Creating spaces for entrepreneurial ideas to grow
Red Wing, Goodhue County | Mankato, Blue Earth County
Investing in community, investing in entrepreneurs
For many entrepreneurs, the practice of starting a business can be an isolating experience. Fortunately, southern Minnesota is rich in organizations that provide physical and financial support, often in the form of coworking spaces, incubators or accelerators. Depending on the needs of the community, these support structures can look very different. Some provide desk space and shared tools at affordable rates, others provide space for startup companies and mentoring services, and still others provide seed investments. No matter what form they take, these entities provide connections, help with business planning and save capital for entrepreneurs.
In Red Wing, the approach to entrepreneur support has taken the form of an organization called Red Wing Ignite. The community of Red Wing is situated on the bank of the Mississippi River, and is known for its arts scene and homegrown brands like Red Wing Shoe and Red Wing Pottery. However, the limited land base presents its own unique challenges for future growth, making it difficult to support agriculture or attract large manufacturing companies. In 2010 the City of Red Wing implemented broadband access city-wide, recognizing it as a critical piece of infrastructure needed to stay competitive. This put Red Wing in the position of becoming a US Ignite community, which provides a model for cities to grow through a focus on next generation innovation.
Community leaders wanted to leverage this important partnership for the town to keep Red Wing moving forward. The concept for Red Wing Ignite was formed as a way for entrepreneurs, investors and advisors to share ideas, resources and expertise, with the hope that this would lead to new business creation and expansion. Neela Mollgaard was one of those leaders. “People aren’t necessarily going to flock to your community just because you have broadband,” said Mollgaard. “You need to provide other resources and services.”
The group wanted to be able to use the broadband access as a foundation for providing the tools to move entrepreneurs along the business spectrum, while providing a strong network of support. “There was great synergy between what community leaders wanted, what the city had already implemented with the gigabit broadband, and the new partnership with US Ignite,” said Mollgaard, who became the director of Red Wing Ignite. “It really validated that this was the best way forward to continue building our community.”
In 2013 the group applied for a $20,000 Incentive Grant from Southern Minnesota Initiative Foundation (SMIF) to help launch Red Wing Ignite. “That grant was the first we received and was responsible for jumpstarting the funding of the whole organization,” said Mollgaard. “It helped us implement everything and develop a plan for how we were going to help entrepreneurs, in addition to helping leverage other funding sources.”
The planning process helped Red Wing Ignite learn that in addition to supporting entrepreneurs’ ideas, it was critical to also support students in order to develop the next generation of business leaders. They also knew it was important to connect with the existing business community to make sure it continues to grow and thrive. Red Wing Ignite now provides resources for all stages of businesses development, programming for students, coworking space and educational events.
Mollgaard notes that living in a smaller community can come with big advantages for entrepreneurs. “Startups have the ability in a small town to receive direct access to decisionmakers across sectors which help grow or pivot their business idea,” she said.
Mollgaard stresses that it’s important to think beyond geographic boundaries while serving entrepreneurs. “If there’s a successful startup that is launched in Lake City, that benefits Red Wing, Winona and the whole region,” she said. “It’s realizing that if we can help launch entrepreneurs, it elevates everyone in the region.”
Tapping into a wider network
After years of building an innovative ecosystem in the community, Mollgaard could see that there was room to better serve entrepreneurs and the region. This primarily meant that they would need to build strategic partnerships with others serving entrepreneurs outside of Red Wing to fully provide the support that was needed. “There’s not one organization, business or university that has all the resources needed to properly launch an emerging business in a small town,” said Mollgaard. Collaboration across the region would become key.
In 2018 Red Wing Ignite received a $20,000 Economic Development Grant from SMIF to pilot the E1 Collaborative, a network that puts the entrepreneur first by bringing important connections to them, instead of forcing them to find resources on their own. The network is comprised of economic development partners across the region including Community Economic Development Associates (CEDA), Green Seam in Mankato, Garage CoWork Space in Winona, Collider Coworking in Rochester and Launch Pad in Austin.
Mollgaard has already seen the benefits that this model can provide. A local entrepreneur recently reached out to Red Wing Ignite because he wanted capital to help launch his business, Go Adventures. Mollgaard shared information about his business needs through the E1 Collaborative, and almost everyone around the table said they had resources to help him. Rather than traveling to different cities and finding connections in all of those places, the E1 Collaborative allowed him to quickly navigate the resources across the region to accelerate his business idea. “We put the entrepreneur first and it wraps our connectivity around them,” said Mollgaard.
This model also elevates communities’ capacity to help businesses. Not every city or EDA office has the connectivity to resources that early stage businesses need. If someone approaches their local EDA with a business idea, the E1 Collaborative can provide them with an instant link to important resources across the region.
The Economic Development Grant provided the means to intentionally create the E1 Collaborative. “The grant seeded a model that can grow,” said Mollgaard. “This wouldn’t have happened without the funding from SMIF.” They are hoping to leverage the grant to continue the program with funding from other sources.
