Pessimists probably don’t succeed as venture capitalists, and Ryan Broshar seemed about as sunny as a person can be early on a Monday morning in December, arriving for an interview after his last day as head of a retail Techstars program in Minneapolis.
In almost an hour, he didn’t even come close to uttering a discouraging word about our region’s entrepreneurial climate and potential.
“The narrative has changed” about the Twin Cities in the three years he worked at Target + Techstars, he said, citing both promising data and anecdotes he’s collected. That includes hearing from people in technology who grew up in the region and have called to say they are finally thinking of moving back.
The most interesting insight he shared was that entrepreneurs have come to see all the big corporate headquarters companies as a great regional asset, sources of know-how, support and maybe someday employees. He did allow, however, that they might get too much attention and keep the spotlight off the achievements of entrepreneurs.
Target is one of the biggest, of course, No. 39 on the most recent Fortune 500 ranking. The Minneapolis-based retailer generated some buzz locally by linking arms with the tech accelerator Techstars more than three years ago, and Broshar was one of the people behind the project.
Broshar, founder of a small, early-stage venture firm, had once lived in Boulder, Colo., Techstars’ hometown, and had served as an adviser to Techstars companies. He helped introduce Techstars and Target to each other and then, he said, he got out of the way.
“I didn’t think, we should have Techstars here and I needed to run it,” he said. “I just wanted it here.”
Techstars is one of the best-known sponsors of what’s called an accelerator, enrolling “classes” of startup companies for a crash course in business building. In addition to getting a lot of work done in a hurry, founders hope that going through a program makes it easier to get capital to grow.
For big companies like Target or Cargill looking at an accelerator, one appeal is a front-row seat when looking for innovative ways to do some of the work they do. A good example for Target was a little company in the first class that helped big retailers more closely monitor what really happens in the factories of their suppliers and in other parts of their long supply chains.
“The first year [in 2016], we did not have any Minnesota-based companies,” Broshar said. “What was interesting is that all but one person in that class, the founders had literally never been to the Twin Cities. What we found was once people got here, they really loved it.”
Two of these first companies later moved their headquarters here.
When the accelerator wasn’t “in program,” requiring long days working with entrepreneurs, Broshar spent a lot of his time scouting companies and recruiting for the next class. And he said the job became easier.
Target has said goodbye to Techstars to form a similar accelerator program with the German retailer Metro AG, meaning it’s likely at least half of the startups chosen will be based in Europe. But Cargill and Ecolab about a year ago formally announced their own partnership with Techstars for a program based in St. Paul.
The goals for Ecolab sound a little like Target’s three years ago, as Ecolab understands that there could be plenty of good ideas for its operations that come from outside the four walls of its facilities.
This isn’t the only innovation initiative Ecolab has underway, said Meredith Englund, Ecolab’s senior director for strategic technology partnerships, including an upcoming “reverse pitch” day when big companies including Ecolab plan to share problems they hope entrepreneurs in the region then help them figure out.
“The magic of a startup isn’t identifying a problem, it’s going out and solving it in a new and different way,” she said. “It’s critical to companies like Ecolab, who have a lot of expertise and knowledge and deeply understand our customers, to share that with startups that bring innovative ideas, the latest technology, and unending and boundless energy.”
Broshar said it’s not easy to find in a region the size of the Twin Cities what he called the “tight network of access that you have” with big companies in several different industries.
“If you’re a founder starting up a company here, you’re one degree away from 18 Fortune 500 company executives,” he said. “There’s a huge creative class of people” here working for those companies, too, potential collaborators as well as candidates for jobs if the startups take off.
Broshar signed on with Techstars + Target planning to stay a year; he enjoyed it so much he stayed three. Now that Target is working with Metro, he said, he’s happily gone back full-time to his venture capital firm, St. Paul-based Matchstick Ventures. It’s well on its way (as of an October filing) to raising its second fund, this one of $25 million, for early-stage investments.
He’s added a partner in Colorado, and while that looks like he might be taking his focus off the Twin Cities, Broshar explained that connecting Minnesota founders with business ideas and capital that might originate elsewhere is a big part of a venture capitalist’s job.
Broshar arrived to a breakfast meeting wearing a Patagonia jacket over a Patagonia vest and then described himself as a champion of the Bold North celebration of Minnesota’s winter you may remember from Minnesota’s Super Bowl committee. “People say, ‘Why would you want to be in Minnesota? It’s cold and miserable there,’ ” Broshar said. “No, it’s only cold.”
He suspects Minnesotans don’t yet realize that they should be thinking of the Twin Cities as a vibrant node of entrepreneurship and innovation within a network that includes other midsize cities like Seattle, home of Microsoft and Amazon.com, and Austin, Texas, recently selected by Apple for a new campus
“Minnesotans would never put the Twin Cities on the same list with Seattle, Denver and Austin,” he said. “You know who does? People in Seattle, Denver and Austin.”