Zebra companies vs. Unicorn companies: Which path is better path for both entrepreneurs and investors?

By: Kim Folsom, from LIFT DE

When people think about the American dream, they usually think about entrepreneurial endeavors that allow them to be free from corporate control. With that being said, the idea of starting and growing a successful business has been altered in the past 15-20 years. Everyone nowadays wants to become the next Facebook, Instagram, Twitter, Uber, or Airbnb, etc. This can put a lot of pressure on most people by setting expectations and the bar too high. People are ultimately setting themselves up for failure due to the fact that there are many factors and variables out of their control. 

These Unicorn companies do inspire following generations, but their remarkable businesses can also stifle innovation. This occurs because people begin to look for life-changing solutions that a large, global population of people can utilize. While it is inspiring to see that young people have high aspirations to become Unicorn companies, it actually stops them from looking at the issues on a smaller scale. Entrepreneurs sometimes tend to neglect the basic needs and problems that impact certain niche target markets. However, this is where Zebra companies come in.

You may be asking, what is a Zebra company? According to the Zebra Company Growth Playbook, as defined by Founders First Capital Partners, Zebra companies generate annual revenues between $5 million and $50 million, require growth capital of $100,000 to $1 million, and have 5 or more revenue streams to serve a customer within a specific national target niche. Zebra companies may not be pure tech companies, but they are tech-enabled companies. Unicorn companies may satisfy a much larger market, but Zebra companies may provide more options for founders in underserved markets outside of the top venture capital markets in New York and Silicon Valley. Also, underrepresented Zebra company founders may have better access to capital. Sometimes their execution may be slower than Unicorn companies, but Zebra companies can provide more opportunity for more entrepreneurs. 

Since most entrepreneurs strive to become Unicorn companies, they usually ignore the goldmine that is right in front of them if they sharpened their focus to help specific target markets. Zebra companies rise by observing the trends in the market and adapting to the demands of consumers. Unicorn companies attempt to disrupt the general market by introducing something new and innovative like Uber. The thing is, startups that try to become Unicorn companies usually die off quickly, with only a small number actually making it. 

Unicorns may be revolutionary to society in general, but Zebra companies can outweigh them and have a larger impact on local communities. Zebra companies can improve their local communities by creating premium wage jobs while also utilizing resources within their local market. Thirty-five percent of U.S. jobs are created by Zebra companies and other small businesses. These jobs are a vital part of the U.S. economy and overall GDP. Zebra companies provide freedom to both the founders and their employees since they do not have to succumb to the struggle of working under a large conglomerate that treats you like a number. Employees of Zebra companies usually are happier and feel more fulfilled since they get to utilize their talents in a helpful manner. They feel like they matter to the company, which increases job satisfaction. The benefits of working under a Zebra company include smaller, more intimate working environments with diverse groups of people that work together towards a common goal. 

Founders of these companies also tend to be average Americans who pursued their passions. Most of the Zebra companies are run by CEOs who are experts in their fields, and they usually have a bigger purpose than just themselves. These founders are able to monetize their passions because they better understand the markets that they are serving. Anyone can turn their hobby or passion in fitness, health, motor vehicles, music, education, etc. into a successful Zebra company. You do not necessarily need a full business background to excel. All you need to do is become an expert in your field and address the problems that the people in that industry are facing. If you are able to provide and fulfill the needs of your client base, you can quickly succeed.

While Unicorn companies may make the national news and generate a lot of buzz, Zebra companies are well represented in the Inc. 500/5000, which list the fastest growing private companies each year. When you review these lists, you find amazing companies that dominate their respective niche markets. To be successful, they’ve developed unique value propositions and solutions that delight a very targeted group of customers and are being rewarded with revenues north of $5 million annually. 

Two great examples of Inc. 500/5000 Zebra companies in underserved markets with underrepresented founders are TomboyX, which specializes in unisex apparel, and RockMyRun, which is like Spotify for athletic and performance endurance music. Both have received growth funding to expand their businesses. Check them out. 

What allows most Unicorn companies to flourish starts with some venture capital funding. Zebra companies often aren’t so fortunate to receive VC funding because VCs are looking for a bigger payday. However, there are many other funding options that Zebra companies can utilize to get where they are. This includes debt financing, but that can sometimes hinder the growth of a company to pay back the loan. A growing trend has been the move toward revenue-based financing, which means that the company will receive a loan with some money every month. All the company has to do is pay back a certain percentage of their revenues back on a monthly basis. Revenue-based financing helps fuel the necessary growth needed for these companies to become Zebras. 

