From the Crescent City to the Great Salt Lake
It ain’t what you got, it’s what you make
— Shovels & Rope
Last year we launched The Hardware Store — a coworking community of freelance digital professionals, committed to creating equitable alternatives for regional entrepreneurs, and to the revitalization of Allentown, our neighborhood in the City of Pittsburgh. We work together, building websites and apps, media and brands, making opportunities and taking risks. When one person in our community succeeds, everyone does. The Hardware Store is reimagining what it means to be an entrepreneur in the our region. We are creating bold and authentic Pittsburgh-based solutions to the problems startups and small businesses face. Let’s talk about what that does and does not mean.
The Mythology of Startup Funding
Admit it. Entrepreneurs only have a few bad options for funding their ideas. Traditional routes to early-stage investments are structured to favor the institutional investor. Quite fairly, they provide the cash and assume the risk, so they get to make the rules.
We can say with confidence that the criteria used to qualify companies don’t sync with most entrepreneurs’ visions. More importantly, the criteria that traditional sources of funding look for in an investment-worthy company excludes the vast majority of entrepreneurs from considerations.
“According to the Small Business Administration, about 600,000 new businesses are started in the U.S. each year, and the number of startups funded by VCs was about 300.” — Forbes.com
Traditional investors have limited resources (especially in Pittsburgh), so many companies are allowed to fizzle out from lack of funds. Even in the strongest startup markets, these guys are only able to invest in a tiny fraction (0.0005%) of new small businesses per year. These facts alone should discourage most regional startups from pursuing traditional models of investment. But since it’s the only game in town, regional entrepreneurs (including us at times) fall all over themselves, grasping for that golden ticket.
Most of the region’s business incubators operate under the same umbrella. These organizations provide funding, resources, and networks to startups in return for an ownership stake. But they can only afford to support companies that have potential returns that justify the high rate of failure associated with startups. Here’s the math that guides the selection process:
“Statistically, if a VC makes ten investments, two will be winners and create most of the gains in the fund. This means that those two winner investments have to make a 30x return (on average) to provide the venture capital fund a 20% compound return – and that’s just to generate a minimum respectable return.” — AngelBlog.net
Attempts to make your company VC-ready may be akin to pounding a square peg into a round hole. We want you to consider how the pursuit of outside investment through traditional mechanisms may actually lead your company down the path of failure. Maybe your great idea is just a solid 2x company that can pay salaries and do important work. Maybe that should be your focus. Maybe that would be awesome.
The Hardware Store is committed to finding a better way to grow early-stage companies. We seek to deliver real assets that you need – designers, UI/UX experts, content marketing, software engineers, and most importantly, sales.
The Hardware Store – Not your Grandpa’s coworking space
In early 2015, we’ll officially launch our first incubator class. We’re not at all interested in doing what’s already been done. The Hardware Store is committed to providing a pragmatic, resource-rich, and honest framework for startups to explore and grow. One that doesn’t require you to be a $100 million dollar company pushing 30x returns into VC funds to be considered a success. Our goal is to create profitable companies. Companies that pay salaries and allow their founders to explore their passions and independence. While we’re not ready to share the details of our model, it’s safe to say that it’s collaborative, not competitive. It will come from a culture of abundance, not social darwinism. It seeks to empower founders rather than weakening their position, so when they do seek outside funding, they are able to negotiate from a position of strength.
You can get involved in our resource-rich community right now. Our coworking space gives you access to The Hardware Store’s network of digital freelance professionals, as well as physical and digital amenities that will help you shape your story:
✔ 24/7 access
✔ Green screen and podcasting suites
✔ Lights, cameras, and audio capture equipment
✔ Workstations loaded with Adobe Cloud
✔ Access to 40 top-tier software developers
✔ Onsite expertise in UI/UX, SEO, Marketing, Web Dev., Animation, Audio & Video
✔ Free parking
✔ Centrally located, close proximity to Downtown, South Side, and the South Hills
The Hardware Store isn’t just a place to work. It’s an ever growing network of entrepreneurs and freelance professionals dedicated to each others’ success. It’s grassroots business development. It is unapologetic and unabashedly looking for new solutions to the old problems that all young businesses face.
Contact us to learn more about how The Hardware Store can help to accelerate your great idea.
The Hardware Store runs on hard work, talent, and the belief that people will invest in each other if they’re given the chance. We’re always working on a new project, event, or partnership. Keep up with us by joining the mailing list. You’ll receive newsletters for upcoming events, coverage of those events, our startup teams, and community projects, and the opportunity to get involved with a new vision for entrepreneurship in Pittsburgh. Or join us on Twitter and Facebook to be part of the conversation.
VISIT OUR OFFICE
Address: 744 E. Warrington Ave. Pittsburgh, PA 15210
Phone: (412) 376-7284