Q: How would you describe the current state of entrepreneurship in Birmingham?
Matthew Mazzei (Associate Professor and Chair in Entrepreneurship, Samford University Brock School of Business): Encouraging and supportive. I see a strong and growing entrepreneurial ecosystem in Birmingham and the surrounding communities. The city is thriving, and the cost of living is relatively low. We have great opportunity across the city, with many academic institutions attracting and developing new talent every year. Perhaps most importantly, there is an obvious and honest passion for economic development throughout the region. Civic leaders, successful entrepreneurs, educators and so many more envision a greater tomorrow and see the current and future possibilities of what Birmingham can offer. Those unfamiliar with our city would likely be surprised at the vibrancy and plentiful resources available here.
Theresa M. Welbourne (Professor in Entrepreneurship, University of Alabama Culverhouse College of Business): It may be easier to describe the current state of entrepreneurship in Alabama, because there is so much happening in many parts of the state. Multiple cities in the state now have their own incubators, celebrate Global Entrepreneurship Week, have university-based programs teaching entrepreneurship, are supporting startups and growth companies, and are helping bring startup financing and investments to Alabama. If we want companies to start and stay, then we all need to help them succeed, and bringing resources to all entrepreneurs is key to continued growth. Innovate Alabama launched a video that is a great starting point to the innovations happening in the state. Then come to Tuscaloosa, and we can give you a tour of our own incubator and accelerator space, The EDGE. This 26,300-square-foot building is a partnership with the City of Tuscaloosa, the Chamber of Commerce of West Alabama, and the Alabama Entrepreneurship Institute (AEI) at The University of Alabama. It’s one example of the types of partnerships that are lifting the state entrepreneurial ecosystem. The EDGE partners with other incubators in the state – Innovation Depot in Birmingham, Innovation Portal in Mobile, and IGNITE! in Birmingham – and we are working to connect our entrepreneurs to each other, another important aspect of growing an ecosystem.
Q: How can we help people who are starting businesses during the pandemic succeed?
Joshua Sahib (Managing Director of the Lowder Center for Family Business and Entrepreneurship, Auburn University): As entrepreneurial resource providers, we should first recognize the broad tapestry of businesses that are being started. Often these organizations focus on high-growth companies, and that approach can leave smaller businesses behind. Next, we need to tailor our services – programs, trainings, etc. – to the practical needs of the entrepreneurs we serve. For example, covering basic practices for tracking cashflow is likely much more relevant to an entrepreneur launching a lawn care business than an extensive training covering financial statements and QuickBooks. We should also continue to cultivate an entrepreneurial community, so that budding entrepreneurs have a network they can rely on for support.
Welbourne: Whether these firms started before, during or after the pandemic, they all need support. We all can help provide coaching and mentoring. I see coaching as shorter-term assistance to help a person or startup get to their next goal. We ask coaches, for example, to help a team prepare for a business plan presentation, which may be for additional funding or for a competition. In coaching engagements, we can match startups with the types of coaches who can provide the skills they need to learn or the help they need. Teams are also looking for mentors who are interested in the new venture and the concept, and these mentors tend to stay with the business for a longer period of time. For those working with startups as coaches or mentors, it is important to know where to find help for them, and to help them expand their networks. Becoming involved with the local incubators can help anyone who wants to meet startups, coaches or faculty, and help solve the evolving problems we all need to conquer as we continue to grow our entrepreneurial ecosystems.
Mazzei: Turbulent times can actually be healthy for entrepreneurship. While we can’t dispute or overlook the threats, there are always opportunities that accompany major crises. Therefore, we need to encourage those with entrepreneurial aspirations to step up to solve problems. Financing can be challenging, but there are opportunities to bootstrap and develop partnerships if entrepreneurs are diligent, cost conscious and prioritize effectively
Q: How would you describe the current state of the capital environment in Birmingham, particularly on the heels of some recent notable exits / capital raises?