The impact Zebra companies have had on our society should not be ignored in this age of Unicorn entrepreneurial innovation. Entrepreneurs should take note of their success.

7 Secrets to Winning Your Next Pitch Competition: Part 3

By Sawmawn Soltani of LIFT Development Enterprises, Inc.

Here we are again, discussing the important tactics needed to succeed during your pitch. Let’s get on with part three of our four-part series: 7 Secrets to Winning Your Next Pitch Competition.

4. Share Your Business Success and Traction:

This next tip is pretty simple: Don’t sell your product or service to the audience, but sell your business as a feasible and viable growing company! So many companies that have come through our program have a sales message that they would usually push onto their clients in their market. This is not the time to try to sell your product to the audience, even if they do fall under your target market. The judges and investors are there to quickly determine, if they gave you capital, could you provide a large return on their investment. They might not even care about your product or service at all personally, but they can see that there is a market for it along with revenue streams that will back up the investment. The whole pitch is about showing the health of your company and that there is potential for major growth. Please do not make the same mistake and try to sell your service, or say that you have the best quality product on the market. Everyone says that. Skip the fluff. Instead, show the cold hard numbers.

5. Know What You Are Asking and Looking For:

With our programs, we have noticed that there are a number of people who do not have “an ask.” Tip number five is that you should come up with an ask from the panel of judges or investors, and back that up with why you need that. This can come in the form of asking for money to help grow your business. Some companies ask for way too much or not enough.

Once you state how much you want, you should be able to illustrate to the judges what those funds will be used for and how you will allocate the use of funds into different aspects of your company to grow. The judges will want to know if the money will be going towards marketing, operations, or even making key hires. Another thing to realize is that you do not have to ask for only money. Judges and investors actually get happier when they see someone is asking for mentorship, connections, and advice. It makes you stand out compared to others because judges will start looking at your company through a different lens of how they can help the company, versus the way they have to constantly critique pitches if they are just asking for money. The judges criticize and nitpick the companies that ask for money more than those that don’t ask, because they are looking for all the reasons why they should not invest. However, if your company asks for advice or mentorship, then the judges are much more relaxed and become willing to help push you in the right direction.

We are almost at the finish line! With only one more part left, you are that much closer to understanding how to conduct a successful pitch. Join us next time as we discuss your numbers and how to successfully engage with the audience.

The True Impact to San Diego When Apple, Walmart and Others Add Dozens of Jobs

Photo by Tj Kolesnik on Unsplash

When stalwart companies or new businesses add jobs to a community, the effects are far reaching. Beyond the initial jobs created, communities see an expansion in infrastructure and services creating more jobs and growth. We’re seeing this happen in San Diego as small businesses thrive and companies like Apple, Walmart, and Teradata add operations in the area.

Without business growth and premium-wage jobs the financial and socio economic health of a community can suffer immense consequences. The economy of a city, town or village can dramatically be affected by the increase influx of new well-paying jobs. A healthy economy relies on its people to be able to work and receive livable wages so that the cycle continues.

When communities receive more and more new jobs, income inequality decreases while also reaching all aspects of the community from poor to wealthy. The trickle down begins to take effect where the wealth of all members of the community starts to rise. The types of industries that enter a community may have different impacts depending on if it is the steel, coal, healthcare, manufacturing, food service or tech industry. But with more premium wage jobs entering a community, citizens will begin to see the direct and indirect positive effects of overall health, financial security, and quality of life.

Not only does quality of life increase for the individuals in the communities, but infrastructure growth begins to take place. Companies may receive many incentives to come to a new area from the local government. Reaching new growing and emerging markets are enticing, since companies can set up a new sustainable foundation for long-term success. The San Diego North Economic Development Council (SDNEDC) concludes that the major factors related to job growth are the actual wages versus the goods and services purchased locally and non locally. According to the Bureau of Labor Statistics, since the recent recession, small businesses were responsible for the creation of 62% of all new net private-sector jobs across the nation. With that being said, it becomes extremely beneficial to lend and invest once there is an increase in productivity in a local environment.