Cultivating the next generation of entrepreneurs
SMIF has a history of supporting entrepreneurial networks that enhance the region’s capacity to innovate, grow entrepreneurs and create wealth in southern Minnesota. A $20,000 Incentive Grant supported the Albert Lea Entrepreneur Advancement Program in 2014, which includes a venture capital event, micro-lending, a business incubator and mentoring programs. In 2018, Faribault Diversity Coalition received a $15,000 Economic Development Grant to promote economic growth in downtown Faribault by providing coworking space for start-up entrepreneurs and small businesses. The Garage Cowork Space in Winona received a $10,000 Economic Development Grant in 2018 to provide a series of training sessions and resources for current and aspiring entrepreneurs.
In the western part of SMIF’s region, Mankato has been developing their own approach to innovation in economic development, with support from SMIF. In 2016, Minnesota State University, Mankato, College of Business went through a strategic planning process to determine how to best serve entrepreneurial students and Mankato’s business community. One of the ideas that was formed from that process was a business accelerator and educational center.
A local business leader donated space in a downtown building to support this idea. The Center for Innovation & Entrepreneurship (CIE) officially opened in 2017 with the purpose of providing a pathway for students to interact with the business community and advance entrepreneurial ideas. The center provides workshops where students and community members can get business training, mentorship opportunities for students who want to start a business, and research opportunities for students and faculty to consult on real-world projects within the community.
Yvonne Cariveau, who teaches entrepreneurship classes at the university, was hired as the director of the center. One of the first things she and the College of Business team did was apply for a $25,000 Community Growth Initiative (CGI) Grant from SMIF. Throughout this process, SMIF staff facilitated community visioning, and participants determined which projects to advance with support from the funds. “The CGI process was the perfect way to kick off the center and ask a lot of questions about what the community needed around innovation and entrepreneurship, which I could then use to inform decisions,” said Cariveau.
More than 100 people attended the initial community visioning meeting and presented 17 ideas. The leadership team was looking for programs that would foster entrepreneurial knowledge development for both businesses and students. Two ideas were funded: the Mankato Makerspace, which provides tools, training and space to artists, entrepreneurs and makers, and Connections Rotating Emergency Shelter, which provides shelter to those in need during cold weather, connecting them with community resources and helping them find local employment.
The conversations that came out of these sessions also sparked the idea to implement the 1 Million Cups program at the center, a program that is utilized in 160 communities around the country to showcase local entrepreneurs. “We didn’t know who the entrepreneurs were in town,” said Cariveau. “We wanted to help them but didn’t know who they were.” Two entrepreneurs – one student and one from the community – present their ideas to a group each month. The audience has ten minutes to ask questions and provide advice. “When we first started, we had about a dozen people who showed up,” said Cariveau. “Now we’re hitting 70 or 80 people who come to hear the entrepreneurs each month.” She credits the CGI grant with indirectly launching this program. “It’s a ripple effect,” she said. “The grant made us think about the 1 Million Cups, then that got us going which has caused other ripples.”
Beyond city boundaries
In 2018, Cariveau attended a SMIF-led workshop called Building an Entrepreneurial Ecosystem. It was there that she met Chris Schad, the director of business development for Destination Medical Center (DMC) in Rochester. They learned that they had a shared interest in “design thinking,” a focused method of deconstructing problems, leading to many different solutions instead of just one. This strategy is often applied to the engineering world, but not always in the business world.
Schad knew of a design thinking specialist at Mayo Clinic. The two decided to apply for a $10,000 Economic Development Grant from SMIF to bring the specialist to Mankato for a Design Thinking workshop, while simultaneously broadcasting the event in Normandale by using video equipment purchased with the grant. For the Center, this was an opportunity to expose students and the community to a new approach to problem-solving in businesses. For the DMC, they were able to test if broadcasting the Design Thinking workshop in multiple places would be an effective approach for Mayo Clinic in the future.
Cariveau’s next project is taking 1 Million Cups on the road. “The center is supposed to be regional,” said Cariveau. However, most of the programming takes place in Mankato. By using the same video equipment that the SMIF grant supported for the Design Thinking workshop, they will host 1 Million Cups in Waseca and broadcast it in Mankato, giving entrepreneurs a wider audience base.
The programs offered by both Red Wing Ignite and the Center for Innovation and Entrepreneurship have helped accelerate entrepreneurial growth and innovation in the region. As they look to the future, both Mollgaard and Cariveau see room for growth in how we think about economic development in southern Minnesota.
“In economic development in the past, we’ve viewed success as how many jobs have been created,” said Mollgaard, who is now the executive director of Launch Minnesota, a state economic development initiative. “I see the trend as changing to the amount of new talent and revenue.” Cariveau agrees. “My metrics are about developing the entrepreneur – not necessarily the business,” she said. “The business might not survive but the talent and the person will. If we show them enough support, they become a valuable asset to the community.”
Mollgaard stresses that collaboration will continue to have an important role to play. “We won’t have the impact we need for our communities or our entrepreneurs if we don’t work across sectors with partners in different organizations and different cities,” she said. “We’re stronger together.”
This story is from SMIF's 2019 Impact Report. To read the other stories from the report, and to view maps showing the impact of these programs, visit smifoundation.org/impactreport.