 Welcome again to ThinkTac. Welcome to the Art of Thinking Smart. I'm a guest host. My name is James McKay. I'm stepping in for Michael North today. Unfortunately, Michael North's daughter has some health issues in Vancouver, so he's unfortunately not able to join and we wish him and his family the best for the operation. So the show today is called Investment in Innovation Pacific Style and today we're talking with Shenoa Farnsworth of Blue Startups and they're working hard to build a whole innovation series of companies in Hawaii. So we have a short video we'll show, but if you want to tweet us, you can tweet us at ThinkTac-H-I or call us at 415-871-2474. So again, Shenoa's work managing partner at Blue Startups. We'll have a quick look at the video for an introduction and then we'll have a chat and talk story. This is a rather dated video, so she'll be discussing a bit more where they've gone from when this was filmed. Yeah, BlueStartups.com. So it looks like a lot of fun anyway. That's what innovation's about. It's not about hard work and just not having fun but also enjoying what you do I think is probably one of the key things of the successful innovators. Okay, so sorry about the sound issues with that video, but you definitely check it out on the website, BlueStartups.com. And so welcome, Shenoa, to the studio today. Thanks for making the time. I know we all have busy schedules, so would you like to tell us a bit more since the video didn't have a lot of information about what is Blue Startups and how do you guys feel? Blue Startups is a venture accelerator was launched here in Honolulu in 2013 with funding from the state of Hawaii and in partnership with the Tetris company, which is run by Hank Rogers and his family. So Hank and Maya were heavily involved from the beginning in that, you know, birthing of Blue Startups. We've now done nine cohorts. We're in our ninth cohort right now, which means that 70 startup companies have come through our program. The program is a combination of investment and mentorship, so we provide a small amount of seed funding up to a hundred thousand dollars in stages and a heavy dose of mentorships. It's a 14-week program, 13 weeks here in Honolulu and one week in the Bay Area, with over a hundred mentors interacting with our companies and giving them advice and helping them grow and all that good stuff. And is there it's more of a technology-based? It is technology focused. Primarily we're focused on companies that have global ambition, so companies that want to scale globally. So we don't serve small businesses, but high growth businesses. Right, right, right. And I'm familiar with what's called now the elemental accelerator, which used to be the energy accelerator. Obviously their birth span a lot more than energy, so it makes sense that they rebranded to the elemental accelerator. So that in my mind would be the two foremost incubator hubs for businesses in Hawaii starting and expanding. Their goal too is also like global change of sustainability initiatives generally. So how do you guys sort of play together in the incubator spaces? Yeah, I mean we're good colleagues and friends. In fact the elemental accelerator, when they were energy accelerator, ran their first program out of our space. And we've been partners ever since. You know, when we get a good application in their space, we send it over, we try not to duplicate effort. So we're really again more pure play tech and they're in, you know, the spaces of energy and water and security and stuff. So there really isn't much overlap in terms of the type of company that we're working on. Which is good then obviously if there's a clear focus. Yeah, we've had like one, I think, company in common, which is Smart Yields. Okay, yeah. So that's the AgTech company. Right. Yeah, so we both had that company come through our program. Yeah, and so they can do both. They can. There's no reason why if you've got the time in the interest. And many people do both. We've had companies do both elemental and ours. And we've had companies do Accelerate UH and ours. So yeah. Interesting. If you're a startup in Hawaii, I think you need all the help you can get. So you might as well take advantage of all the resources we have. Right. So good segue for this show. Yeah, I think you're smart. So obviously Hawaii is not the easiest place to start a business and to keep it running. And we consistently get pretty low grades of if you're going to start a business in the US unless you really love surfing and sitting on the beach don't come here. Yeah. But what do you think then sort of some of the key attributes of the individuals that make up these companies that do succeed here? Like a list of things that you've sort of identified over your years of doing this stuff where you can be like, aha, there's a secret sauce, a recipe or? I don't think there's a secret sauce. It's just a lot of hard work. And those that are willing to work really, really hard are the ones that are succeeding. It's a pretty actually straightforward equation. You know, if I see an entrepreneur who is going home at five o'clock every day, I already know they're not going to succeed. It's just a guarantee. But your video had them all like stand up, paddleboarding on the beach and hanging out. Yeah, we totally believe in having fun and taking advantage of the beautiful environment here. But that has to be balanced with a heavy dose of working really hard, you know, because it's a competitive environment in, you know, the world. Right? So what I tell my companies is there's somebody right now in China, in India, in, you know, Yugoslavia, whatever. Vietnam actually is now. Vietnam, Malaysia that are working their butts off, you know, on this same idea with this same product, tackling the same market, which is the planet. So you can't, you know, think you're going to get ahead by being smarter or being, you know, more efficient on, it's just hard work. Oh, well, disappointing lessons of today. So and on that side, like, if, like maybe talk about you personally, if you don't mind, like the history of how, like, where did you come from? How did you end up where you are today? And