Sharing the ‘Secret Sauce’
Steve Barsh of Philadelphia accelerator DreamIt Ventures counsels students as a start to Global Entrepreneurship Week.
Steve Barsh held the room from his very first word. Maybe that’s no surprise given the software engineer had founded his own startup fresh out of college, bootstrapping his way to an acquisition by communications giant MCI seven years later. Fast forward to 2008, and the successful entrepreneur had jumped in with a group of like-minded startup veterans at a hot, new Philadelphia accelerator.
“Three founders had come together to give back,” said Barsh, CIO and managing director of DreamIt Ventures’ DreamIt Health division. “You know, been-there-done-that entrepreneurs who always wish somebody had told them the secret sauce that usually takes 10 or 20 years to figure out.”
Barsh was happy to share some of that recipe with an appreciative roomful of Carnegie Mellon University community members, kicking off Global Entrepreneurship Week Nov. 16-20 – five days of events celebrating entrepreneurship at Carnegie Mellon, in Pittsburgh and across the globe.
Dave Mawhinney, co-director of Carnegie Mellon’s Center for Innovation and Entrepreneurship (CIE), moderated the “fireside chat.” The hour was jam-packed with candid, no-nonsense information imparted with humor, right down to the cartoon fire hastily scrawled on the whiteboard. “Looks more like a crown,” joked one audience member.
The snappy, business-casual group – from undergraduates and grad students to alumni and industry players – hailed from varied disciplines, including business, computer science and public policy. Heads nodded attentively as Barsh proceeded to relay impressions and advice in rapid-fire accounts peppered with colorful analogies (startups can be like fairy tales) and whimsical acronyms (BHAG – big, hairy, audacious goal), all reflecting the energy and excitement of the business itself.
Barsh began by describing DreamIt’s growth from accelerating a dozen companies to 220-plus with a current combined value of over $1 billion, “and most of those were ground-zero startups.”
An impressive record, partially accomplished via DreamIt’s intensive, four-month program – one that two Carnegie Mellon teams have completed. Other important facets of that program include a crash course in critical topics: a “killer technique” for interviewing customers, lessons in building financial models, effective PR, and how to become an email “ninja,” as Barsh put it.
“I find that 90 percent of entrepreneurs stink at email,” he quipped about such introductions and pitches. “I give them a solid ‘D.’ And if you can’t break through on email, you’re dead.”
He minced no words in pointing out that one of every 10 DreamIt teams “blows up” from the program intensity that he vividly compared to working with a zealous personal trainer.
“First thing you need is a great team because startups, as you well know, are very, very hard, and it’s a team sport,” Barsh said when asked to identify the key attributes his firm requires. To that list, he added really big ideas along with a clear understanding of the startup’s key assumptions and “de-risking” strategies.
“We spend an inordinate amount of time and energy talking about what are your biggest assumptions and biggest risks,” Barsh explained. “If it’s an early stage startup, they don’t have to have all the answers…they need a recognition of the issues, and a lot of times these startups get distracted with all kinds of crap on the sides.”
When the conversation opened to questions from the floor, one of the first came from Robb Myer, the CIE’s new entrepreneur-in-residence, still active with his successful area startup, NoWait, and enthusiastically mentoring Carnegie Mellon teams. Myer has advised teams through other area accelerators, a vibrant local network that includes CIE partners Alpha Lab and Alpha Lab Gear.
“What motivated you to take on this type of role?” asked Myer.
Barsh pointed out the diverse nature of his “extremely rewarding” work and added, “I’m getting better and better at seeing around corners for others.”
It was all welcome information for attendee Matt Cantele, MBA ’16, already involved as the business brain for fledgling Carnegie Mellon medical device startup PalpAid, along with founder and biomedical engineering doctoral candidate Molly Blank.
Cantele, a member of the highly selective James R. Swartz Entrepreneurial Fellow’s program, is particularly intrigued by the digital health space. He attended Barsh’s session to gather viewpoints and stay current on the state of the industry and its players.
“The culture around this place is very conducive to stepping outside your comfort zone and being embraced by the entrepreneurial community,” said Cantele, who’d lacked formal startup experience prior to enrolling at the Tepper School.
Ivan Pistsov, MBA ’17, another Swartz Fellow, was at the presentation to soak up as much entrepreneurial know-how as possible. In his native Russia, he’d founded three startups spanning fashion spanning fashion to engineering. He came to America and the Tepper School to learn about business and technology in this part of the world.
While excited to begin again, he’d found, “It’s like I came from fresh water to salt water, and I don’t understand how to live in salt water. So that’s the main thing – I’m trying to increase my understanding. I want to identify the area I want to dig into.
“I’m surprised and very happy to be exposed to such a great array of entrepreneurial opportunities here,” he added. “I’m open to all.”
And if Barsh could give just one piece of entrepreneurial advice?
“Easy,” he said, without a moment’s hesitation. “Figure out your most critical assumption. Obsessively focus on that and figure out how to pack and de-risk it as cheaply and quickly as possible.
“And,” he added, “burn up your intellectual capital before your venture capital.”
Read more about Global Entrepreneurship Week.