Founding W3i eleven years ago in St. Cloud has certainly had its advantages and disadvantages.  Rather than answering this question solely based on my experiences alone, I interviewed several other greater Minnesota tech entrepreneurs for their feedback on this subject.

With so much thoughtful input, I decided to answer this question in a three post series for TECHdotMN: the first post focuses on advantages, followed by the second post on disadvantages and the third and final focuses on how the Twin Cities tech community can support greater Minnesota tech hubs — and vice versa.

The Advantages of Starting & Growing in Greater Minnesota (Part 1 of 3)

The Disadvantages of Starting & Growing in Greater Minnesota (Part 2 of 3)

The Takeaways of Starting and Growing in Greater Minnesota (Part 3 of 3)

The Making of a Risk Taker

It is harder to create a hit without a cowboy mentality surrounding you.

Mike grew up in Hawaii before finding his way to Silicon Valley. Mike told me a story about one of his first entrepreneurial endeavors growing up as a kid in Hawaii. He got the supplies together to create a Macadamia nut jewelry business. To his dismay, his mother tossed out his supplies when she discovered his intentions. To this day, Hawaii’s culture of risk aversion hasn’t changed. Mike said a friend of his with a small business in Hawaii says the government there won’t help unless you have at least $5 million in investment. From my perspective, creating a tech company in Minnesota seems a lot like Hawaii. I’m part of a grass roots movement in the Midwest to try to change that.

Fail upwards.

As Mike puts it- “My life was a series of failures, but I always try to fail upwards.” After Mike decided to leave Tapulous prior to their successful sale to Disney, Mike took a job at Apple in developer relations. The Apple gig was much better than the options Mike had prior to Tapulous.

Don’t create a bigger footprint and get trapped in your own wealth.

Once you’ve made your millions of your first blockbuster, resist the temptation you change your lifestyle. You need to continue to focus on creating a company to change the world. You’ll get rich by doing this, not by creating a company to get rich.

Inside the Mind of a Hit Maker

It helps to be a little crazy,  a little delusional.

Don’t be afraid to pivot.

The original plan for Tapulous was to create a social network. As I have observed with the majority of top tech entrepreneurs, you need to adjust your ideas based on the markets response to your initial ideas.

Start with a lot of concepts, then start cutting.

This is actually a pattern I’ve observed with other hit makers. Rather than start building out the first concept for an app that comes to mind, it is best to define some upfront parameters, and then brainstorm a variety of concepts that meet those parameters. Tapulous actually had a portfolio of 34 apps, from which they initially selected 10 to work on, then they cut it down to 3 apps to launch with. Those three were Tap Tap Revenge, Twinkle, Friendbook.

Understand the human side of business.

Mike talked about how Tapulous couldn’t get their apps approved the day of the App Store launch. When he learned the app review team was extremely overwhelmed with submissions during the launch of the App Store, and working without sleep, he backed off. Personally, he said he was not pissed off once he understood the situation. Rather than calling to harass them, Mike dropped breakfast and coffee off for them.

Relentless focus on quality and creating apps that don’t suck.

As Mike puts it- “The crap market is saturated.” With over 300,000+ apps in the App Store, only the bold are going to stand out. What are some tactical things you can do to stand out? Focus on creating apps that don’t suck. Stop doing things that piss users off. A few examples-

• Hurry up and wait- Eliminate splash screens
• Surprise and delight- Add those little things that impress people. 
• Implementation detail- Never let them see how you made it
• Design for everyone- Bejeweled versus Grand Theft Auto
• Don’t be a jerk- spam

If you focus on creating quality hits, you will have a more defensible business. It is much harder to copy something that is of high quality without a lot of effort.

Get Out There and Start Creating Blockbusters

Mike says- “There is money in ripples, but immortality in hits.” and that “Life is finite. Use your time to do something worth remembering.” I couldn’t agree more. The vast majority of all app developers are focusing on creating niche apps because they feel it is a safer bet to ensure they get a positive return on their efforts. I’ve heard this referred to as the “niche buster” strategy. Death to the niche busters. Get out there and start creating blockbusters.

After having dug to a depth of 10 feet last year, New York scientists found traces of copper wire dating back 100 years, and came to the conclusion that their ancestors already had a telephone network more than 100 years ago.

