Lesa Mitchell has worked with entrepreneurs across the country and around the world, but she brought a Midwestern focus to her talk when she kicked off the new entrepreneurial speaker series for Columbia’s Regional Economic Development Inc.
Mitchell, the managing director of Techstars Kansas City, spoke at the June 15 event about entrepreneurship in the Midwest, emphasizing the importance of nurturing tech talent and engaging the community.
“The No. 1 problem that we have in the middle of the country is talent,” Mitchell said.
There are more tech job openings than qualified candidates to fill them in the Midwest, Mitchell said. She encouraged people to use online courses and other educational programs to equip themselves with technology skills.
She also emphasized the important role that community plays in helping entrepreneurs.
“You can create an entrepreneurship community if you can create a continuous learning community,” she said.
Missouri Business Alert spoke to Mitchell about Techstars Kansas City’s upcoming cohort and challenges Kansas City entrepreneurs face.
The interview has been edited for length and clarity.
Missouri Business Alert: As your first cohort is coming in July, what qualities does Techstars look for in the selection process?
Lesa Mitchell: At Techstars we’re a global network providing entrepreneurs an ecosystem and investment to scale their companies. Specifically in Kansas City, the Techstars programs from where we’re investing, we’re looking for companies that either could potentially have customers around the ecosystem that we live in, or where there is expertise within the ecosystem that could help them. I was really interested and expressed a lot of interest in either agtech companies, of which I don’t have any; or companies that are selling into the construction or design-and-build industry, of which I have a massive ecosystem in Kansas City; or any kind of unique hardware or software companies that are blazing a new path that nobody has blazed before.
Our first class in Kansas City is going to be comprised of 10 companies, who are all, except for one, very hardcore technology companies, and one consumer company that is less technology-based. Our goal is to look for a portfolio: Some that are really early, some that are not quite so early. I’m blessed with a cohort that has some entrepreneurs that this is not their first company and some entrepreneurs that are really early stage. We have everything.
MBA: What does Techstars provide for entrepreneurs beyond financial support?
LM: Techstars is an organization that has been around since 2007, and it’s an organization that was started by engineers. And I say that because you can tell in everything that we do that we’re an engineering-led organization. We collect data on absolutely every company that we have ever invested in, which is over 1,000 companies now, that raised over $3 billion. Every year, we relook at our curriculum. Which, we don’t really have curriculum; we have workshops that are taught by highly experienced industry people on topics like negotiation, scaling, product development pathway, fundraising, governance of your company, building culture within your company. Most importantly, every single of our programs are mentor-led, meaning currently I have 75 mentors that are part of the Techstars Kansas City program. Those are individuals that have a completely broad range of experience. Some are from the Midwest, some are flying in from San Francisco, Boston, New York or Austin. A lot of what happens through our process is we identify a core base of mentors for every program. But after I select my companies, I am looking for mentors that will specifically be geared towards supporting the companies that I have in that cohort and we’re investing in.
MBA: Why did you decide to join Techstars? What attracted you to the program?
LM: I was an entrepreneur, and then I’ve been working with entrepreneurs since the early 2000s. For a long time, I had a role that it was a conflict of interest to invest in companies directly, so I couldn’t do it. For the last four year, I have been doing it. I have been in San Francisco, working with big corporations that are working with entrepreneurs, and have been working with entrepreneurs myself as an early advisor. I love it, and I think I was born to do this.
My hope and goal, because I am very experienced, is that I could keep people from making mistakes that others have made before. That’s a critical goal of bringing these mentors in, is trying to surround the entrepreneurs with people who have expertise in areas that they haven’t had to deal with yet. Bringing people in that have all these kinds of really in-depth experience, to share that one-on-one with every single one of our teams, is a critical piece of our program.
MBA: What challenges do you see entrepreneurs face in the Midwest?
LM: The challenges in the Midwest are because of the lack of density, meaning we’re all spread out. You don’t collide with people who are experienced on an ongoing basis. If you’re living in a city like New York or Boston or San Francisco, or even Austin, the likelihood you’re going to meet 20 other entrepreneurs that have been down the same road that you’ve been down is higher. If you are in the broad Midwest, where there are not a ton of other technology entrepreneurs, the likelihood you have somebody that can help you and give you expertise is not as high. What happens with entrepreneurs is they don’t know what they don’t know until there’s a problem. The difficulty of being in the Midwest is simply the lack of access to that depth of experience.
Lack of access to funding, I actually think, is much less of an issue than it used to be, because there are tons of angel funders everywhere. But I would say instead of lack of access to funding, it is more of a lack of understanding of what to look for and how to go to the next steps. When to bootstrap my company and not raise money, because I can have customers instead, which is the absolute way everyone should go with if they can; or when should I get strategic partners instead of raising venture capital. And if I am going down the road of raising outside capital, how do I know the difference between capital that I am going to take from Person A that maybe has no expertise but has a lot of money and capital that I am going to take from Person B who has both expertise and money and has a network of potential customers and strategic partners. That is a missing link, which is really huge.
MBA: What do you think of the landscape of startup accelerators in Kansas City?
LM: The Kansas City landscape is great. We have, just like St. Louis, tons of early-stage resources. Maybe there’s not tons of expertise right in the space that an entrepreneur might need, but unfortunately that’s because it depends on the companies you are trying to do. If you are trying to do an agtech company, there are tons of resources that you can get access to. If you’re developing the next hardware company, there’s not a lot of resources for those kinds of companies. There’s not a lot of resources for consumer-based companies that could globally scale.
What’s most important about Techstars and is differentiated from other accelerators is we are a global network. There are 26 programs around the world like mine. We are all part of the same organization; we talk to each other every day; we share our mentors, advisors, funders. So if I have a company that we are choosing to invest in, in the Kansas City Techstars program, but they believe there is access to a funder or a strategic partner that is in Australia, I call Terry Gold, my counterpart in Australia, and he sets that introduction up. We operate as a global network, supporting entrepreneurs to scale. We are all incentivized to get companies to scale because we are investors.