maybe is that for you? You've just kind of worked where you wanted to be. Did you set a strategic goal? Because obviously goal planning and achieving those goals are crucial to any business. Yeah, I mean, I'd love to tell you, yeah, you know, when I was five, I said, I'm going to be a venture capitalist and I'm going to take over the world. And these are the ways I'm going to do it. Yeah, my career has been much more material than that and opportunistic, right? So things I gravitated towards things that I found to be stimulating and exciting and interesting. And I've just tried to basically stay in that mix of things that are interesting, exciting, and stimulating to my mind for the bulk of my career. You know, once I'm bored, I'm going to go do something else. And so the startup world is, you know, a good match for that, right? It's constantly evolving. It's, it's ever changing. It's, it's, you know, every day is a new challenge, a new day. So there's definitely no room for getting bored or, you know, feeling like what you're doing is rote or not impactful. So those are the things that I think matter to me most. So I just tried to, like, stay in it. Yeah. And you're in an interesting role, obviously, because you kind of oversee all these companies, because it's kind of like you're, you have all these little crazy kids doing all these really interesting things. So you just sit at the dinner table. What did you do? What did you do? Oh, that's interesting. Definitely, there's, there's definitely the mommy analogy happens a lot. I'm called mom bear. I'm called mother hen. I'm called. I thought I just made an upset. It's definitely the case I am in real life a mom and in work life a mom. And people always ask me, you know, which of my companies are my favorites? And they're all my children. I love them all, you know, which of course is not true. I do have favorites. But, you know, there is definitely that kind of role that you play. And it's a tough love kind of mom, you know, obviously you can't be soft. It's not coddling. It's not, it's not nice, you know, necessarily, but it's strict and demanding and but supportive. And most of the companies that you are mentoring, or is that the right word for it? Yeah. Incubating. Are they like mostly from the Hawaii community? Or you do get a lot of? Yeah. So actually the way the program is designed, we is 50 50. So 50% of our class is always from Hawaii, because we are state funded. And also that's part of our mission to serve the local entrepreneurship environment here. And 50% of the class is from outside of Hawaii. Those that are coming from outside of Hawaii come from all over the place. But we have in recent years been targeting more and more Asian entrepreneurs. You know, we think Hawaii is a great place for doing business with Asia, you know, where East meets West. And we have a big event called East meets West every year where we bring in entrepreneurs and investors from both sides of the Pacific. So that's a big focus for us. So recently, we've, you know, recruited teams from Korea, Hong Kong, Singapore. So, you know, we're, we're looking more and more in that direction for deal flow and specifically looking at companies that are interested in getting into the US market. That's kind of the niche for us. And vice versa as well, we look for companies from the US that want to get into Asia. We think again, something unique that Hawaii can offer in the world of startups and accelerators that nobody else can. Yeah, geographically, obviously, we're very well positioned for that. And culturally. Culturally too. Yeah, exactly. There's a lot of reasons for that. It's a great model. And obviously, that's, it's a very global economy as you know today. So you can't be kind of looking at one state Midwest now. Yeah, so we like the mix of, you know, offshore in house kind of mix of a culture and mix of, you know, work styles and, you know, it's good for our local entrepreneurs, I think, to see the pace at which the rest of the world is working. Often, you know, breaks them out of there. Yeah, like, Oh, okay, I see that guy never goes home. You know, we have a team right now from Portugal. And I don't think they go home. And I haven't been there when they're not there yet. So and that's that's what it is. Yeah. So that's an interesting model. And I think it's great because one of the sad things and I've only lived here about six years now. I moved from Arizona, where you know, it's built on cheap real estate and just building new suburbs every month, it seems. And so obviously housing there is very affordable. I'd say cheap compared to Hawaii. So it's sad. I find when I hear about say graduates from UH, they can't find work here. So they go to the mainlanders because their cost of living is lower thinking they'll come back and most of them don't. So that seems to be an unfortunate side effect of the increased cost of living here. So we kind of, in my opinion, need these companies to be putting down roots locally just so the graduates have have somewhere to go. So on that note, is there a sort of a program or sort of an emphasis on your companies when they're recruiting to say partner with UH, because you've already mentioned UH, Accelerate UH, which should be another incubator. But obviously you want good talent that's smart, passionate, capable, which a lot of these graduates seem to be. But they're also another word pretty cheap, like they cost effective, right? If you can get someone that's a brilliant student, that's very capable, they're willing to work for a lot less than well me, say for example. Yeah, I mean, I think it's recruitment is a huge issue for our companies. Great. It's a huge issue for the industry, right? In tech industry, there's a huge war on you know, talent right now and trying to secure talent, trying to keep talent. I mean, it's it's everywhere, right? So we talk about the problems of not enough talent in Hawaii, but really that problem is universal to this industry in San Francisco. It's 10 times worse just because of the competitive environment there. So you know, we do encourage our companies to recruit and you know, some have really put down roots