opportunities for networking and collaboration. They have implemented strategies such as moderated chat rooms, small wins, offers and promotions, and a book club to keep members active and engaged. The new model also includes mentor office hours and Ask Jason sessions, which have been successful in providing valuable insights and resources to members. Overall, Capital Factory's pivot to a fully virtual model has allowed them to adapt to the current situation while continuing to provide valuable resources and opportunities to their members.
Regular 'ask me anything' sessions in a startup accelerator: Inviting mentors for daily text-based Q&A sessions boosts community engagement and provides valuable insights in a professional setting. Capital Factory's unique economic model further strengthens the sense of collaboration and mutual benefit.
Building a community, especially in a professional setting like a startup accelerator, can be effectively done through regular "ask me anything" sessions. Capital Factory, a Texas-based accelerator, has seen success with this method by inviting mentors to answer text-based questions from the community every day. This not only provides valuable insights but also encourages participation and engagement from the audience. Additionally, Capital Factory's unique economic model, which relies on mentors investing their time and resources while startups give up a percentage of equity, fosters a strong sense of collaboration and mutual benefit within the community.
Capital Factory's Unique Model for Supporting Startups: Capital Factory fosters a sense of community and shared success by combining equity sharing among mentors and a smaller investment fund, helping startups secure additional capital and valuable network connections.
Capital Factory, a Texas-based tech accelerator, has created a unique model for supporting startups by combining equity sharing among mentors and a smaller investment fund. This approach fosters a sense of community and shared success, with mentors receiving equity in over a hundred companies collectively. The fund, primarily funded by mentors and other investors, is actively investing in startups across various funding rounds, helping them secure additional capital and providing valuable network connections. This model has proven successful in the challenging economic climate, as the accelerator continues to invest in and support startups despite the downturn. Additionally, LinkedIn is offering free job postings for healthcare and essential service organizations to quickly find and hire qualified candidates during this time.
Recessions as a Time of Opportunity for Entrepreneurship: Recessions can present fewer competitors and a larger market, encouraging entrepreneurship. Entrepreneurs should view crises as a ladder for growth and seize opportunities despite challenges.
Recessions can present both challenges and opportunities for entrepreneurship. Josh Bear, the founder and CEO of Capital Factory, started his business during the Great Recession and saw it as a time of less competition and a bigger market. He believes that the current economic crisis could lead to a similar resurgence in entrepreneurship due to high unemployment and the need for creative solutions. Bear also shared his personal experience of starting a successful email marketing company, Skylist, during the dot-com boom and the subsequent crash in 2000. Despite the challenges, he saw it as a time of growth and opportunity, and eventually sold the business for a good outcome. Overall, Bear encourages entrepreneurs to view crises as a ladder for growth and to seize the opportunities that come with them.
Three Categories of Businesses Amidst Economic Downturn: Businesses face distinct fates: struggling/failing, surviving, and thriving. The strongest are still making cuts, while remote work fuels growth in education and some industries.
The current economic climate is forcing businesses into distinct categories: those that are struggling or failing, those that are thriving, and those that are just managing to survive. The walking dead are those that were already in trouble and will likely fold. Those that were barely making it will no longer be able to squeak by. The strongest companies are still facing challenges, making layoffs, and lowering forecasts. Some companies, however, are experiencing a boom due to the shift to remote work and the need for certain products and services at home. Education is a potential area of significant growth as parents take on a larger role in their children's education. The economic downturn is also leading to cost savings for companies through remote work, but there are potential downsides, such as the loss of face-to-face interaction and the challenges of managing a fully remote team.
The future of work may involve a hybrid model of remote and in-person collaboration: Companies may adopt a hybrid model where teams come together for creativity then work remotely for extended periods, striking a balance between benefits of remote work and in-person collaboration.
The future of work may involve a hybrid model of remote and in-person work. While there are benefits to being physically present in an office, such as building physical capital and having a slight edge over competitors, the trend towards remote work is undeniable. With the success of remote companies like Square, Twitter, and Zillow, it's likely that more companies will allow their employees to work from home permanently. However, this doesn't mean that in-person collaboration will disappear entirely. Instead, companies may adopt a model where teams come together for intense periods of creativity and then work remotely for extended periods. This nomadic lifestyle could be the future of work, especially for younger generations. Ultimately, the key is finding the right balance between the benefits of remote work and the benefits of in-person collaboration.
Importance of communication and collaboration for distributed teams: Effective communication and collaboration are essential for distributed teams, requiring regular in-person meetings and evaluating a company's culture and leadership.
Effective communication and collaboration are crucial for distributed teams, even if it means being away from family for extended periods. The speaker shared his experience working for a larger organization with distributed management teams and the need for regular in-person meetings. He also discussed the importance of evaluating a company's culture and leadership when considering a career move. The conversation then shifted to the impact of the pandemic on children's lives, with the speaker expressing gratitude for his family's situation while acknowledging the inequities and challenges faced by others.
Managing COVID-19 Pandemic: Balancing Public Health and Individual Freedom: Early action and an educated population are crucial for minimizing the spread of COVID-19, but different regions face unique challenges and must find a balance between public health and individual freedom.
The approach to managing the COVID-19 pandemic varies greatly depending on the specific circumstances of a region, such as the number of cases and hospital capacity. Some areas, like the Bay Area, prioritize early action and a highly educated population to minimize the spread of the virus. In contrast, other areas, like Texas, focus on managing hospital beds and allowing individuals to make their own risk assessments, while wearing masks. Ultimately, there is no perfect answer, but finding a balance between public health and individual freedom is crucial. The speaker emphasizes the importance of early action and a population that understands the science behind the pandemic. However, it's essential to acknowledge that different regions face unique challenges and must find solutions that fit their specific needs.