Once disposable income increases, that leaves more money on the table for future investments. Independent economic analyst Vince Vasquez concludes that when jobs are created in underserved markets of a community, there is a direct positive correlation with the overall health of that community. A major decrease in stress levels for individuals may occur, especially for those who may have been forced to work two part time jobs. As more employers hire more people they can begin to qualify for better health care plan pools. It is important that jobs are spread throughout a community, rather than all the jobs being placed in the wealthier sections of a city or town. The long-term impact of not addressing the underrepresented markets can have negative consequences that do not bode well for the community as a whole.

Across the country there are numerous communities experiencing extreme growth from job creation. The local agencies play a part by incentivizing companies to relocate by including county and city property tax abatements, county loans, grants, freeport exemptions and cash for high performance. The size of the community is a key factor of how much economic development can occur. However, local entrepreneurs are more vulnerable for an economic recession, and changes in energy pricing, so because of this the States place mandates to encourage small business growth.

The types of industries adding premium wage jobs has a direct and indirect impact to a community. For example, according to the San Diego NEDC, for every 100 jobs added in the facility services industry, another 160 total indirect and induced jobs will be created in San Diego County. One hundred jobs added in the food industry would have a net gain of another 184 additional jobs. The trend continues for IT services and the administrative industry. When both industries add an additional 100 jobs, it results in another 120 indirect and induced jobs, respectfully.

According to Erik Bruvold, CEO of the San Diego North Economic Development Council, “bringing 20 jobs and new businesses to underserved communities has another impact that is often overlooked: By building economic capacity and vibrancy into underserved neighborhoods these businesses help to keep local spending local. That, in turn, fuels additional economic impact. While 20 jobs and a new enterprise are welcomed anywhere, it is doubly true in communities where residents currently go outside their community to purchases goods and services. Keeping dollars local is good for economic development and is another reason why building small business capacity in a wide range of industries and sectors is so critical.” If the jobs remain in a particular location of a city or town, then it will be hard to permeate resources and wealth to other portions of the city that need it. This imbalance makes communities unhealthy and can lead to many negative consequences like crime, poor health, lack of education, and more people needing government assistance.

Our local San Diego community has seen tremendous growth in the past year alone and our future trajectory is even better. According to the San Diego Economic Development Corporation (EDC), just in the last year San Diego welcomed Teradata, a data analytics company from Dayon, Ohio, which set up their new headquarters here. Also, Amazon and Walmart Labs are looking to add 350 new jobs near UTC and Carlsbad. The San Diego NEDC estimates that both companies could each cause another 363 jobs to be created locally. Recently, we also welcomed the news that Apple will be bringing 1,000 new jobs to San Diego. The impact could be that San Diego could possibly see another 1,000 jobs added to our community as we will begin to see the growth of more infrastructure, housing and service industries

Of course, it also could increase the traffic, living costs and prices of just about everything. There will always be pros and cons, but this robust job growth will help our city reach new heights and just like other cities across the nation, the power of business will help fuel a better quality of life for all its individuals.

Sources:

https://communityimpact.com/houston/conroe-montgomery/business/2018/12/20/local-incentives-attract-manufacturing-jobs-to-conroe/

https://www.planning.org/pas/reports/report31.htm

http://www.sandiegobusiness.org/blog/san-diego/good-news-2018

CarAudioCare Achieves 40% Revenue Increase in 2018

Robert Cruz, founder of CarAudioCare, joined the Spring 2018 EMBC after having a burning desire to learn how to position his business for growth and work ON his business, rather than simply IN it. He won the EMBC and ever since the program he has achieved and reached new heights in a very short amount of time. The biggest obstacle for Robert when establishing CarAudioCare was trying to grow on his own. Since completing the program, Robert has made key hires to help grow his company.

Prior to EMBC, Robert had some knowledge about business, but now he has gained insights and tools to implement growth strategies such as lowering the cost of goods, increasing  his number of customers, and selling more to his current clientele.  After grasping this newfound knowledge, Robert placed 1st at the EMBC Pitch Day and has applied changes to his business that exemplify accelerated growth. In addition to adding a bookkeeper to his team, he has hired a part-time technician who will be transitioning to full-time soon. CarAudioCare is on track to increase revenue by 15%.  Robert has been operating his business for 11 years and has talked to many people who have offered advice and tried to help him grow, but no one has compared to the team at LIFT Development Enterprises. EMBC helps small businesses by teaching them innovative methods and guiding them through their execution so they can reach the next level.