Welbourne: There certainly is improvement, but we have a lot more work to do. Startups are still tempted to leave the state to find more favorable financing. It’s easier for our companies that are further along to find capital, but it is very difficult for earlier-stage companies to obtain their smaller and earlier rounds of funding of $50,000 to $500,000. Investments at this stage are less, but they are also higher risk because these companies often do not have customers, are still evolving their value proposition, and are in high need of funding to move to the next stage of their growth. I would like to see more angel funds focus on earlier-stage investments so we can help assure stronger launches. Also, as we add more accelerator programs, we need funding, sponsors, and even more coaches to make these programs successful. In order to do our share in bringing funding to startups, we kicked off a $1 million crowdfunding challenge. AEI is seeking donations from corporations and individuals, and the funding goes into a tax-deductible restricted gift account at The University of Alabama.
Q: What types of local resources / professional service firms should entrepreneurs seek out to help them achieve their goals?
Mazzei: One of the more important resources for a new entrepreneur is a solid and trustworthy mentor. Finding the right mentor may not be as easy as one might think. You need to find someone with the necessary experience, but also the right balance of encouragement and honesty. Mentors need to provide critical feedback, yet also know the right times to listen, support and offer a healthy dose of optimism. And, of course, it is always helpful to utilize a network of accountants, attorneys and other service professionals to work with on various components of your business. In Samford’s Brock School of Business, we are grateful to have access to many local and regional professionals who dedicate their time to mentor students. Our students truly thrive because of these mentorships, and many come out of our program launching their business ideas full-time or as part of a secondary income stream.
Sahib: It is common for entrepreneurs to need guidance regarding legal, accounting and financial issues. Therefore, forming a relationship with a lawyer, accountant and banker is important. Entrepreneurs should strive to work with licensed experts in these fields who have experience working with startup companies. More broadly speaking, entrepreneurs should play to their strengths. If they are not highly skilled in graphic design, then they are better off hiring someone to create their logo instead of trying to create it themselves.
Welbourne: Connect with any local incubators, as they usually have information on resources, meetings, networking events, competitions and accelerators that may help. Also, the local Small Business Development Center offices provide lots of resources and coaching in addition to helping entrepreneurs find funding for their businesses. Don’t forget to reach out to the local universities. Not only do they provide educational opportunities, but also student interns who are seeking experience with startups and growth companies. Local chambers of commerce also are a great starting point for any entrepreneurs.
Q: What does your company or organization do to help entrepreneurs thrive?
Sahib: The Lowder Center for Family Business and Entrepreneurship has two areas of focus. One is primarily geared toward the student population at Auburn University. This involves getting more students interested in entrepreneurship and fostering an environment where new business ideas can thrive. This is accomplished through my role as faculty advisor for the campus entrepreneurship club, and in teaching the intro to entrepreneurship course. As the student businesses further develop, they are referred to my counterpart with the New Venture Accelerator for additional support in their journey of entrepreneurial growth. Another area of focus is supporting family businesses from the East Alabama community, and I am personally passionate about cultivating micro-businesses in the area. This summer we are launching a new workshop series, Jumpstart East Alabama, with a particular focus on using entrepreneurship to help disadvantaged individuals launch and grow micro-businesses.
Welbourne: I am a professor in the Culverhouse College of Business as well as the executive director of the Alabama Entrepreneurship Institute. In these roles, I work with a team that creates and delivers numerous educational programs on campus for students, faculty, and staff. We also manage The EDGE, which is the local incubator. The EDGE and our work at AEI serve not only university employees and alumni but also our local community and the State. Our strategy focuses on three key areas of work: we find innovators and entrepreneurs, we assist them in starting their businesses, and we provide resources to grow their organizations. Over the last few years, we started an annual River Pitch competition for the university and local community. Last year we had about 150 people attend and close to 60 people pitch. We provide 10 different $1,000 prizes for the best pitch in each of the ten booths where people do their pitches. We also provide coaching and a variety of workshops to help develop their business ideas and finalize business plans, which then they can use for another round of competitions. On an annual basis we offer a student business plan competition, which has had between 40 and 50 teams competing for what is now an overall prize pool of $100,000. In addition, we have a pre-accelerator program that runs in the summer, the Crimson Entrepreneurship Academy). I love seeing the success of our teams. Many that are further along act as role models for new entrepreneurs. It is a lot easier to build your own confidence when you can connect with others who succeeded.
