Thursday, June 10, 2010, 11:00pm CDT |
Modified: June 10, 2010, 11:00 PM
New Capital Factory class teaming up
When hundreds of startups applied to be in this year’s class at 
Capital Factory, which runs a 10-week accelerator program
during the summer for early-stage tech startups, the people choosing
the five selectees were looking less at their companies’ ideas and more
at the people responsible for making them work.
“Ideas are a dime a dozen,” said Bryan Menell, one of three directors
and 20 mentors at Austin-based Capital
Factory. “The value is not in the idea, it is in the team.”
It’s a lesson all would-be entrepreneurs should learn, said Menell,
who has founded a handful of companies and advises others.
Having a great idea for a product or business is the least important
part of launching a startup, fellow Capital Factory Director Joshua Baer
said, because startups should be focused on finding voids in their
markets and developing creative ways to attack them.
“A different way of saying that is that startups are trying to solve a
hard problem,” said Baer, founder and CEO of Austin-based OtherInbox. “Inherently, the idea is wrong. I want a
great team that is smart, driven and excited about solving the problem.”
This year, Capital Factory selected three Texas companies and two
from other states for the second class of its summer entrepreneurial
mentoring program, which began June 1. Participants receive up to
$20,000 in seed capital, office space if wanted, various business
services and weekly mentoring. The program concludes with a demo day in
September when the companies present their business plans to
professional investors and fellow entrepreneurs at the AT&T Conference Center at the University of Texas.
This year’s participants include Austin-based Hurricane Party, which operates a location-based social
networking application designed to enable users to create, manage and
discover events; and Houston-based RecycleMatch, an online marketplace designed to connect
companies that have waste material with companies seeking the same type
of material.
Both companies have strong management teams who can improve and
refine ideas into marketable realities, Menell and Baer said.
At Hurricane Party, 27-year-old Rene Pinnell met his two cohorts
through a three-day networking and brainstorming event for students at
the University of Texas. Hurricane is his brainchild. And after trying
before to raise it with others, Pinnell said he is keenly aware of the
difference a solid team dynamic makes.
Pinnell’s advice to entrepreneurs is to approach a startup with the
same seriousness as getting married — don’t do it with someone you don’t
want to spend your life with.
“You have to really trust [your colleagues]. You have to really
respect them. You have to like them and want to spend time with them
after the workday is over,” he said. “If you can’t, there is not the
right chemistry.”
At RecycleMatch, the partnership involves actual marriage, although
not to each other. Chad Farrell, 43, co-founded the business with his
sister-in-law, Brooke Betts Farrell, 40.
“People were concerned that it would be hard for us to work
together,” Chad Farrell said. “For me, it has been better because there
is a level of trust that she has the same interest in our family as a
whole.”
Having already launched successful startups, Farrell said he too can
appreciate a team dynamic unlike he has had before.
One might think working with friends or with family would cause
members to tiptoe around each other or shun robust conversations
involving the company.
But Farrell said that’s not the case when there’s trust.
“If you are on a team where the members have different agendas and
you don’t trust each other, it is harder to have frank conversations,”
Farrell said. In these siblings-in-laws’ case, “we hold each other
accountable. There is a back-and-forth.”
For budding business owners who are still searching for those special
partners, it helps to look where they congregate, Capital Factory
directors said.
For example, if a business needs someone with superior technology
skills, don’t hang out at general entrepreneurial events. Instead, seek
skill-centric groups and get people excited about your idea, they said.
In picking startups for Capital Factory, directors typically look for
two people, Mennell said: “One person needs to be the builder of
products and technology, and the other needs to be able to sell the
product. … [Later], other skills and roles become important, but to get
off the ground, solo entrepreneurs have a hard time finding success.”
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