Despite the fact that Alabama ranks on the high side of the low end of states for entrepreneurship, the idea of starting new businesses and creating new innovation never seems to be far from the minds of businesspeople in Birmingham.
With all the colleges, business organizations and political entities developing programming around the concept that starting and running new businesses is the key to growing the local economy, you might never guess that Alabama ranks 30th out of the 50 states in innovation and entrepreneurship, according to the U.S. Chamber of Commerce Foundation.
But maybe that’s the point. A lot of people seem to believe the state can do better.
The Birmingham-based Economic Development Partnership of Alabama, through its Alabama Launchpad organization, is putting on a big show next week all about growing jobs through entrepreneurship and innovation. The “4th Annual Alabama Launchpad Innovation and Entrepreneurship Conference,” billed as “the only kind in the state to bring together government leaders, entrepreneurs, university presidents and business chiefs in one venue, will highlight entrepreneurial and innovation successes across the state,” according to a news release announcing the event.
“We’re an economic development organization, and as such our primary mission is to create jobs in Alabama,” said Greg Sheek, head of Alabama Launchpad. “Alabama Launchpad’s slice in that is creating jobs through entrepreneurship and encouraging innovation across all industry, whether you’re talking about a startup or you’re talking about an existing company innovating their products or adding new products. We’re kind of playing in that space. But the emphasis is on creating jobs through those activities.”
The conference, which will be held Sept. 25 and 26 at WorkPlay and the Birmingham-Jefferson Convention Complex, is part of the EDPA’s goal to help Alabamians with like minds — entrepreneurially speaking — work nicely together. Throughout the state, Sheek said, there are people and entities working on similar ideas that could benefit if they worked together in some way.
“We saw a kind of a gap in the entrepreneurship feeding system across the state…what’s going on in Huntsville or Tuscaloosa or Birmingham doesn’t have connections to people doing similar things in Mobile or in Camden, Alabama, or Scottsboro. There were just pockets of things going on. They’re all doing similar things for their individual communities. But they’re not collaborating with one another, sharing ideas or trying to solve challenges that they might be facing.”
To Sheek’s point, one only has to look at Birmingham to see that there are many separate organizations promoting entrepreneurship culture — separately.
For instance, the University of Alabama at Birmingham has an Institute for Innovation and Entrepreneurship, Samford University’s Brock School of Business offers a major in entrepreneurship, Birmingham-Southern College has an endowed Entrepreneurship Scholars Program and Miles College offers a class in entrepreneurship through its Business and Accounting Division.
UAB, a major partner in Birmingham’s Innovation Depot incubator — which is largely pointed toward technology businesses — is increasingly focusing research efforts on commercial applications and collaborations with organizations like the Birmingham Business Alliance. For example, last year, the university won a $600,000 grant from the National Science Foundation to, among other things, build and outfit a diamond micro-fabrication laboratory for creating diamond-based sensors, diamond-coated knee joints and diamond-coated media for high powered lasers. The idea, according to physics professor Dr. Yogesh Vohra, is to move the ideas toward commercialization.
The BSC Entrepreneurship Scholars program is aimed at exposing “students to the concept of entrepreneurship, teaches them what to expect as an entrepreneur, and helps them to develop skills to succeed,” according to Kevin Stump, chief executive officer of Interconn Resources, a BSC alum who, along with his wife Jane, endowed the program. As quoted on the college’s website, Stump said the program is to teach students “that entrepreneurship includes taking risks and that risk taking can be both exciting and rewarding if it is approached in the right way.”
Business organizations, not surprisingly, are also actively promoting entrepreneurship in Birmingham. REV Birmingham’s REV-BIZ division offers workshops and coaching to, according to their website, “help local businesses hone their business plans, obtain financing and/or incentives, prepare for and present to the City’s Design Review process, search for commercial property, navigate health department regulations and connect with other area entrepreneurs and small business owners in dynamic networking environments.”
Last week’s edition of Weld featured a story about CO.STARTERS, a program being sponsored primarily by the Cultural Alliance of Greater Birmingham, in partnership with REV and MAKEbhm, and “designed to give advice to would-be business owners, those in the early stages of developing a business or owners who are considering a change in their business plan.” The program brings nascent entrepreneurs together with a variety of already established businesspeople who can offer advice, mentoring and the perspective of those who have already been where the neophytes are going.