Mazzei: In Samford’s Brock School of Business, we aim to develop well-prepared young professionals who can thrive in many dynamic and competitive environments. Our programs rate well nationally for student engagement, including No. 1 in the nation by The Wall Street Journal/Times Higher Education. Nearly 100 percent of our undergraduate students complete internships, offering them tremendous opportunity to gain experience and build industry relationships. More specifically to entrepreneurship, we offer a major course of study, a minor for non-business majors, and a concentration in social entrepreneurship. Our curriculum spans multiple levels of analysis and crosses organizational disciplines. We discuss the prominent characteristics of an individual’s entrepreneurial mindset, such as curiosity, connection, and motivation. We examine corporate innovation and intrapreneurship, delving into an organization’s entrepreneurial strategic orientation and discussing topics such as culture, team building, and organizational structure. Our World of Business course gives freshmen students an early introduction to entrepreneurship. Through our capstone entrepreneurship course, students are provided funding to start and run a company. We have a variety of internship opportunities, where students work with local entrepreneurs in start-up environments. Additionally, our Samford Startup student-led business incubator is available to any student on Samford’s campus, regardless of major. Through this immersive program, student entrepreneurs are provided office space, networking opportunities, mentors and strategic consultation to start, organize and grow their business. Each of these components offer valuable and practical entrepreneurial experience.
Q: Do you have a specific example of how your company or another local company has helped an entrepreneur succeed?
Welbourne: Our community competition, The Art Garage, is a big success. I first met Joanna Lemmon when she entered the pitch competition, and then later she competed in the community business plan competition. After winning, and despite COVID-19 putting affecting so many businesses, she opened her business in downtown Tuscaloosa, and today it is thriving. Another community winner is TUTR. Joshua Mickler, the CEO and founder, is now a member at The EDGE. He participated in a few of our competitions, and was part of the Velocity accelerator program at Innovation Depot. All this support and engagement helped him build his business. This year our student business plan competition provided a little over $100,000 in prize money. The $50,000 grand prize went to City Detect, which is using artificial intelligence and creative mechanisms for collecting data on blighted properties to help cities improve living conditions. Two of our prior $50,000 grand prize winners are also members at The EDGE: Trips4Trade and Reboot Reforestation. These are examples of companies that have benefited from the coaching, learning and competitions / funding we have provided to our entrepreneurial community.
Mazzei: One of our spring 2022 graduates, Kylie Pitt, is a recent success story from our entrepreneurship programming. While at Samford, she began reselling clothes from her personal closet via social media as a means to make a few extra dollars and allow her to update her fashion. As she started realizing the viability of her business, she joined our Samford Startup student business incubator. In August of 2021, she rebranded her company as Revenge the Label, and reengineered her business model to include both retail items and thrift sales. She built a website and developed a creative ambassador program to increase her reach on social media. Additionally, Kylie found success in several different local, regional and national entrepreneurship pitch competitions, and is set to participate in the Global Student Entrepreneur Awards this summer. Her confidence and resiliency have grown tremendously over the last year, and she is set to work on her business full-time after graduation. To watch her and her business flourish in the last 12 months has been truly special. Another successful entrepreneur is Drew Jackson. Not long after graduating from Samford in 2016, Drew founded StreetMetrics, a tech startup based in Birmingham that specializes in measuring moving, out-of-home advertising campaigns. The company has expanded into 30 of the top markets in the U.S. and several other countries, with more growth on the way. Drew’s success is just another example of the entrepreneurial preparation and business acumen the programs at Samford provide.
Sahib: I worked with an entrepreneur recently who was cash flowing a couple thousand dollars each month, but he hadn’t yet formed an official company or established a business bank account. This entrepreneur had tried to work with another resource provider but was told that his business was too small and didn’t have enough growth potential to receive their support. Over the course of a few sessions with the Lowder Center, we were able to provide guidance and achievable goals that would make a meaningful impact on his business. I am happy to report that this entrepreneur has now established the company and set up a proper business bank account. He’s now working full time for the business, and it’s continuing to grow.