Robert attempted to request funding from many different banks, but unfortunately, he was unsuccessful in securing financing with them. Once participants graduate from EMBC, they undergo a 24-month period of frequent checkups from the support team to address any business needs. In Robert’s case, we helped develop his portfolio to be approved for alternative funding. With our team’s effort, Robert was approved for a loan from Accion to grow his business.

CarAudioCare increased its revenue in such a short amount of time, that it qualified to enter our advanced growth accelerator program: Founders Business Growth Bootcamp. Upon graduation of our Bootcamp program, Robert will have even more opportunities to receive mentorship and funding as he endeavors to expand to other regions of California.

With a commitment to work hard and a desire to grow, your company could be the next sustainable and successful small business like CarAudioCare.  No one can grow without a little bit of help. We hope that the Elevate My Business Challenge can be the spark that ignites a fire for your business growth!

Founders Bootcamp Alumni Spotlight: TreoBytes (S18-FBGB)

TreoBytes is a unique company that aims to enrich and inspire today’s youth to get interested in STEM — Science, Technology, Engineering, and Math. Led by Founder Ava Mason, TreoBytes has a mission to teach and give underserved students, especially minorities and minority females, a chance to succeed in the STEM field. Her company works with school districts from kindergarten to 12th grade. She believes that if these students are given the resources at an early age, there is a high chance of them developing a lifelong passion.

Ava’s background and experience of more than 20 years in the biochemistry and management sector allowed her to pinpoint what was missing in the market. She realized there was a need for more tech jobs when she was previously working at a Fortune 500 company. And the  gap for minorities and women to succeed in this industry was even wider. When taking her daughter to a summer camp, Ava came to the realization that more girls need to be interested in technology. So, founded TreoBytes to give youth, especially young girls, a pathway into the tech workforce.  

TreoBytes differs from other companies and courses by focusing on the end user: the child. Ava wants to give children practical skill sets they can apply immediately, and it does not stop there. The focus is not only on academics, but on how to have a better family life for the parents and the kids. Ava researches what  companies are looking for in technology employees, and incorporates those criteria directly into the curriculum to ensure that the students are gaining skills employers are seeking.

The path TreoBytes has taken has not been an easy one. A major obstacle Ava has had to overcome is receiving funding approval from school districts, as many schools are on tight budgets, opposed to new programs, or have bureaucracy and politics that places their priorities in other focus areas. With Ava’s patience and determination, she has been able to succeed despite these roadblocks by reaching out to superintendents and expanding the program to other regions such as Texas.

In order to take her company to the next level, Ava participated in the Founders Bootcamp. Since 2014, TreoBytes has grown every year; however, Ava did not know how to improve on each sector of her business. Due to the insights she gained from the Bootcamp, Ava was able to peel back certain layers on how to analyze the health of TreoBytes. The most impactful takeaway for her was being able to analyze TreoBytes financial health and implement a recurring revenue model that has won over the approval of several clients.

In the next 3 to 5 years, TreoBytes plans to grow exponentially by expanding throughout Southern California and on-boarding more students. Since Ava’s successful graduation of the Bootcamp, she has hired 7 new facilitators. Since September 2018, the company has already grown by 78% and expects to grow by 100% by December 2018.

Ava’s advice to other small business owners is the following:

“Continue to learn and reach out to others.”

-Ava Mason, TreoBytes

The ability to be vulnerable has been the key for TreoByte’s growth, as that vulnerability allows for new ideas and learning stories to be shared.  She also stated:

“It is okay to not know all the answers and what the future holds; it is necessary to make mistakes and learn from them.”

-Ava Mason, TreoBytes

Without making mistakes you are never taking risks to gain a large reward. Make sure to check out Ava Mason and the TreoBytes Team at www.treobytes.com to learn more about their great work.

 

Have a Burning Desire for Business Growth?
We’re looking to you to give business founders the opportunity to expand their businesses and receive the guidance you were provided by our mentors and program. Our goal is to assist small businesses with revenues of at least $250K with a strong desire to grow more sustainable businesses, especially those founded by women, minorities, and military veterans.

If your business or a business you know is ready to grow to the next level, sign up on Founders Business Growth Bootcamp interest page to be in the know of upcoming schedule programs.  See below!

Join our Bootcamp Interest List!

Founders Bootcamp Alumni Spotlight- Connected Women of Influence (F16-FBGB)

Creating A Community of Strong Female Leaders

Connected Women of Influence is a leading invitation-only association where women owners, executives and professionals from all different backgrounds in business can connect, collaborate and cultivate a vast network of high-level affiliations, resources and professional relationships. The goal of this association is to see more women succeed in business and connect like-minded women together to help one another. They aim to build strong alliances among women, because they are stronger when working together.