The business entities in Birmingham promoting entrepreneurship also include those specialized by race and gender, as well. The group called Alabama Women in Business “provides women entrepreneurs in diverse sectors with opportunities to interact and develop strategic alliances,” as noted on their website. A nonprofit, “the corporation encourages, supports and educates women who own and operate businesses by both improving the environment for women entrepreneurs in small and growing businesses and supporting women in established businesses,” AWIB says.
The Alabama State Black Chamber of Commerce, part of a network of likeminded groups including the Greater Birmingham Black Chamber of Commerce, had its own “2014 Entrepreneurs and Innovators Conference” here in June. Boasting 20 speakers, the ASBCC conference touted an ethnically diverse array of “innovative entrepreneurs and business leaders, bestselling authors, technology experts and creative gurus offer[ing] conference goers…two days of inspiration and insights, networking and learning, all focused on driving economic growth in Alabama through entrepreneurial activity and financial business prosperity.”
All that energy and focus on entrepreneurship shooting out in all directions in Birmingham – but does it all ever come together to enrich the entire climate for entrepreneurs and businesses throughout the state? According to Sheek, that’s what the Alabama Launchpad Conference is all about.
Others working on the same thing
“I would say we’re working parallel,” Sheek said. “The entrepreneurs, the programs have a local emphasis and draw and resources because at the end of the day, we want the programs to be in the community that’s best suited for them, and that’s usually the community that fostered it, created it and maybe the environment that kind of organization can thrive. And so they’re very locally focused.”
Sheek’s organization tries to draw companies out and persuade them they can be “successful here. We have in our case funding resources to help you build that business, then locally, these programs like CO.STARTERS and other chambers do different things where they will help you find maybe a mentor to talk to you about building the business model or overcoming some sort of challenge about running a startup or a small business. They also have resources related to more services, whether it’s accounting for the employees, HR assistance to try and identify employees, screen them and attract them to your community if there’re not already there.”
His organization is designed to bring those community efforts together, or at least build an awareness of them in various other places around the state. “We saw an opportunity to bring those people doing that in Huntsville, those people doing that in Auburn and Mobile,in one place to talk about how we all relate to one another,” Sheek said. “We’re not really trying to get on anyone’s turf. We’re trying to build up for our own community, and there’s some things that we as Alabama maybe can collaborate on that makes us all stronger, but gets the profile of Alabama as an innovation/entrepreneurship-supporting state kind of some collective identity or some collective strength.”
Working toward unity
Sheek said that the conference is “really designed to bring people doing similar work supporting entrepreneurs, the entrepreneurs themselves, the universities and the state leadership together. We’re all, in different ways, supporting job creation through entrepreneurship, innovation, but there wasn’t a clear opportunity for them to all come together, network with one another, be inspired by some leaders in this field.
“So that’s why we bring in some big-name speakers like Peter Diamandis to talk about fueling more innovation, to talk about what does that look like in Alabama. These are people who are all playing some sort of part in that.”
The keynote speaker for the conference, Diamandis was ranked earlier this year by the editors of Fortune magazine as number 43 among the world’s 50 greatest leaders. He is the chief executive officer of the X Prize Foundation, which hosts competitions offering $10 million to solve problems on a global scale, as well as, according to Fortune, the founder of 14 other companies.
The Alabama Launchpad conference will offer more than an inspiring speech from a celebrity entrepreneur, Sheek said. “This year, we’ve added a mentoring session and we’ve invited some really accomplished entrepreneurs. We’ve invited university presidents, CEOs of companies from around the state, some cyber security experts, and they’ve all volunteered their time to have one-on-one meetings with attendees at the conference.
“So if you wanted to talk to UAB’s president, Ray Watts, he’ll be there. If you’re an attendee, you can request an appointment with Dr. Watts and talk to him about your company, about your product. Perhaps there might be some opportunity to explore partnership with UAB,” he said.
In addition to that, the conference will provide an opportunity to meet 30 people whom Sheek called “serial entrepreneurs,” people who “run multiple businesses or start multiple businesses in their careers.” These startup experts will also share their knowledge, he said.