Q: What questions should a person ask themselves before taking an entrepreneurial leap?
Mazzei: If not now, when? I don’t say that to trivialize the process. It is often a serious and life-altering decision to take an entrepreneurial leap. And I also am not suggesting all individuals need to be sole proprietors or start their own business. By asking that question, I am more encouraging individuals to invest in themselves. I want people to be curious and creative. I want them to continue learning and striving to improve all that they touch, to see opportunity for innovation and advancement in all that they do, and to be entrepreneurial and innovative in their church, as a parent, as a volunteer and at work. It becomes habit, and who knows where that will lead? If more boldly took on this mentality, what impact would it have on our community?
Sahib: As someone who has taken the entrepreneurial leap themselves, there are a few things I’d encourage. First, ask whether you’ve got a thorough plan that includes three scenarios: best case, expected case and worst case). Having a detailed plan that accounts for things not going as well as you may have hoped will allow one to better adapt to the ups and downs of an early-stage startup. Next, ask yourself if you have the drive, persistence and adaptability needed to overcome various challenges that will arise. In the early stages of a business, you end up having to cover a wide range of duties, some of which will be outside your comfort zone. Finally, I’d ask whether you have the right team in place to be set up for success. Even if you are a solo entrepreneur, you will need someone to bounce ideas off of and talk to about your journey.
Welbourne: Do you love your business idea? And even if you do, are you willing to make changes when you find out that something about it doesn’t work, or that no one will pay money for the idea as you originally conceptualized it? This is important because we often start out so enamored with our ideas that we don’t want to change, but entrepreneur success is a function of listening and changing. Also, you need a team, so I would also ask how well you share and are willing to delegate. Being the founder means you have to grow a team, and that can be equally fun and annoying at times. Can you be humble and confident at the same time? Are you coachable? Lastly, you must evaluate the level of personal financial risk you can handle when it comes to starting a business. Know when you need investors, and don’t assume you can live on ramen noodles for too long. Taking care of yourself and your team is important.
Q: What must an individual have situated before launching a business?
Sahib: It’s most important to have the right mindset. Entrepreneurship isn’t as easy as some think, so be prepared with determination and adaptability for the journey ahead.
Welbourne: An idea must be well defined so you can talk about it. Also, you must know that someone will pay money to buy what you are going to offer. An idea with no market is not a business. My own business story started from a research project that I conducted while on the faculty at Cornell University. I was working on predicting stock price growth in initial public offerings, and one of the CEOs who was part of our entrepreneurship center became interested in the work and wanted to apply it to his own company that was soon going public. We set up a consulting agreement, and that was the beginning of my business. I was fortunate in knowing that at least one person would pay for the product and service, but even that alone was not enough to guarantee the idea was a business. The initial trial period provided us time to test out the ideas and to see if any other companies would engage. We then added Amazon, Citi and one of the BCBS businesses as our next three clients. We spent two years working with them to test out the initial and very low-tech and low-cost initial project. Over time, we raised money, developed a large SAAS technology, and grew the business globally. The process of moving your idea forward is continuous, and learning from customers also is key. Entrepreneurs also must understand the important value of relationships. Customers often take big risks to try something new, and knowing this dynamic and understanding how to help customers is important for entrepreneurial success.
Mazzei: First, they must have a viable solution to a clear and pervasive problem. They should do enough prototyping and market research to feel confident they can succeed. Second, they must be willing to work and persevere. The path will be winding and exhausting, filled with roadblocks and setbacks. They should be willing to learn and adapt along the way, and prepared to push forward when inevitable challenges spring up.
Q: What role can continuing education play in entrepreneurship?
