The first ever comprehensive survey on startups* in Fargo-Moorhead came to a close last weekend, with an end total of 45 participants answering extensive questions on their companies. The results, presented on April 27 by CoCo co-founder and organizer of the survey, Don Ball, revealed unique insights into the health of Fargo-Moorhead’s startup scene. Here are the 8 main take-aways that we learned from the survey:
1. Focus beyond the region.
When asked about the target market for their startups, 79.5% of respondents identified targets as the Upper Midwest, U.S., North America, or global, far trumping the few who chose to stick to Fargo-Moorhead. While there’s of course nothing wrong with staying local, survey results show that many local startups are aiming to hit a larger market.
2. Desire for long-term sustainability.
F-M startups don’t appear to be in it solely for the money. 75% of respondents described their goal as running a profitable, ongoing business, versus only 20% of respondents looking to be acquired. (Even 89-year-old Jim Bastian, our latest 1 Million Cups presenter, isn’t looking to be acquired.)
3. Not just solopreneurs.
Only 15.9% of respondents had no employees. The remainder had one or more employees, with the majority (61.4%) having 3 or more employees. There’s a lot of team effort out there.
4. Fully engaged.
Nearly 60% of respondents are working full-time on their startups. Take that in for a second – that means that over half of F-M entrepreneurs are risking much stabler jobs and wages to build their own company. Not to mention our next point…
5. Paying themselves last.
The largest percentage of respondents (34.1%) are unable to pay themselves from their startups, while 18.2% pay themselves occasionally. Nearly 30% of respondents pay themselves a below-market salary.
6. Anticipating growth.
More than half of the respondents (56.8%) anticipate growth in excess of 100% in 2015, with nearly one third (29.5%) predicting growth of 200% of more.
7. Challenges to growth.
More than half of respondents identified “sales” as their greatest challenge, while 31.8% cited “funding” and 27.3% cited “business development.” Only 20.5% of respondents see “recruiting talent” as their greatest need.
8. A smorgasbord of funding.
Friends and family funding is the most common (20.5%) source of funding for respondents. Other sources include seed financing (18.2%), crowdfunding (9.1%), and traditional bank lending (9.1%).
Now what?
Dr. David Wells, an active member in the startup community, said he was very pleased to gain these insights into the character of Fargo’s startup scene.
“We now have better understanding of the levels of company development,
Now, he said, we need to take action on what we’ve learned.
“We ought to organize some initiatives around the most important business growth impediments documented in the survey data,” he said.
This, he said, could look like anything from policy recommendations to collaborations between universities and industries.
Participants of the survey did not walk away empty-handed; they now have a free day at CoCo Fargo. Sarah English of Beach Interactive and The Abettor’s Letters, and Kari Peterson of Sky Blue Technology also won the drawing that all participants were entered in, both receiving a surprise reward of one ticket to MisFit Con (tickets are valued at $300+).
Don Ball presents the survey results.
Overall, Ball said, the survey showed that there seems to be a lot of positive energy in the F-M startup community. Entrepreneurs have solid teams, they are willing to take risks, to sacrifice their own pay to build their startups, and are predicting lots of future growth.
“I think this is a good thing,” he said. “It’s optimism, it’s confidence, it’s ambition. If we don’t believe in our startups, who else will?”
Photos courtesy of Lindsi Gish at CoCo.
*Many asked about what the definition of “startup” really is. Don Ball defined it as “any business that is not to the point of self-sustainability.”