here, it's starting to happen, but it's a slow process. And many do feel like they have to go to the mainland to succeed. So you know, what I would say in terms of like, where we're at, we have this very kind of robust, early stage, startup scene, you know, past a certain level of maturity, it gets pretty tough. And then some of that's real, some of its perception. And you know, there are things like cost of living they that are hard to get around. It is expensive to live here. It's more expensive to live in San Francisco right now. That's one benefit we have. We can no longer say that it's more expensive than San Francisco, you know, so I can tell you that that's at least we're on par in terms of cost, but there are a lot of advantages obviously to being there. So it's a constant battle that we're fighting, I think, to keep our companies here and to also retain talent. One of the things we've wanted to do for a long time is kind of a, you know, more of a come Aina, come home program, or we're putting out the call to come Aina, like, hey, there's programs here, you can if you're going to start a company, come started at home, you know, or bring your company here, or what, you know, come and join a company that is here, that sort of thing. So it's hard to organize that effort, right? There isn't like this list somewhere, right, so line up, you know, here they are, you can send them an email, you know, it's more of a word of mouth kind of thing and coconut wireless. Yeah, but I think, you know, the reputation of why and started paradise is growing. I don't go anywhere now where they haven't already heard about something happening in Hawaii, like, not sure what's happening there, but there's something happening there is kind of the, you know, the reputation right now that we have out there in the startup world globally. So I think that's our opportunity to take advantage of. And so say on the topic of innovation, and as you think is there more that the state could do to help foster this environment, say, in regards to sort of tax credits, or even say, like, UH State Institute, sounds like you're tapped for good resources. So maybe that that sort of network of what they're pushing towards needs to ramp up their IT side, maybe on that graduate soil. Yeah, I mean, I think it's really hard, you know, for government support to be done in the right way and to be done consistently. I mean, we got started with government support. And so we're really grateful for that. And I think there are other programs that we could do in addition to the programs that are supporting the accelerators. You know, I'm a, I don't know how this would, you know, take place. But if there were a way to, you know, kind of ameliorate the cost of living issue for startups, I think that would be huge. So even housing or, you know, I mean, I don't think it has, it could be something out of the box. I don't think it has to be tax policy necessarily. I mean, that's the first thing that people think of when they think of incentives for businesses. But I think, you know, very simple things like just make it easy for people to move here, live here. It's very hard for our companies that come in for our program. Housing is the number one issue. Interesting. So you can have like a, yeah, a Welcome to Hawaii pack where there's one package where they can move into even an incubator space where it could be co-housing or something. That's right. I think I would love that. And, you know, people want to come to Hawaii. Any excuse they could think of to come to Hawaii, they're gonna, they're gonna do it, right? Well, you're just saying, you know, and then if you're providing them a welcome packet, I think that could go a long way. And I don't think it would actually cost the state that much. You know, it really, I think, could be a very cost-effective way of attracting accounts. So it sounds like a good bill, maybe, to propose you some legislatures that really understand the issue. Well, you gotta start somewhere. But, yeah, no, I like everything you've got too much to do. Never enough time to do it. Hard to lobby. Yes, it's a lot of work. Well, that could be maybe another topic would be time management and priorities of tasks and how we schedule that out. So, I think we do for a break soon, are we? Because we'll be back and we'll have a break and we'll be back in a couple minutes to chat about time and task management, I think, is a good one. Uh-oh. Steven Phillip Katz, I'm a licensed marriage and family therapist, and I'm the host of Shrink Rap Hawaii, where I talk to other shrinks. Did you ever want to get your head shrunk? Well, this is the best place to come to pick one. I've been doing this. We must have 60 shows with a whole bunch of shrinks that you can look at. I'm here on Tuesdays at three o'clock every other Tuesday. I hope you are too. Aloha. Aloha and welcome back. James McKay, guest host for Michael North on the art of thinking smart. And today we are joining Shenoa Farnsworth with Blue Startups Hawaii. And we're chatting about what makes companies' startups specifically work in Hawaii under her program and leadership in these programs. So we left on the break of talking about how we could create legislation to help more of these companies do better here, put down more routes, create local employment, and doing so might entail some additional legislation, which would foster sort of the if we don't everyone hates tax credits, right? That doesn't pass. It's like how do you create jobs and affordable housing is the issue. And I think every startup is probably challenged with that, like there's endless things they could focus on. So you know I'm in the space of energy, like I could be writing energy legislation the entire day and I don't understand. So that's not a good use of my time. So in these programs your applicants sort of pre-qualified, they experience people or do you have to provide a lot of them with say time management skills, email management skills? I mean I'm sure everybody could use time management and email management skills and sometimes we do have workshops on that kind of personal more personal growth and how to manage and how to