As the Arkansas startup community continues to mature entering 2019, there has been a noticeable ramp up in collaborative efforts to boost the success of early stage ventures in an industry where the failure rate is particularly high.
Venture Center Managing Director Wayne Miller said at some time in 2018 entrepreneurial service organizations (ESOs) in all corners of the state began to intentionally work together and combine resources to aid the development of early stage companies that live or locate in Arkansas to grow their firms.
Miller said those groups, including the Venture Center and Innovation Hub in downtown Little Rock-North Little Rock, the Conway-based Conductor program and the Startup Junkie in Northwest Arkansas, are all dedicated to developing entrepreneurial talent and fostering their respective local ecosystems. But now, he said, they are more apt to work together.
“I think that one of the things I suggest that has really happened in the last six months, we … are really trying to get in lock step,” said Miller, who took over as the Venture Center’s new executive director in November. “Frankly, up until then, we were fundamentally competing against each other instead of working together.”
In the Little Rock area, Miller said he, Innovation Hub Director Chris Jones and Brent Birch, executive director of the Little Rock Technology Park Authority, regularly discuss how to boost the prospect of local startups. Likewise, the Conductor program began as a public-private partnership with the University of Central Arkansas and Startup Junkie in Northwest Arkansas to drive innovation and entrepreneurship.
“I am excited because I have never seen this level of collaboration,” said Jeff Standridge, a former Acxiom Corp. executive who is now chief catalyst for the Conductor program at UCA.
Both Standridge and Jones said these groups working together are tackling such issues as the high success-to-failure rate of local startups, the systemic lack of access to capital for early stage companies, and other issues highlighted in the widely-held Milken Institute’s 2018 State Technology and Science Index. That survey, published in early December, ranked Arkansas 48th out of all 50 states and the District of Columbia on their capabilities and competitiveness in a tech-focused economy.
“What we are trying to do is work together with local startups to address many of these issues, such as access to capital,” said Jones said at a recent pitch event at the Innovation Hub sponsored by local startup catalyst Remix Ideas that highlighted local minority entrepreneurs.
ACCELERATOR PROGRAMS PAYING DIVIDENDS
Despite those challenges, Arkansas is seeing success in key niche sectors due to recent “accelerator programs” that have boosted the fortunes of local startups and entrepreneurs. Across the state, accelerator programs are taking advantage of the state’s expertise in financial services, banking, bond market, retail, trucking, agriculture, food industry, data analytics, healthcare, supply chain and retail sectors.
Fayetteville-based Startup Junkie Consulting recently completed its second iteration of the 10x Cyber Accelerator, a 20-week program designed to scale Arkansas’ high-growth tech and tech-enabled ventures. The program helps scale growth-oriented ventures with annual average revenues from $100,000 to $10 million that focus on offering recommendations for improving software scalability and protection from cyber threats.
The Venture Center’s FinTech Accelerator program has brought global attention to Arkansas. Three years ago, the world’s largest financial technology services company, Jacksonville, Fla.-based Fidelity Information Services Inc. (FIS), stepped in to sponsor an annual rigorous 12-week bootcamp for early stage FinTech startups.
That curriculum included instruction on compliance, regulatory issues, security and risk management and attracted a pool of more than 100 applications from across the globe, including some from as far away as Africa, Switzerland and India.
The success of the FIS-sponsored accelerator program also led the Venture Center in late October to launch a first-of-its-kind community bank-focused cohort program, called the ICBA ThinkTech Accelerator. Organizers said the new ThinkTech Accelerator will pursue companies exploring next-generation lending, artificial intelligence and machine learning, blockchain, payments, advanced analytics and big data, regulatory compliance tools, cybersecurity, authentication, and streamlining customer experience, among others.
On Jan. 9, that program selected 10 companies from a pool of 180 applicants to receive an initial investment of $75,000 to participate in the 12-week residence and mentoring process for companies looking to partner with community banks. Those cohorts will be selected by a committee made up of executives from the Independent Community Bankers of America (ICBA), who will actively serve as mentors to early-stage startups.
Standridge said legislation supported by Gov. Hutchinson to bolster the state’s tech sector is the impetus behind many of these ongoing accelerator programs. Three key bills, sponsored by former State Sen. David Sanders, R-Little Rock, now the head of Winrock International’s Innovate Arkansas program that helps startups and other technology ventures reach their potential, were enacted into law during the 2017 regular session.
Acts 166 and 167 of 2017 overhauled the Arkansas Acceleration Fund created by the legislature in 2011 to help bring high-tech jobs to the state. Act 165 of 2017, created the “Arkansas Business and Technology Accelerator Act.” Under this proposal, AEDC’s division of Science and Technology will create a state-supported startup immersion program that will help local companies and entrepreneurs quickly commercialize their business ideas and concepts.
“It just has been 18 months since the governor really funded the accelerator fund and it is unrealistic to see dividends in the first year of operation,” said Standridge. “But I think we are really going to see the fruit of that decision began to be borne out in 2019 and certainly in 2020.”
Editor’s note: This article first appeared in Talk Business & Politics State of the State 2019 magazine, which you can access here.