Not to be outdone by the New Yorkers, in the weeks that followed, a California archaeologist dug to a depth of 20 feet, and shortly after, a story in the LA Times read: ‘California archaeologists, finding traces of 200 year old copper wire, have concluded that their ancestors already had an advanced high-tech communications network a hundred years earlier than the New Yorkers.’

One week later, The Pioneer Press, a local newspaper in Minnesota, reported the following: After digging as deep as 30 feet in his pasture near Embarass, Minnesota, Ole Olson, a self-taught archaeologist, reported that he found absolutely nothing. Ole has therefore concluded that 300 years ago, Minnesota had already gone wireless.

Thank Heavens for Ole.

I arrived while the teams were eating lunch, and caught Jeff Pesek’s discussion on the future of Minnesota’s startup community. Next I had the opportunity to hear Kim Garretson of Ovative Group say a few words, including my favorite quote of the day on how local startups get “Minnesota niced” by top Minnesota corporations who take their meetings, but never buy whatever the start-ups are selling. To end the lunch presentations, I then provided my remarks on the topic of innovation, and its role in tech start-ups.

Thanks to Jeremy Mooney for snapping this photo of me presenting.

After lunch, I had the opportunity to meet with a few of the startup teams-

• FlightCrowd- W3i’s own Jeff Bollinger was in the team that built FlightCrowd, a social application that connects you to interesting people already on your flight.
• LocateMyDeal – My friend and very talented iOS app developer Aaron Kardell was in the LocateMyDeal start-up team.
• Qonqr- There was a little buzz building about the new start-up called Qonqr,  so I asked Shane Reiser to introduce me to the team just before I had to leave. I’m thankful Shane provided the intro, because this location-based mobile game  ended up being the winner of Startup Weekend. Qonqr is a location-based, Risk-like, mobile game played out over the face of the earth! Players are operatives who must capture geographic zones by deploying nanobots to help their army defeat the opposing armies and qonquer the world. Successful deployments, recruiting, and squadron coordination result in experience points that, over time, promote the operative through higher and higher ranks, providing more powerful nanobot options. Monetization opportunities include player purchased virtual armament upgrades and local businesses paying for the opportunity to be a featured battleground. Game interface for field operatives will be mobile devices, and the Command Center will be accessible from the web.
• Polywiks- Polywiks is a social gaming app utilizing real-time voting records, so you can follow every politician’s actual decisions in office, similar to daily status updates, and vote on whether or not you would do the same thing.
• Speed Watch– Speed Watch is an iPhone and iPad app that clearly tells you the speed limit of the road you are currently on, and notifies you when the speed limit changes.

Although I was initially a bit skeptical about the whole format of Startup Weekend, I would highly recommend you participate the next time they are in your city.

Check out the video of the panel discussion courtesy of TECHdotMN.

Some of you app developers may recognize Dan Grigsby on the panel from the recently shut down iPhone developer blog Mobile Orchard.

It was pretty clear in my discussions while at Minnebar 2010 that most of the Minnesota tech companies have job openings and are hiring, like W3i.

Several Minnesota start-up thought leaders were on hand including Graeme Thickens of Minnov8.com, Robert Stephens, founder of GeekSquad, Justin Porter of the University of Minnesota Venture Center, and John Roberts attorney at start-up friendly New Counsel. There were many young Minnesota entrepreneurs on hand including Mynul Khan founder of FieldNation, and Adam Sellke of Evolve (recent semifinalist at MN Cup 2009). I was surprised that there were several Minnesota entrepreneurs who had multiple successful companies with exits.

Minnebar cofounder Ben Edwards led a very interactive roundtable discussion for web app builders. Ben’s leadership was clearly on display as a large group of primarily independent developers came forward with their questions on how to market the technology they built. It was very interesting to hear a group of developers discuss marketing issues. As an Internet company founder, I know you need to wear a lot of hats from my first hand experience.