grow a team, how to manage a team, how to lead, things like that. We don't spend a lot of time on that, we do spend more time on the nuts and bolts of running a business. So you know how to do financial projections, how to go to market with the product, how to acquire customers, what that's going to cost you. What does your customer even want, right? That's how we start the program, customer discovery. Make sure that you're building something people want to buy. Some really simple things that often are skipped in the entrepreneurial process. Because the entrepreneurs generally are so passionate about their product, they just think it's going to be the next Vegemite maybe? Absolutely, they 100%. You realize that was a terrible analogy. Well Vegemite is very popular. Well it depends. If we had the next Vegemite I think they probably make a lot of money in Australia. Yeah yeah, nowhere else. You're not global right? It's going to be peanut butter or something Peanut butter would be good. Yeah so I think you know they come with different skill sets and we try to compliment those and we're also we do some coaching you know. We notice that you're coming across this way because so much of success in this realm is is personal, it's relationships. Right definitely. Especially in Hawaii right? Everywhere. I mean are you instilling competence when you go and meet with an investor? Right? That's about a whole host of things. Your body language, your actual language, content that you have, you know the facts that are backing you up. I mean it's a whole series of things but if you go in looking sloppy, you know talking, you know, in a disrespectful manner, things like that, it's very easy to turn people off and they simply don't care how good your company is. Right? They have any reason to distrust you as a person and really that's the main issue is trust then they're not going to write a check. Right exactly. Or I want to have anything to do with your business. Yeah. I mean so the people are the most important part of the equation for us right? Is this the person that's going to take this idea or company from point A to point B? You know and if it's you know if it's not the person but the idea is brilliant, it's really easy to get lured in by that and we've done it many times. Trust me I've been a sucker for it so many times but it really doesn't matter at the end of the day how brilliant the idea is if you can't execute on it and if you're not the right person to carry that ball, it's going to fail. So in that situation do you sort of tactfully or diplomatically suggest they add someone to their team? We try. We try. We definitely do. I mean there's a certain point in the program it's our halfway point where we kind of switch modes from being supportive to being tough love. Like okay this is now most of my relationships. Yeah you know we're seven weeks in and here's what we've observed right and these are the things that you're going to have to address in order for this company to succeed and many of them are personal you know you are not going to be the CEO of this company if it's going to succeed you're going to have to replace yourself or you're going to have to build your team in a complementary fashion you need a person that knows this or you know whatever the the issue is So can you talk to about say the ideal company say if you've got one or two that you think are just the because this is you know the what people want to take away from this program is how can they be that company I guess yeah how can they emulate success is there a couple of companies that just are stellar on every level that stand out? I mean there's probably no company that's stellar on every level right but there are certainly companies that had uh I'll take uh bolted technologies for example that's one of our companies right they had a great idea so that's a building block they had a great founding team of the next building block and it has to be a team that's the other thing we see a lot are solo founders we can't invest in solar solo founders and we won't put them through the program we've again learned our lesson there you cannot execute as a solo founder in a way that needs needed in the fast enough pace and is that because simply there's just really too much to manage there's just too much to do it's just physically impossible yeah it's just too much to do and it also is generally a signal that you know maybe you're a control freak or you know then those things will come back to haunt you in other ways you know you you're not able to let go enough you're not able to bring other people into the company and all of that so so team is really really important for us and then you know within that team definitely it you have to have a leader you know and it is not an egalitarian process you know when people come in and say we're 50-50 partners and da da da I'm like oh boy you know like who is the CEO tell me right now because you're gonna need to know that and there is no such thing as 50-50 partnership right somebody has to lead this thing and they have all humans respond better to that kind of scenario than they do to the multiple head kind of organization yeah because I guess if you have any you know any decision point you don't want to be stuck in it's that it's everything it's just the it's you know having vision it's leading the team it's all of those things okay so it's it's a whole combination of you know of that that that makes it important for that person to be leading all right so hard work no eye and team perseverance I think that's probably my three and stop surfing so much pretty good I'm not gonna listen to so you keep surfing you just have to work hard to make up for it I never surf with a watch so all right so now well thank you for coming in I really appreciate it I hope you guys have learned a lot out there and thanks again to David Chang from Wealthbridge for hosting this show original founder and again best to Michael North and his family and quick recovery to his daughter up in Vancouver so I hope it goes well and we'll chat to you again soon from Think Take Away again I'm James McKay with Amoresco and have a great day Allah