Jack McGowan said he gets a good sense soon after meeting with the founders of a startup company whether they have what it takes to succeed in business.
It happened back in 2000 when he was a coach in the first Henry A. Panasci Jr. Entrepreneurship Awards Competition at the University at Buffalo. The company he worked with, then known as Triad College Market Research Group, had the idea to survey college students for universities and corporations.
Founders Eric Reich, Michael Weisman, Karen Woodman and Matthew Worden won $25,000 in the contest. The startup changed its name to Student Voice, and again to Campus Labs, before it was acquired for $40 million by Connecticut-based Higher One Holdings.
“They were focused, they communicated well. It was about making money – not greed making money, but the necessity of making money. And they were hard workers, they were decisive,” said McGowan, who is project manager for Insyte Consulting.
McGowan, interestingly, never started a small business of his own. The native of Buffalo’s Bailey-East Delavan neighborhood earned an undergraduate degree at Cornell and an MBA at the University at Buffalo before pursuing a career in banking.
He now works as an adviser to manufacturing and technology companies that need assistance in business and strategic planning and finances. McGowan also is director of the Western New York Venture Association and its Buffalo Angels, an angel investor forum and network.
He regularly volunteers with organizations and events that aid entrepreneurs and startups, such as serving as moderator at last month’s Bright Buffalo Niagara entrepreneur expo. McGowan worked ahead of time with the company founders to help them perfect their pitches to potential investors.
At the event at the Hotel@The Lafayette, McGowan received the “Bright Partner of the Year” award from Norma J. Nowak, the scientist and founder of Empire Genomics, who praised him as a friend and mentor.
Q: What is your impression of the startup scene in Buffalo?
A: Within the last five years, there’s been a lot more activity on the startup side on multiple fronts. In terms of organizations, or entities, that are working to serve startups, UB has got more things they’re doing now. They’ve got Student Sandbox, they’ve got their eLab program. You’ve got new entities like Z80 Labs, 43North and VCAMP. So there are new players coming in as well. And there’s more money behind it. ... And then you’ve got what’s really the most important piece, you’ve got private individuals who are saying I’m either considering starting up a business, or I’m going to invest in a business as an angel investor. So all the pieces have been growing and starting to come together. It takes a while, obviously, for these things to mature. We’re still kind of early compared to a lot of regions and it takes a while for good companies to mature and create more jobs and, hopefully, exit. And then the founders go back and do it again. But we’re off to what I think is a heartening start in that process.
Q: You mentioned the organizations that didn’t exist five years ago. Why are they so crucial to support fledgling companies?
A: It just takes resources. Back 20 years ago when we were doing this, when we were running the incubator on Sweet Home Road in collaboration with UB, there really weren’t many other people who were helping these startups. It’s more than a one-person or a two-person job. You need different perspectives. If you’re going to build a community, an ecosystem, then there needs to be multiple players to either fill various roles or just to handle the volume. And so much of it is contacts, too. It may be that somebody over at UB may have the right connection for the startup, connection to a business who might collaborate with the startup, connection to a technologist, or a customer. The bigger that network is, hopefully, the more effective it will be.
Q: At last month’s Bright Buffalo Niagara, 32 company executives made pitches. Did any of them convince you they have a billion-dollar idea?
A: I’m less focused on billion-dollar ideas. I don’t chase unicorns. Ultimately, it would be wonderful if it happened. But I’m not worried about the next Facebook. I’m just more focused on, let’s build a company that has a product and can generate sales and can grow and be meaningful. I think there were a number of them that have that potential.
Q: What are the common mistakes you see entrepreneurs make when trying to get their businesses off the ground?
A: I think the reluctance to engage with customers or potential customers early on. They’re afraid that the product’s not ready yet. And many times it’s not ready for sale, but you still need to engage with potential users to find out if they really need what you’re planning to build. Because otherwise, you’re wasting a lot of time and money if you go down a path that nobody really cares about from a customer standpoint. And I place a lot of emphasis on that. ... It’s also important because, on the funding side, most investors don’t invest in ideas, either. They’re looking for that market validation. That you’ve engaged with customers, that you’re not afraid to do that, and you’ve gotten positive feedback, hopefully to the point that you’ve gotten sales.
Q: Is the TV show “Shark Tank” realistic?
A: There are things to take away from it. People don’t make decisions in 10 minutes. They don’t fight each other over the deal. There’s more of the deal to go around than there are investors, in most cases. And sometimes they make decisions based on emotion or because the person’s from Pittsburgh, or whatever. But usually the presenter gets up there with the sharks and they talk about the product and they cut to the chase. OK, so how much have you sold? And they get into the business reasons. So there are good takeaways.
Q: Is there enough capital in the area to fund promising ideas?
A: There’s less money than we need, but that’s the case just about everywhere. So you need to work harder for it. You need to rise above the rest in order to get the money, and it depends on the industry. If it’s drug development, and you need tens of millions, certainly, that money is not here. If you can find a way to stage it – hopefully, we’re going to see some companies that are going to be able to be successful in that industry. That’s why you need to go out and you need to talk to people who are knowledgable and have the resources to fund those. Athenex, I mean, they did it. It can be done.
Q: You work with small businesses and entrepreneurs. Why is so much of the power structure in Buffalo, and in Albany, still seemingly wedded to the idea that we need giant silver-bullet projects to revive the economy?
A: Well, there’s more immediacy. Once SolarCity comes online, the actual number may vary, but it’s still going to be at least hundreds of jobs. Startups take time. So there are more of them. But, still, most of the startups that have started in the last few years are still, if they’re doing well, they’re employing tens of people. So I can’t speak for them, but I would assume that’s one of the reasons the focus is on larger projects.