Creating a startup company is a little like leaving the path on a hike and breaking new trail through the woods, said Erik Boles, the founder and CEO of Gearmunk. Boles, who has initiated five startups in the last 20 years, said it’s not for the faint of heart.
“You’re venturing into the unknown. There’s no trail map, so you’re breaking new ground,” he said. “You might come up on an oasis or it might be a 300-foot cliff.”
Lots of people aren’t comfortable dealing with uncharted territory, so not everyone is cut out to be an entrepreneur, said Lisa Tessarowicz, CEO of Epicentral Coworking, a space in downtown Colorado Springs that housed Boles’ business when Gearmunk started three years ago.
“There is some wiring to it,” she said.
Tessarowicz said she’s invested in about 15 startup companies and 25 small businesses. She knows the odds are often against success for startup owners.
“As an investor, we’re led to believe seven out of 10 startups will bomb,” she said. “Two might break even and one might make serious money. I’ve definitely lost money, and I’ve also been paid back. None have made serious money yet.”
Boles, who has seven employees, has not turned a profit — but could be on the cusp, he said.
“Most everybody who starts a venture does it with something they’re good at and have a passion about,” Boles said. “I’m a technology and data security guy.”
He also has a fondness for the outdoors, which led to Gearmunk. The company provides an outdoor gear discovery and education platform that rewards users who review equipment with samples of gear. It also provides consumer profiles to the brands involved.
“We have nearly 100,000 registered users and 32 brands now,” Boles said. “We go after small cottage brands because they struggle to get a voice.”
So what makes for a successful startup business?
“A trait of being a good entrepreneur is being ahead of the market,” Boles said. “Another mark is actually knowing if your idea will work — people have to want your product and know it’s out there. Plus, the timing and location have to be right.
“You’ve got to have the knowledge, but that’s secondary. You’ve got to have fortitude because bad things will happen. You have to be able to ignore everybody — from your mom and dad to your friends and other entrepreneurs — when you know it’s the right idea.”
It’s a good idea to have the spouse on board, too.
“Make sure your family buys into your idea,” Boles said. “The number of startup entrepreneurs who get divorced is ridiculous.”
In Colorado Springs, entrepreneurs have additional assistance, thanks to Peak Startup, a nonprofit set up to provide advice and guidance to startups — as well as a place that allows new entrepreneurs to pitch their idea to experienced business owners. Through executive director Michelle Parvinrouh, the organization provides mentoring to entrepreneurs through events like Colorado Springs Startup Weekend, Nov. 10-12.
FRUSTRATION LEADS TO STARTUP
Planning events while still in the Army led to Capt. Luke Hutchison’s startup idea. Hutchison created Perfect Venue (www.perfectvenue.com) after being frustrated by the difficulty in booking a meeting place for his groups.
Hutchison has no employees and hasn’t generated revenue, but is spending his own money on contract labor. He hopes to have unpaid interns by January and will take on an investor-partner when the timing is right, he said.
Hutchison won a Startup Weekend competition in Fort Collins in February but had to put his business on hold while tending to Army duties. He won the pre-revenue Peak Startup Pitch Night in the Springs on Aug. 24.
Hutchison is an Army infantry officer and platoon leader at Fort Carson. As the company executive officer, he is responsible for planning a handful of events for about 100 people, and did one event for 800 people.
“I also organize a monthly meet-up called the ‘Colorado Springs Drink & Think’ for about 20 civilian and military innovators,” he said. “All of those events were in the Springs and I found it to always be a hassle to find and book a venue for our events. That frustration is what led me to the idea of creating an integrated website and app to make it easy to find and book venues for events.”
He’s focusing on event sizes of 20 to 200 people and has 100 venues and about 400 rooms available. Of the venues, 13 are considered “launch sponsors” where a customer can receive a discounted price.
Hutchison is transitioning out of the Army. He’s engaged and will be married in April in Estes Park. Ironically, his fiancée and family had difficulty understanding the value of his startup business — until they were looking for a spot for the rehearsal dinner.
“My fiancée and family were skeptical but going through the process of finding a spot for 40 people for the dinner was an eye-opener for them,” Hutchison said. “It showed them the problem I was trying to explain. They realized, ‘Oh, Luke’s not crazy.’”
‘A QUESTION OF RISK’
Tessarowicz said funding is one of the hardest parts of creating a startup business.
“People will use individual savings or retirement, or go into personal debt with credit cards to do their startup,” she said. “It’s a question of risk and not everybody is comfortable with that level of risk. Some people, though, will give up everything to try their idea.”
If they jump off the cliff, she said, it’s important to have support.
“They’ll need their family on board, and still it’s a lonely venture,” she said. “There will be a lot of ups and downs.
“One of the great things about Epicentral is that is provides community support — emotional and sometimes financial,” Tessarowicz said. “A lot of the people there will hire each other as advisers or even as employees. We’ve probably had 10 hired as employees and 50 as consultants or contractors; we have a lot of graphic designers who rent space. And probably five major projects have come out of there.”
Many startup business owners don’t realize how much they don’t know when they begin, Boles said.
“You’ve got to be the finance person, the sales person, the human resources person, the accountant,” he said. “If you ever want to know what it’s like to be a manic depressive, start a company. You’ll be ecstatic one minute knowing how good it’s going to be and almost crazy the next wondering if it’ll actually work.”