Missing opportunities due to past experiences or biases: Evaluate opportunities based on their merit, not influenced by past experiences or biases. Don't miss out on potential successes.
Sometimes, opportunities can be missed due to past experiences or biases. In the discussion, the speaker shared examples of investing in companies where they initially hesitated but later regretted not jumping on board earlier. One was Greenling, an organic grocery delivery service, where the founder later created a successful company, CC's Veggie Noodle. The speaker was still dealing with the failing Greenling business at the time and couldn't invest in the new opportunity. Another example was Howard Lerman, who the speaker initially discounted but went on to become a successful entrepreneur. These experiences serve as reminders that it's essential to evaluate opportunities based on their merit and not be influenced by past experiences or biases. Additionally, the speaker emphasized the importance of wearing masks to protect others, drawing a parallel to seatbelts and their role in personal safety.
Investing in exceptional people and their ideas: Investing in exceptional people and their ideas, even if the initial concept seems unclear or unproven, can lead to great success.
Investing in exceptional people and their ideas, even if the initial concept seems unclear or unproven, can lead to great success. This was exemplified in the story of an investor who passed on a gym ticket opportunity but later invested in a successful company, Yext, which helps manage business presence across various platforms. The investor emphasized the importance of backing exceptional people and not trying to predict what will work. His top three investments included WP Engine, a blog hosting company that made it easier for users to manage their sites, a cab dispatching software that provided ratings and reviews for e-commerce websites, and an audio files platform for meditation. The investor admitted that the initial pitches for these companies didn't seem revolutionary, but the exceptional people behind them were able to prove the value of their ideas.
Be real and candid about limitations and learning: Focus on authenticity and consistency to build trust with investors, customers, and employees
Authenticity and consistency are key traits for founders. Instead of trying to convince everyone that your company or yourself is perfect, focus on being real and candid about your limitations and what you've learned. Consistently demonstrating your ability to learn and improve is also crucial for gaining credibility. A simple yet effective way to build trust is by doing what you say you will do, no matter how small the commitment may seem. This consistency and authenticity can make a significant impact on your relationships with investors, customers, and employees.
Following up is key to building relationships: Following up after meetings and promises strengthens connections and trust, especially in Austin's growing business community.
Following up with people after making a promise is crucial for building strong relationships and trust. This was discussed in relation to business launches and meeting new people in Austin. The city is known for its welcoming and growing community, which makes newcomers feel connected and plugged in. Austin's venture capital scene has also evolved, with many investors moving there and new ones emerging, creating a competitive and vibrant ecosystem. However, the importance of following up was emphasized as a key aspect of success in both business and personal interactions.
Living in Austin: Downtown vs. Lake Communities: Austin offers diverse living situations with downtown's urban vibe and lake communities' relaxed waterfront lifestyle. Known for its unique food scene, Austin is home to renowned establishments like Franklin's and Rudy's, and a lively debate over queso variations.
Austin, Texas offers various desirable living situations, with downtown and lake communities being popular choices. Downtown Austin is walkable, vibrant, and offers easy access to amenities, while living on the lake, such as Lake Austin or Lake Travis, provides a more relaxed, waterfront lifestyle. Austin is known for its liberal and libertarian vibes, which contrasts with the rest of Texas. The city is home to renowned food establishments, including Franklin's for brisket and Rudy's for barbecue, and Tex-Mex places that offer unique queso variations. The ongoing debate between Franklin's and Rudy's, as well as the various queso options, highlights the city's diverse food scene. Overall, Austin offers a unique blend of urban and outdoor living, culture, and cuisine.
From a small event to a massive convention: SXSW evolved from a small event to a leading platform for innovation, generating a substantial economic impact and showcasing the latest in technology, music, and film. Capital Factory plays a crucial role in the startup ecosystem, investing in companies and providing valuable network for entrepreneurs.
South by Southwest (SXSW) has grown significantly since its early days, evolving from a small event held in a few conference rooms in the Driscoll Hotel to a massive convention that takes over the entire Austin convention center and numerous hotels, attracting hundreds of thousands of attendees and generating a substantial economic impact. Started as a way to drive traffic to bars during spring break when students were away, SXSW is now a leading platform for innovation, showcasing the latest in technology, music, and film. Capital Factory, a leading tech accelerator in Texas, plays a crucial role in the startup ecosystem, investing in companies from the pre-product launch stage through Series A and providing a valuable network for entrepreneurs in Austin, Dallas, and Houston.
Being adaptable and flexible during uncertain times: Even during uncertain times, it's crucial to attend events and network, as these opportunities can lead to valuable connections and potential business growth. Be adaptable and flexible to changing circumstances.
Even during uncertain times, it's essential to show up and deliver when possible. Josh shares an experience where he was scheduled to speak at multiple events just before the pandemic hit. Despite the looming threat, he decided to attend, as canceling would have meant losing opportunities. If the situation had been different by a week, he would have had no choice but to cancel. This experience underscores the importance of being adaptable and flexible, especially when faced with unexpected challenges. Additionally, Josh emphasizes the importance of networking and building connections, which can lead to valuable opportunities. Lastly, he encourages listeners to reach out to him through various platforms, including josh@capitalfactory.com, josh@quityourjob.com, or Joshua Bear on LinkedIn, to learn more about entrepreneurship and starting a business.
