Nebraska Global, Hudl leaders talk business-building at YPG event
Young entrepreneurs, students and professionals from the Lincoln business community were all ears when the Entrepreneurship Committee from Lincoln’s Young Professionals Group put on its latest event at the Raikes School on the campus of the University of Nebraska-Lincoln. John Wirtz, COO of Hudl, interviewed Steve Kiene, managing director of Nebraska Global, and Kiene talked about his background, startup experience and tips for new entrepreneurs.
Matt Sherman, owner of Three Pillars Media and a member of the YPG's executive council, welcomed the group and explained why the Entrepreneurship Committee puts on these events. “We try to put on a lot of entrepreneurial events like this, basically around the idea of the culture of entrepreneurship in Lincoln," Sherman said. "We try to get different entrepreneurs together to network, to learn, especially from guys like tonight.”
"I can do better than this"
Kiene, who started his first company at age 17 and sold it at 21, experienced a life-defining moment shortly after that sale, when he was working for another company. The company had a bad quarterly report, and management called for layoffs.
“The afternoon they let people go, I was walking down the hallway to go talk to one of my friends there, and I see him walk out of his office carrying a box with all his stuff — he got let go," Kiene recalled. "And I remember feeling horrible, (thinking) 'What is he going to tell his wife and his new baby? He doesn’t have a job and can’t pay the bills now.' And I just remember being really angry. I just remember thinking that this isn’t the right way to treat people. And at that moment I thought, 'I can do better than this. I can build a software company to be better than this.' ”
The YPG event was held on April 27 in the Kauffman Center at the Raikes School of Computer Science and Management. Photo by Kate Ellingson.
Kiene founded MindVision, a software company specializing in delivery systems for Windows and Macintosh, in 1987. Over the years when employees asked about stock options, Kiene always had the same answer: "When we’re worth something, then we’ll work something out. But giving you stock options in a private company really is giving you something that’s pretty much worthless."
MindVision and eSellerate were sold to Digital River* in 2006, and Kiene kept half of the money and gave the other half to the employees. “It pretty much worked out that every employee got an amount from the sale that was equal to their total amount that they had earned in salary since they had started for me," Kiene said.
Kiene said that one of the most satisfying times of his life was when he got to hand out these checks to his employees, as many of them became instant millionaires. This was especially meaningful to Kiene because he didn’t get into this to make a quick buck. Kiene told audience members they need to have passion for what they’re doing and be prepared for change and unaccounted circumstances. These are things entrepreneurs face all the time and issues that Kiene helps with at Nebraska Global, the Lincoln-based company he helped start. Nebraska Global is a software investment company with a $20 million fund the company has raised from investors in Lincoln. Its goal is to build long-term, sustainable companies and also help with the effort of keeping smart, young Nebraskans in the state.
Throw away your business plan
Wirtz asked Kiene how entrepreneurs should pitch to him at Nebraska Global. “First thing is, if you have a business plan, throw it away," Kiene said. "Business plans are obsolete. What you need to (know) is — what is your product? What is your differentiator? How are you going to bring it to the masses in a way that they’re going to be passionate about it?”
Kiene said that plans and projections change the day you start because things happen that you don’t anticipate. He said entrepreneurs should concentrate on where their business is innovative, where their idea is innovative and where it is different. “The business plan is execute," he said. "It’s one word.”
Putting Wirtz on the spot
Towards the end of the event, Kiene turned the table on Wirtz and asked him about starting Agile Sports. Wirtz, a Raikes School graduate, started the company with two classmates as they finished MBA degrees at UNL. The company creates web-based software that helps sports teams access video and data on the internet. The Hudl product provides video, play diagrams, game-planning and communication online so that players and coaches can access it from anywhere.
Wirtz talked about turning away hundreds of high school coaches because they didn’t have a product that fit them at the time. They had to re-evaluate and adapt the system for the high school market. “That part of our business has been incredibly explosive," he said. "We now work with over 3,000 high schools, across 16 different sports, 10,000 different teams."
Wirtz networks with students and YPG members after the event. Photo by Kate Ellingson.
Kiene ended the event by giving his two cents on the availability of venture capital in Nebraska.
“There are three things that go into a software company: money, people and ideas," he said. "And the thing we have the most of is money. There is no shortage for venture capital for good ideas from good people in this state, absolutely no shortage. It’s a misconception because the people that are complaining that there’s no money, are the people that can’t get money anywhere. It’s not that they can’t get money from Nebraska; it’s that it’s a bad idea or they’re simply not qualified to do it. That may sound harsh but it is true that a lot of people that can’t get funding can’t get it anywhere. What we’re lacking is the refined ideas and the right people.”
Note: Sherman filmed Kiene and Wirtz's conversation, and we'll post the video soon.
*Update, 5 p.m. Thursday: In the version of this story originally published, it was incorrectly stated that MindVision was sold to eSellerate and Digital River.