Welbourne: Continuous learning is essential for ongoing success. The first big education leap is from idea to business, and then growing a business is a continuous and expanded learning process. I do quite a bit of research on growth firms, and the overall topic of entrepreneurial growth strategies. In this work we see very well-established firms quickly go out of business because, as the rate of growth increases, the challenges they face are multiplied. One mistake on the right topic can send a business tumbling quicky. Learning from studying companies that have died and that have grown quickly has led our research team to several insights about the key milestones companies face as they grow. For example, think of a new firm doing its first big RFP as a key milestone event. They often don’t realize how long it takes and how many people must be involved, and do not adequately calculate the odds of winning. Then what happens if the team gets the business? In many cases, they think about the size of the contract and cash coming in, but alas, they often do not adequately account for the fact that cash does not come in before the team needs to hire people to deliver. That means big changes in funding and cash flow. Also, when an RFP is done, the new company often provides ideas in writing that can be implemented by the client in other ways. That’s only one milestone, and there are many more associated with new leadership challenges, client acquisition processes, client losses and much more.
Mazzei: The Brock School of Business faculty strive to provide strong, ethical business fundamentals with a healthy dose of practical experience. Furthermore, Samford’s motto preaches lifelong learning, so we are ardent supporters of those seeking new ways to learn and grow. We offer a strong and competitive MBA program, fully accredited by AACSB International, that caters to locals as well as those requiring an online learning option. The degree program is designed to prepare successful managers and leaders to excel in a competitive global business environment. Core business functions are taught with a focus on problem solving and practical application in the workplace, allowing for immediate career implementation. The degree can be earned in as little as two years. Additionally, our Master of Accountancy is known for preparing students for a highly successful CPA exam pass rate and ultimate success in the dynamic, ever-changing field of accounting. Our Executive Education program is also an excellent outlet for continuous improvement, learning and growth for members of both the entrepreneurial and corporate worlds. The program addresses industrial and business needs through program development and delivery that has individual and organizational impact.
Sahib: The best entrepreneurs consider themselves lifelong learners. Regardless of how much expertise you have acquired prior to launching your business, you should always be open to learning more. This will help you grow as a leader and help your business adapt to shifting landscapes.
Q: What are some of the top challenges facing entrepreneurs today?
Mazzei: In speaking with a handful of entrepreneurs recently, a common theme was identifying talent. Specifically, they are seeking those with a dogged work ethic and persistence that includes contributions toward both operational improvement and innovation. They are seeking those with an entrepreneurial mindset similar to what they have, a proactive disposition, and a passion for the work to be done. We are trying diligently to help meet this need.
Sahib: Seed capital is less bountiful in Alabama than in other popular entrepreneurial hubs. Therefore, I encourage entrepreneurs to think about how they can bootstrap, develop an MVP, and get some initial traction. That traction may be enough for the business to grow to profitability simply through customer sales. If not, it should at least better position the business for taking on financing.
Welbourne: The rate of change is escalating for everyone, and with that the ability to predict strategies that will work is more difficult. I hear this from the Fortune 500 companies that I work with as well as from startups. There is less certainly in projecting that action A will lead to outcome B. So how do people cope? I’m seeing a lot more networking and learning from each other. Also, firms of every size are working to optimize the diversity of their workforces. This means they are changing policies to make sure people of all backgrounds are valued and feel they belong. It also means that some habits or how people work together or who they choose to hire has to change, and change is not easy. As always, cash flow is a challenge for every entrepreneur. Sometimes it’s how to spend the money you have, but in more cases it’s how to find enough money to stay alive and then grow.
Q: How can the community support young businesses?
Sahib: Community members should show up to events hosted by the young businesses and try to help build bridges so those businesses have a network in place that can help them succeed. Community members and organizations should actively seek to be early customers for a startup business, and be willing to give detailed feedback that can help the business further improve.
Welbourne: Get involved. If you look at communities with successful entrepreneurial ecosystems, they come together to network and to support each other. Larger, established firms need to be active sponsors of startups and members of the community. Angel investors, angel networks and venture capital firms should consider supporting local companies and helping refer other investors to their local businesses. Before coming to Tuscaloosa, I worked in the entrepreneurial ecosystems of Boulder, Colorado, Ann Arbor, Michigan, upstate New York, Lincoln, Nebraska, Los Angeles. I still have connections in those cities and have been able to leverage what I learned from those communities to my work in Alabama. Growing an entrepreneurial ecosystem is all about community getting engaged to help startups and new ventures, creating economic growth and opportunity for citizens and established firms in the area. I am excited to see that in all our work, there has been significant and positive involvement from our various stakeholders. For example, when I look at our most recent endeavor, a crowdfunding campaign raising money for a new UA accelerator, I see one more example of community support. We have senior executives, alumni, students, parents of students and more contributing what they can to this new project. With this type of support, we continue to raise all those startup boats as well as the established companies and citizens who are benefiting from the growing economic environment that is helping everyone.