The most heated discussion of the day was “Bootstrapping your Tech Start-up” led by Kevin Spreng of Robins, Kaplan, Miller & Ciresi. Kevin provided tips for bootstrapping entrepreneurs such as hire contractors rather than employees, go without an office, and focus on execution. Near the end of his session, Kevin stated that marketing agencies were a black hole because marketing agencies spend a lot of money, and he advised start-ups to handle their own marketing. Curt Prins, Executive Director at District 202 and marketing guru, responded with his disagreement and said not all marketers needed a large budget to accomplish results for start-up entrepreneurs. A rather lively debate ensued (see tweets under #minnebar). Nice work Kevin and Curt in driving a stimulating discussion on the topic of bootstrapping.

Justin Grammens led a packed session on how to develop Android applications. Justin explained how, unlike iPhone apps, Android apps require no certification or approval. He also created a simple “Mobile Twin Cities” app during the session. I was amazed at how simple creating a basic Android application can be.

Dan Frankowski and Max Harper from Blue Shift Labs led a discussion on coding with Google’s App Engine that intrigued a number of developers. The crowd was very engaged. The scripting seemed pretty straight forward.

Mike Bollinger provided an introduction to HTML5. The tweets that followed said that HTML5 looked “amazing” and that users should stop using Internet Explorer 6 to increase the adoption rate.

Ryan Weber and I provided a summary of the top trends and winners in the application industry. Ryan forecasted that the integration of social and location-based mobile technology would be one of the most significant drivers of growth and change in the mobile app space.

My favorite discussion was the one facilitated by cofounder of Minnebar, Luke Francl, entitled “Midwestern Startups: What is Possible?”. Luke started by asking for those entrepreneurs that had worked in Silicon Valley to compare their start-up experience there versus their Minnesota start-up experiences. One such entrepreneur answered Luke’s question by saying Silicon Valley start-ups aren’t as afraid to fail as those in Minnesota. Another entrepreneur said the biggest difference was how much deeper the talent pool was in the valley. Finally, someone joked that when he was in Minnesota, whenever someone asked where he worked, he responded with “I work for at a start-up”. When asked the same question while at an iPhone meet-up in Palo Alto, the response was met with laughter. Why? In Silicon Valley, everyone works for a start-up. The discussion next turned to several ideas on how we can make Minnesota a better place to create a tech start-up. Among the ideas identified were creating an incubator fund modeled after Y Combinator, getting the University of Minnesota to raise money to fund local tech start-ups similar to what the University of Wisconsin started a year ago, the creation of a new Techcrunch-like Minnesota focused community site, and taking advantage of Minnesota’s significant number of Fortune 1000 companies to provide a distribution channel for Minnesota-brewed new tech. Michael Gorman of Split Rock Partners, one of the sponsors, closed Luke’s discussion by saying he was looking forward to seeing where we would be in another year. Judging by all of the energy, and the way the Minnesota developer and entrepreneur crowd is starting to support each other, I am confident we will see continued growth in the Minnesota tech start-up community. I am looking forward to Minnebar 2010.

“Small business owners are typically an optimistic lot, even in the face of dismal economic conditions. But a recent American Express OPEN Small Business Monitor survey found that GenY entrepreneurs are more optimistic than most. “More than three-quarters (80%) of these entrepreneurs have a significantly more positive outlook on business prospects versus GenX and business owners overall (each 55%), and Baby Boomers (52%),” the survey noted. GenY business owners were most likely to be hiring and making capital investments, and least likely to have cash flow issues and to be “stressed out” about the economy.”

Later on in her post, Donna provides highlights from a discussion we had about my experience as a GenY entrepreneur, and W3i-

“Focus on your core competency. Robert Weber’s company, W3i in Sartell, MN, markets third party computer applications and has been growing 53% a year. W3i continues to post significant gains this year because, Weber says, he had the foresight to eliminate divisions of the company that were hogging resources without generating significant revenue. He shut down a lead generation business and sold a mobile applications business “we never really figured out how to integrate into our main company.” With a single point of focus — “to be market leader in applications distribution” — Weber says the company is well positioned for growth this year.”

Read Donna’s full post here

The Minneapolis/St. Paul Business Journal posted quite a few more “official pictures” of the event on their Shutterfly page. To access the pictures, use the password- pictures
and click on the collection called “Young Entrepreneurs”. You’ll have to browse around a little bit to find the ones of the Weber brothers.