I’ve spent a considerable amount of time mentoring in the startup community of Greater Cincinnati and Northern Kentucky. I love the energy and passion of entrepreneurs, and find the fresh approach they take to solving problems absolutely fascinating. In the last 18 months, I have had the opportunity to meet more than ten incubating enterprises and engage closely with four of them.
We are blessed in this region to have outstanding community and corporate sponsorship of innovation and business. Cintrifuse, The Brandery, UpTech, Ocean, and The Hamilton Mill all provide facilities, mentorship, and connectivity to angel and venture capital funds. The community engagement and enthusiasm is driven by a desire to see the next Facebook, Uber, or other $500M+ shooting star. I applaud the support and I like the aspiration. The problem is that it sometimes creates shortsighted behavior.
Ultimately, developing a vibrant high growth business depends on four key elements: (1) an innovative solution or enhancement, (2) a focused and executable plan, (3) talented people led by trusted leadership, and (4) a sustainable financial model. In the world of startups, it is a rare day to find them all aligned.
Many startups have viable business models that can develop into very profitable operations in the $5 million to $25 million range – that is, if the enterprise stays focused, deliberate, and keeps an eye on profitability. But what often happens is that extreme aspirations and heavy debt funding sets up a loop of activity focused on continuous fund raising, rather than placing energy on the business. The ventures commonly fail.
You could say that I’m a bit of a skeptic. So when a business that really knows their stuff comes my way, I pay attention. That’s what happened when I landed on the board of StreamSpot, a startup that enables simple, high quality live and on-demand streaming from churches, synagogues and events.
StreamSpot was founded by Brian and Laura Duerring in 2012. “We developed StreamSpot to solve a problem for a single church in Milford, Ohio,” says Brian, who is serving as CEO of StreamSpot. “Our pastor was late to meet us, because he was returning from a nursing home, where he’d been playing back his sermons on a tape recorder.” The idea practically fell from heaven: why not outfit the church with live streaming capability for those who could not attend services, due to difficulty or distance?
They just accepted a round of funding, and have targeted the money almost entirely on sales and marketing to seize market share. Note that they secured funding only after they proved their business model through recurring revenue and profitability.
I tell their story because Brian and Laura are truly treating the investment in their company as precious. The other day, Brian said to me, “David, I’m concerned about our spending this month. This is the first month in a long time that we will have a negative month of EBITDA due to marketing spend.” It was music to my ears (and I love music, so that is really saying something). These are the kinds of conversations startups need to be having, and the kinds of issues they need to care about.
As for StreamSpot, it’s just the beginning. With the addition of a talented marketing director, increased technical and customer support, they will soon be on their way to even higher levels of compounded growth.