Meet TJ Andreasen, Senior Financial Analyst @ Paul G Smith Associates & Black Dog Ventures / Co-organizer @ 1 Million Cups Omaha & Nebraska Startup Job Mixer
How would you describe the startup culture in Nebraska?
I would describe the Nebraska startup culture as “collaborative”. The ecosystem is open to sharing lessons learned and best practices. A lot of this comes from experienced founders giving their time back to mentor younger founders. It is so important for an ecosystem to be collaborative rather than competitive.
Luke Moberly is one recent example of a former founder giving back. Even though his startup, Bumper, wound down, Luke has been incredibly transparent with the startup ecosystem sharing his lessons learned when building a startup in Nebraska. I would highly recommend any founder read his Bumper Post-Mortem.
How do you balance taking risks and making calculated decisions in pursuit of innovation?
I’ve seen many founders in Nebraska be more risk-averse than founders on the coast. This seems to be more of a trend throughout the whole Midwest. It isn’t necessarily a bad thing. When founders are risk-averse they tend to build a more stable business that can be set up for the long term. When looking at mitigating risk at the start it’s so important to have a customer discovery period. This should consist of interviewing potential customers to see if they would pay for the product you are selling.
Nebraska provides the Nebraska Innovation Prototype Grant which is a great opportunity to receive non-dilutive funding. Early on this is a way to mitigate risk in the product development stage.
How do you define success and what metrics do you pay the most attention to?
Success is something that should be measured on a case-by-case basis for every startup. They are all trying to achieve different metrics. Startups should have a handful of important KPIs that can measure the holistic success of the business. Some of the KPIs that are vital to track include annual recurring revenue / monthly recurring revenue (ARR / MRR), churn rate, customer acquisition cost (CAC), lifetime value (LTV), burn rate, gross margin, conversion rates, lead generation rates and cash flow.
What are the top one or two challenges / opportunities Nebraska startups face?
I would say the biggest challenge that startups face in Nebraska is later-stage funding. Over the last couple of years, more early-stage Nebraska funds have launched. However, now the challenge is when Nebraska startups are scaling and need to raise Series A + rounds. There aren’t that many lead investors.
This is a list of active funders in Nebraska: Nebraska Angels, Invest Nebraska, Black Dog Ventures, Grit Road Partners, Nelnet Ventures, McCarthy Capital, NMotion, MOVE VC, Proven Ventures, Maverick Venture Fund, Husker Venture Fund
What is one emerging industry or technology that you believe will have a significant impact on the Nebraska startup ecosystem in the next few years?
One industry that I believe will have a significant impact on Nebraska in the coming years is AgTech. There are great resources right now through The Combine and newly formed Ag fund, and Grit Road Partners, which have both drawn outside AgTech startups to relocate to Nebraska.
Nebraska could be at the forefront of Ag innovation since a large portion of the state’s economy is closely tied to agriculture. This makes it an ideal location for AgTech startups to thrive. All the different parties are now coming together to foster an AgTech ecosystem. This was on display through the AgTech Connect conference hosted by The Combine that brought together startups, corporations, farmers and investors.
Additionally, there is starting to be more market demand for Ag solutions that enhance productivity, reduce waste and ensure food security. Some of my favorite Nebraska AgTech startups are Corral Technologies, Sentinel Fertigation, EIO Diagnostics, Grain Weevil, Bluestem Biosciences and Marble Technologies.
