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Economic Gardening WorkshopPenny Lewandowski
Vice President, EntrepreneurshipEdward Lowe Foundation
Imagene HarrisManager, Economic Programs
Network [email protected]
Edward Lowe Foundation copyright 2015
Session Objectives
• Getting to know each other• The importance of second-stage companies• What is Economic Gardening• Practical applications from rural Kansas• Investigating the Commodity Trap• Starting a pilot program
Edward Lowe Foundation copyright 2015
Guidelines
• Cell phones off or on stun• Step away from email and voicemail• Manage your own biological functions• We’re here as peers to learn from each other• Speak from experience rather than giving
advice
Edward Lowe Foundation copyright 2015
Stating the Case
Growth companies are absolutely critical to the success of our economies, and it is
time to develop policies that drive towards a more balanced approach in
economic development to ensure these companies have their fair share of
resources to grow.
Edward Lowe Foundation copyright 2015
Nationally recognized expert in understanding growth companies
• Operating Foundation– National – 42 States– SW Michigan HQ 2600 acres– Retreat and Conference Center– Land stewardship
• Approach to entrepreneurship– Entrepreneur Support Orgs– Second-stage Entrepreneurs– Economic Gardening
Edward Lowe Foundation copyright 2015
EG Philosophy
• Loving those who loved you first
• Growing your economies from the inside out
• A balanced approach between start-ups/recruiting and growth companies
Edward Lowe Foundation copyright 2015
• Past startup – with proven model
• Intent and capacity for growth
• Privately-held• 10-99 employees
• 1-50 Million in revenue• Includes high growth, high potential and steady
growth
Increaseattention on growthcompanies
Edward Lowe Foundation copyright 2015
Why Second-Stage Companies?Because we believe they have the greatest positive
impact on the economy
• Create jobs• Increase volume of income into the region• Attract outside capital • Attract companies and talent• Drive culture• Affect philanthropy
Edward Lowe Foundation copyright 2015
Monroe MSA, Louisiana 2009-2013
Percentage of Companies Jobs Represented
Edward Lowe Foundation copyright 2015
Monroe MSA, Louisiana 2009-2013
Percentage of Companies Sales Represented
Edward Lowe Foundation copyright 2015
What Causes Growth
It is not industry and location that
cause growth. It’s what happens
inside the company.
Edward Lowe Foundation copyright 2015
Company Stages Don’t Look Alike
• Second-stage companies require different services
• Need to feel loved• They thrive on
information – the new incentive
Edward Lowe Foundation copyright 2015
Economic Gardening
An entrepreneurial approach to economic developmentfocused on growing local stage-two companies
with external markets
Copyright Edward Lowe 2015
Proven Model With Deep Roots
• 28 year roots in Littleton, CO
• 28 networks in 23 states
Edward Lowe Foundation copyright 2015
What is it?
• Hosted at state or regional level• Delivered virtually by national team of experts• Provides critical strategic information in
– Market research– Geographic Information Systems– Digital marketing– Core business model
Edward Lowe Foundation copyright 2015
What it is Not
• No operational issues
• No consultants• Not an ongoing
subsidy
Edward Lowe Foundation copyright 2015
Results
• Alpha Precision Aerospace– 700 potential customers– 10 new jobs– Double 2013 revenue by fall 2016
• B&F Fasteners– Two new locations– Cut time to open by 50%
Edward Lowe Foundation copyright 2015
Who’s On the National Team?
• Team Leader: Helps identify core issues and coordinates specialists to find information
• Specialists: Private-sector experts across the country
Copyright Edward Lowe 2015
Training and Certification
• All specialists must have past experience• Trained in the EG process• Team Leaders must have proven past working
with entrepreneurs• Online training• 4 day in-person training• 6 to 12 month mentoring process
Edward Lowe Foundation copyright 2015
Let’s Get SpecificWhat Do Companies Have Access To?
• Industry trends• Competitor intelligence• New product releases• GIS computer maps of
customers, competitors, potential markets, trade areas
• Search engine optimization, social media, digital marketing
Edward Lowe Foundation copyright 2015
Examples
• HED Cycling– Business model– Commodity versus innovation
• Applied Energy Systems – New customer– 30% revenue increase– 4 new jobs
Edward Lowe Foundation copyright 2015
What Actually Happens?
• Initial call with team leader• Team clarification call• Tasks assigned to specialists• Information accessed online• Specialists call to discuss and ensure clarity• Team leader conducts check-in calls• Team leader conducts close-out call
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How Much Time Will It Take?
• Engagements run at the speed of the CEO
• CEO will spend about 8 to 12 hours.
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Post Engagement Follow UpMissing Puzzle Piece
• Assistance in sifting through information and implementing
• Connections to essential service providers
• Second-round engagement
Edward Lowe Foundation copyright 2015
Not a Silver BulletBut we are very good at what we do!
• 28 year roots • Structure in place• NSRT works
together• Quality control
Edward Lowe Foundation copyright 2015
ROI• Kansas (2 years)
– Revenue grew 16% compared to 2% and .5%– Jobs grew by 19% compared to 2.5% and 2%
• Minneapolis (2nd program year)– 36% increase in job creation
• Florida (2 years)– 3,745 jobs and $588M to the economy– $7.58 for every $1
• Rochester (18 months)– 20 companies – 177 new jobs -- $1,700/job
• Michigan (2 years)– Increased external market activity by 45%
Edward Lowe Foundation copyright 2015
"That's a fantastic return by any economic development measure. In fact, it's probably a better ROI than almost any economic development incentive package in the country.”
…Mark Peterson, CEO Greater Rochester Enterprise
Edward Lowe Foundation copyright 2015
NETWORK KANSASECONOMIC GARDENING
Imagene HarrisManager, Economic Programs
Network [email protected]
Edward Lowe Foundation copyright 2015
Developing a Pilot Program
• Great way to test drive the concept or launch a program!– Immediately serves local
companies– Low infrastructure costs– Sub contractor
agreement with ELF/National Center
Edward Lowe Foundation copyright 2015
Pilot Program
• Great way to test drive the concept or launch a program!
• Immediately serves companies• Low infrastructure costs
Edward Lowe Foundation copyright 2015
Contracting For a Pilot Program
• License with the Edward Lowe Foundation• Five company minimum• Typical engagement – 36 hours at $115 per
hour• $150 set up fee per company• Total of $4,290 per company
Edward Lowe Foundation copyright 2015
The Power of Partnerships
• More companies• More money• More visibility• More success
stories• More excitement
Edward Lowe Foundation copyright 2015
PartnershipsSuccess Lies In The Ideal Match
• Access to money does not always means access to the right companies.
• Access to the right companies does not always means access to money.
Edward Lowe Foundation copyright 2015
Edward Lowe Foundation copyright 2015
“Those who cannot change their minds, cannot change anything.”
… George Bernard Shaw