“They are busy, busy people,” Sheek said. “If you don’t know them, if you haven’t had the chance to talk with them, [or] you’ve heard of them but never been able to get an appointment with them, they’re going to be in one room and you’re going to be able to get an appointment with them and talk with them about ‘How did you accomplish what you accomplished? How can I partner with you?’ The field is wide open for what they can talk about.”
Another feature of the conference will be the Innovation Showcase, this year highlighting 18 Alabama companies (as of this writing) who have either started a new product or demonstrated some innovation in their business model, Sheek said.
A major draw for some to the conference will also be its kickoff event: the culmination of an ongoing Shark Tank-style competition, which will play out at the event’s beginning and finish off on Friday, Sheek said.
Thirteen competitors began the competition. By Sept. 25, there will be only six left standing. “They stand up. They’ve got 10 minutes to give their pitch and then the judges can — for lack of a better way to say it — they get to grill them about their business model, about the market,” and about how the proffered product will meet a need or solve challenges facing it, Sheek said. “So they’re going to ask them all sorts of questions related to the business. And then the governor will actually make the announcement for us on Friday.”
That sort of competition looks back at how Alabama Launchpad began. “We started solely as a startup competition run once a year, and we’ve grown that to now we are running three competitions in a year, with about a half million dollars in startup funds available to award in that year,” Sheek said. Since beginning eight years ago, Alabama Launchpad has made investments in companies that have created at least 221 jobs and attracted $15 million in additional funding from other sources – both of which, Sheek said, are “lowball estimates.”
During the first five years of its existence Alabama Launchpad awarded grants in tiers, first place winning $100,000, second $50,000, third $25,000. “We’ve altered our award structure so we no longer have…a first place, second place, third place. We’re more investing in a portfolio style so we make multiple investments,” Sheek said. “So it’s not uncommon now to have four or five winners in a round when we have seven in the competition at the finale stage. All our awards now are based on a budget presented by the startups, so they tell us, ‘I need x number of thousand dollars to complete my prototype,’ or ‘I need money to complete the programming of my app,’ or ‘launch my iPhone version because I’ve got the Android already.’ But they tell us a very specific milestone that they are trying to complete right now and then we make an award based on those budgets.”
Some competitors get all their funding, others get a portion. “We had one team that was awarded $8,000, and that was 100 percent of his request. And we’ve had a team in the same round was awarded $54,000 and that was probably a third of what they were asking for in terms of their budget,” Sheek said. “We did make assessments based on our confidence in their ability to complete whatever they were proposing. In some instances we tried to make some investments to complete one whole milestone as opposed to three or four milestones.”
A winner from last year’s competition, which will make a presentation at the conference this year, is Bessemer-based BLOX Medical Modules, which builds, according to its website, “prefabricated medical modules.”
It’s more exciting than it may sound, according to Sheek. “They actually assemble a module at a plant — an old, old Pullman [railroad car] factory. Inside there, there’s this modern production line they’ve set up of building hospital bathrooms, hospital headwalls and foot walls inside this great big thing that used to produce rail cars. A big rusty old building, but it’s still intact. It has cranes and some unique features that make their operation kind of fit inside this old building. …
“It’s a really neat thing to see,” he continued. “If you think about a car production facility where you’d have cars traveling down a line, that’s the kind of concept, but it’s a modular building. It’s a room on rails that they’re moving along this line and adding what you would think about in a physical construction — its floor, ceiling, ceiling tiles, tiles, faucets, fixtures. …
“They’re building that all into this self-contained module that they literally drop into the construction site. When the timing is right on the physical construction site, they bring these in on a truck and set it in and it all hooks up like it’s supposed to, and you never know when the whole building is complete that this patient bathroom is actually a separate module that was dropped in.”
According to Sheek, that kind of innovation is growing all over the state. The Alabama Launchpad Conference aims to let everybody in on the secret. “Kind of an underlying part of what the conference is trying to do is to weave together in a single fabric all these efforts at entrepreneurship that are going on already in Alabama,” Sheek said, “connecting them, inspiring them, evolving them to take their efforts to the next level and kind of feel that they’re part of a community, which is innovation in Alabama.”
The fee for the Alabama Launchpad Innovation and Entrepreneurship Conference is $250 for the entire event or $100 just for the dinner on Thursday night. For more information, visit alabamalaunchpad.com.