A successful startup needs more than a great idea — it also needs a solid business plan and, perhaps most importantly, funding. More than half of all new businesses fail within five years due to a lack of one or the other.
For two startups nurtured at Central Michigan University, the future may be a little brighter. Elemental and Drone the News, both winning teams in the 2018 New Venture Competition, just completed a six-week summer accelerator program designed to help them stay successful in the years ahead.
The inaugural summer accelerator program matched teams with mentors from Automation Alley, Incuba8, Foster Swift Collins & Smith PC, Phobio, BlueWater Angels and CMU's entrepreneur-in-residence Curt White, chief technology officer with ViaClean Technologies.
Teams had daily accountability calls, weekly workshops and one-on-one meetings with experts in specific areas of business. The high-intensity mentoring program provided on-campus workspace, technical support and a stipend for living expenses.
At its close, the experience also came with a $5,000 business boost for both teams from sponsor Automation Alley.
Members of both teams gave a final pitch to investors at a dinner to close the accelerator.
A wake-up call from experts
For Zach Huffman and Tim Harkleroad, both recent alumni of CMU's electronic media studies graduate degree program, the accelerator was an opportunity to look critically at their business plan for Drone the News. Although it performed successfully during the spring competition, it needed some serious adjustments for implementation.
"On day one, the mentors told us we were trying to do too much. They feared we wouldn't be able to provide our customers with exceptional service because we were stretching ourselves too thin," Huffman said.
With help from their mentors, the team completely overhauled its business model, cutting down from five priority areas to just one.
"Focusing on the comprehensive commercial drone training course is a big change that will be much more beneficial for Drone the News," Harkleroad said.
The team behind Elemental, a thermal bra for breast cancer survivors, also thought it had a pretty solid business plan in place. Sue Wroblewski, a graduate student in apparel production development and merchandising technology, said team members quickly learned how much they hadn't considered.
"We've had generous donations of time from business leaders with experience in legal, marketing, accounting, raising equity, website development and anything else we suggested we needed to work on. Now we have multiple pages of high-level 'must-do' tasks," she said.
Bracing for an entrepreneurial boom
Both teams had daily conference calls with their core mentor, entrepreneur Stephen Wakeling. The founder and CEO of Phobio believes CMU student entrepreneurs are positioning Michigan for a huge economic boost.
"Michigan is well-positioned to be a garden of disruption, where new ideas can grow and prosper. It's fertile ground for myriad startup industries, from tech to agriculture. All we need to do is provide some support to these bright, creative visionaries to experience another boom."
Wakeling recalled the support he received in the early stages of his business and was excited to offer the same guidance and encouragement to the CMU teams.
"One thing that sets the CMU entrepreneurs apart is their tenacity. I've watched them take their ideas and grow them into viable products — and it hasn't been easy for them. They have processed the feedback and criticism they've received without losing momentum," he said.
"They are so passionate and hardworking, and they won't let anything stop them. It's really inspiring."
Ready. Set. Launch.
As a final exercise, both teams presented one last pitch at a dinner June 21.
Members of the core mentoring team, sponsors from the New Venture Competition, local entrepreneurs and business leaders attended and participated in the Q & A session following the pitches.
One of the accelerator goals is to make the teams more "investor ready," and both teams secured additional investment during the program. They also made connections they hope will help in the next phase of their businesses.
With its new business model in place, Drone the News plans to begin trial runs of its training program and hopes to be ready to serve customers in August.
"We've confirmed that our market has a need for the training we're providing, and we look forward to helping our customers get their videos off the ground," Huffman said.
For Elemental, the next step is to roll out a marketing plan. Wroblewski said the group plans to reach out to physicians, cancer support networks, insurance companies and direct customers.