Mazzei: There is so much happening already, as there are startups, funding opportunities and incubators / accelerators locally. We love seeing local businesses partnering with one another. We appreciate consumers buying local. We encourage area high school programs building business and entrepreneurial skills. These entrepreneurs need mentors and support systems locally to help them create value and scale.
MEET THE EXPERTS
Matthew Mazzei, Ph.D., Associate Professor and Brock Family Chair in Entrepreneurship Samford University Brock School of Business – Matthew J. Mazzei, Ph.D., is an associate professor of management and the Brock family chair in entrepreneurship at Samford University’s Brock School of Business. Mazzei has taught a variety of courses at Samford and Auburn University, including topics on strategic management, entrepreneurship, innovation management, project management, organizational change, and big data strategy. His research primarily focuses on corporate entrepreneurship, with secondary interests in new venture characteristics and big data analytics at the macro level.
Mazzei has published in numerous scholarly journals, and he is routinely invited to present his research at regional, national and international academic organizations. He has provided consulting to a variety of for-profit and nonprofit entities across Alabama, Florida and Texas.
Prior to entering academia, Mazzei worked in the financial services industry, with leadership experience in finance, product development, and information systems. He holds degrees from the University of Florida, the University of South Florida, and Auburn University.
Dr. Theresa M. Welbourne, Will and Maggie Brooke Professor in Entrepreneurship and Executive Director Alabama Entrepreneurship Institute, Culverhouse College of Business at The University of Alabama – She works with students, faculty, staff and business leaders to help drive both new venture development and ongoing growth within established firms. Theresa also runs programming at The EDGE, which is Tuscaloosa’s incubator and accelerator. Dr. Welbourne’s expertise is in the areas of entrepreneurship, human capital management and strategic leadership in high growth, entrepreneurial and high change organizations. She is the founder, president, and CEO of eePulse, Inc., a human capital technology and consulting firm. Dr. Welbourne’s research and work have been featured in popular publications such as Inc. Magazine, Wall Street Journal, The Financial Times, Business Week, New York Times, and Entrepreneur Magazine, and she is well published in numerous academic and business books.
Dr. Welbourne also runs two large-scale research studies, one focused on high-growth companies and initial public offerings (IPOs), and another that studies employee resource groups (ERGs) and how they drive innovation and firm-level growth. Theresa was awarded the 2012 Academy of Management Distinguished Executive Award (for contributions in research, teaching and practice), in 2017 she was named a Society of Industrial and Organizational Psychology (SIOP) Fellow, and in 2022 she made the Business Alabama list of the top 22 in 22 Women in Tech. Dr. Welbourne also holds an appointment as an affiliated senior research scientist with the Center for Effective Organizations, Marshall School of Business, University of Southern California.
Joshua Sahib, Managing Director at Lowder Center for Family Business and Entrepreneurship Auburn University – Joshua Sahib is a serial entrepreneur. Over the years, he’s led a video production business, brewery software company, artificial intelligence startup and has won both local and statewide business competitions. He has also worked in higher education for nearly a decade in a wide variety of roles.
Joshua holds a bachelor’s degree in Management Information Systems and two master’s degrees from The University of Alabama. For several years, he served as Assistant Director of the Alabama Entrepreneurship Institute, where he provided coaching and other support services to a wide variety of entrepreneurs. In 2021 he joined Auburn University as the Managing Director of the Lowder Center for Family Business and Entrepreneurship where he hosts entrepreneurial events and guides early-stage startups.
Q: How would you describe the current state of entrepreneurship in Birmingham?