Bringing Innovation Back

Photo Credit: Marshall Franklin Long

There is little doubt that Minnesota has been home to some great idea generators, some early innovators who turned those ideas into successful companies. From Earl Bakken and his brother-in-law Palmer Hermundslie with their humble garage company, Medtronic, to the five northern Minnesota businessmen who pooled assets and expertise to form 3M—not to mention the Pillsburys, the Bremes, the Daytons and Tappens, to name just a few—it seems we have a long legacy of entrepreneurial spirit.

But Ernest Grumbles and Brad Lehrman, co-founders of the innovation advocacy force MOJO Minnesota, point out there has been a shift of late, a shift that has Minnesota falling to the 31st spot of “Best Places to Start a Business in America” in 2010 from 12th position in 2005, according to one industry publication. Grumbles and Lehrman reveal other indicators have shown Minnesota losing some companies to nearby states and having trouble bringing new innovative companies here.

It seems our mojo has moseyed on. But Grumbles and Lehrman are determined, much like storied musician Ike Turner, to get that mojo working again.

Grumbles, an intellectual property attorney for startups, and Lehrman, a corporate finance attorney and venture capital investor also working with startups, not surprisingly saw many of their emergent-technologies clients floundering in 2008 after venture capital, angel investments and other avenues of financing began to dry up.

“It wasn’t for lack of a wonderful infrastructure, great technologies or innovation talent,” says Lehrman. “It was a lack of access to capital, and a loss of passion and pride for what we were doing here. We needed to get our mojo back.”

So Lehrman and Grumbles began assembling a volunteer team of venture capitalists, business advisors, angel investors, design startup guys, serial entrepreneurs, attorneys, etc., as a sort of been-there-done-that brain trust to get out there and mix it up to get us on the right path again—they call themselves the “agitators.”

These mixer-uppers learned some things about us in the process. “We Minnesotans are kind of risk-averse, and we don’t like to toot our own horn,” says Lehrman. “Unlike the other states who herald their successes to bring in more innovation, we are what Garrison Keillor would call ‘milk toast’ about it. And we don’t look at failure as a badge of courage as they do in other states. We need to change all that.”

So, like any advocacy group worth its salt, they have come up with a course of action, specifically a three-pronged approach. First, they need to get the money guys to step back up to the plate. “We are working with angel investors to give them ideas on how to compress timeframes,” says Lehrman, “how to get better due diligence and analysis of companies that are coming before them and to syndicate their participation with other like-minded people to aggregate more pools of dollars.” They are also reaching out to investors across the country—even worldwide—to tell them about the innovation we have; here is where the horn-tooting comes in.

Second policy makers need to be brought into the loop. So in an environment that historically shies away from too much government involvement, MOJO welcomes it. A first step is to partner with the Minnesota Department of Employment and Economic Development (DEED). “We also need to work with our legislators,” says Lehrman, “to let them know what’s going on.” This partnership was evident at the recent MOJO launch, where key members of the House and Senate were given plaques in appreciation of their support for the recently passed Angel Investor Tax Credit, which MOJO agitators assisted other organizations in helping enact. “They came, they talked, they accepted the plaques and stayed for the two-hour event because they learned so much,” says Lehrman of the policy makers. “It was really great.”

The third element of their strategy is to reach out to the innovators, the idea incubators. With a variety of “mojo talks,” the agitators hit the street with messages of how to build a startup, how to get financing, how to use the research and development and angel investor tax credits, how to protect themselves with intellectual property rights, how to avoid the pitfalls and so on, because, after all, they have firsthand experience. “Everyone of us is going to be assigned an area as agitators,” says Lehrman, “and we’ll go out and do at least one ‘mojo talk’ a month.”

And the group is optimistic about the future.

“We have the foundation, the fundamentals, and the technologies to reignite the innovation culture of Minnesota,” says Grumbles. “Our goal is for Minnesota to be among the top five places in the country for innovation and growth … and we feel we can definitely achieve that goal.”