Michelle Bergquist is the CEO and co-founder of Connected Women of Influence (CWI). She is also a nationally recognized author, award winning entrepreneur, lively moderator and engaging professional speaker. Prior to funding CWI 10 years ago, she was in the world of corporate banking for 13 years. She wanted rich and vibrant discussions between peers and corporate leaders for women. She thought to herself, why isn’t there a community for women who are managing and leaders? She got into the industry because she felt that there was something missing for women to be able to converse and bring value to one another as peers. The core impact of her company is that the women in the association are heard and have a voice. Sometimes women feel like they have to do it on their own, when in actuality they do not. Michelle wanted to deliver a culture of authenticity and share the excitement and struggles among women in business. The women in this association will receive support from other members, but they must return the favor and support the other women as well. It is not supposed to be a meeting where each woman just says nice things to one another. It is about keeping it real and authentic.

Michelle took this risk because she has always been a serial entrepreneur and felt like this was her next journey. After she sold her last venture, which ran for 9 year, the idea came to her and she felt like it was the right time. The structure of her association is setup so that the women meet face-to-face at hotels and other events.  Before Connected Women of Influence, most associations or women’s groups were about a specific industry, where they targeted women in specific fields. Michelle has so far succeeded in providing variety and a different perspective. It is invitation only because they want to be able to select the best women. Members come on board because they are looking for dedicated mature women who are looking for feedback, camaraderie, and to feel a sense of belonging.

 

Growing from version 1.0 to 2.0: From Solopreneur to Small Business Owner/Team Leader

Michelle faced roadblocks along the way, and the toughest for her was starting a business model that was different in the market place, in one of the toughest economies at the time. She was told that this idea was crazy back in 2008, but she kept going and started this concept and started pitching to people. Funding and the concept were tough challenges for her at that time, but now it has been about sustaining power.

Michelle decided to participate in the Bootcamp since she has known Kim for a long time, and she has seen the miraculous ways of how Kim can start and build businesses. From her reputation, Michelle decided 7 years into her business that it was the right time. She was looking to add something new, and thought that adding a brick and mortar location would allow her to scale up. However, during the Bootcamp she realized that this was not an ideal strategy. The Bootcamp forced her to reboot and rethink her strategy. From the Bootcamp she was able to develop a new strategy of hiring A players, and how to know what an A player consists of. Michelle wanted to pick the right people with the right attitude. Another valuable lesson Michelle gained from the Bootcamp was that every investor is different, and before choosing one you have to treat it like a marriage. She learned that you have to choose investors wisely or they can push you in the wrong direction.

Michelle had some knowledge regarding business growth since she was in a business for 20 years. To her business growth has always been about funding and the way she grew her past businesses were through loans. She has many war wounds from starting these previous businesses. However, Michelle is excited for the future and wants to hopefully move her business out of southern California. She has been scaling upward very efficiently, from just 300 members last year to 500 this year. Her plan in the next 3 to 5 years is to be in more cities with more members. She is also willing to be bought out if it is to someone bigger, smarter or someone who may have a larger reach. Michelle knows what she does well, but if it makes sense to collaborate, expand or sell then she will take that into consideration.

 

Learn From “HerStory”

From participating in the Bootcamp, Michelle has some advice for other small business owners on how to grow. She says there are many different ways to grow strategically, but it is better to be efficient while also trying to perfect your business model and then look to expand. The next piece of advice Michelle had was that sometimes you are not ready to grow so it is better to be patient. In order to succeed she also stated that it is important to attract great talent who share the same passion you do. It is difficult to turn down opportunities but timing is everything. Her last tip was that it is important to find the happy balance between being conservative or risking it all. Connected Women of Influence is on the right track, but even they needed some help. So do not be afraid to look for help if the timing is right.

 

Have a Burning Desire for Business Growth?
We’re looking to you to give business founders the opportunity to expand their businesses and receive the guidance you were provided by our mentors and program. Our goal is to assist small businesses with revenues of at least $250K with a strong desire to grow more sustainable businesses, especially those founded by women, minorities, and military veterans.

If your business or a business you know is ready to grow to the next level, sign up on Founders Business Growth Bootcamp interest page to be in the know of upcoming schedule programs.  See below!

Join our Bootcamp Interest List!