 Boom, what's up everyone? Welcome to Simulation. I'm your host, Alan Sakyan. Really excited to be on site in Sioux Falls, South Dakota. We are at the Zeal Center for Entrepreneurship. We are talking to Dr. Aaron Spencer. What's up, man? Thanks for coming onto the show. Really appreciate it. Very excited to be having a conversation about entrepreneurship, about innovation. Aaron is the director of the University of South Dakota's Innovation and Entrepreneurship Program, and also just has a tremendous amount of experience with teaching about the skill sets of innovation, of entrepreneurship, and getting people around the world to start picking it up and applying it. And it's different ways across states and countries and even individuals and communities because there's so many different ways to apply this. And I think we're gonna end up talking about that quite a bit. We have a live audience, which is super exciting because we just finished doing a talk. So if you guys want to make some noise, audience. Woo! Yeah, that's what's up. I love it, I love it. It's great to have a live audience. So let's unpack a bit about your background because you were awarded the Fulbright Scholarship and there's a bunch of other really interesting things. You spent a lot of time, several six years in Russia. Total of six years. Total of six years in Russia. Four years consecutive and then two previous times for a year each. And that was mostly focused on teaching, researching, and helping promote entrepreneurship in Russia. Of course, they don't have a cultural or historical background of doing entrepreneurship over there. And so it's a big change for them. Yeah, and then in the United States, you were at UC Irvine? I did my doctorate at UC Irvine. At UC Irvine. And then you were doing some, also some very interesting work there with it was parsing language and then... That was actually before that. That was even before that. That was my undergrad stuff where we were working with using computer analysis of text to determine the answer to the Shakespeare authorship question. But that was a long time ago. Yeah, yeah. But the answer is Shakespeare is, in fact, Shakespeare is near as we can tell. None of the other claimants match, so. Yeah, but that computer analysis of text was in the 80s, right? It was actually early 90s. Early 90s. So that's still really, that's a high level accomplishment in early 90s time is computer analysis of text. And then, okay, so then from there, how did you start picking up the interest of wanting to work with different, with teaching innovation and entrepreneurship? Well, I've been interested in innovation, entrepreneurship, small business my entire life. I mean, I started my first business when I was nine years old, something like that. Painting those little numbers on the side of the curb so the fireman can see where your house is. By the way, we need some of that in Sioux Falls because there's so many houses you can't tell where you are, right? There's no clear numbers on them, but I'll leave that for some other nine-year-old. Nine-year-olds in Sioux Falls. Got a business right there. So when I was in high school, I did a computer consulting business, helping local small businesses get computerized. This was when computers were first really becoming a big thing, the advent of the first laser printers and stuff like that. I did some other stuff. I did some hazardous materials work, actually, where we were helping to implement some of the first computer systems to help first responders deal with chemical spills and things like that. And that was all back when I was a kid, really. Then did that stuff with Shakespeare and so forth when I was in college and graduated into a recession. Instead of following where you'd expect based on my degree, I went into database programming and stuff like that. Then after a few years of that, I went back, got into the PhD program and did some work related to primarily how innovation entrepreneurship impacts the economy. This is a very interesting deal, yeah. And one of the things that I looked at was how innovation could be used to respond to things like the California electricity crisis that happened in 2000. And things like that. I looked at using innovation as a response to the terrorist attacks of 9-11. And then after I graduated from Irvine, I was a professor at New Jersey Institute of Technology. Then... That was like eight years? Seven years there. Then went to Russia. When I won the Fulbright in 2010, that was my second year in Russia that I did that. Then quickly teach us about the Fulbright because I thought that was really cool. So the Fulbright program is a program named after Senator William Fulbright. And the program is designed to facilitate international cooperation and understanding. And there are programs at various levels. So there's undergraduate programs for kids from foreign countries to learn English, kids from America to go over to foreign countries and help teach English. Then there's kind of an intermediate level where people typically at master's level are focused on doing some early stage research or something like that. And then there's the scholar program which is for established professors to go and teach and research in their fields of expertise in a foreign country. And that's the program that I was in. And I went to Novosibirsk, Russia, and spent a year at Novosibirsk State University, which is actually in a little suburb of Novosibirsk called Akadem Gorodov or Academic City. That's where they put all the people who were too smart to throw on the camps because they were too valuable for their smarts, but they were too politically unreliable to keep, say, around Moscow or St. Petersburg. So they built this special city for them out in the middle of Siberia called it Akademic City. You started talking about the importance of both international cooperation and understanding and also about the impact that innovation and entrepreneurship have on economics. And how have you seen that through your work? Well, one of the, some of my research, for instance, we found that entrepreneurship is the single biggest driver of job creation. Yeah. And high-tech entrepreneurship or innovative entrepreneurship is even more so. So small businesses create new jobs at about three and a half times what you would expect based on their share of current employment. So small businesses employ 100 people, they produce 340 new jobs proportionally, right? Oh, like with the manufacturing or something like that? Just broadly speaking, it can be anything from a coffee shop to a law firm. Let's take like the business. What we're using here is government definitions of size. So when I say a small business, I'm using fewer than 100 employees. So let's give an example like isn't maybe Taco John's like about that size maybe? Let's use that as an example. Yeah, Krispy Kreme Donuts started that way, right? And they became huge. So what is the three and a half time multiplier related to Krispy Kreme, for example? So if we look at their share, if small businesses are in this category are 20% of the economy, they produce 70% of the new jobs. The Pareto application, yeah. High tech small businesses are about 5.8 times their share of current employment. So if they're 5%, they produce about 28% of 20 or 29% of new jobs. Okay, so if you wanna look at impact on the economy, small businesses have a far bigger impact than big businesses. And high tech or innovative small businesses have an even higher impact. And so it was a percentage of their economic contributions. So when we looked at this time period, big businesses actually lost jobs. Medium-sized businesses say 100 to 500 had fairly small changes, a couple percent, either direction. And small businesses is where all of the growth came from. In fact, 132% of all net job creation came from small businesses. And this was during a time of economic constriction. This covered a period of growth, constriction, and a turnaround. Okay, this is what year is then, are we talking? We're looking at 98 through 2002. Okay, yeah. So a very exciting time in the economy. High growth with the end of the internet boom, the crash, obviously the terrorist attacks impacted the economy. Then in 2002, we get a bit of a recovery from the recession. So it was a time period that covered all sorts of different types of economic situations. And the interesting thing is that that small business effect was consistent across all the years. Now, in 2001, the high-tech ones did have a bit of a, but only in 2001 itself. What would you attribute to small businesses being able to be robust in times of wherever the economy is going? Well, it's not that any one small business is robust and that's the thing about it. The important thing from an economic point of view is that there's so many of them and people are trying new things. And one of them is going to work in any given situation and that's the one that ends up. And the problem is with big businesses, you have a much more limited number of approaches to a situation and if the circumstances change, some of them are going down. And yeah, you're gonna lose a lot of small businesses, but the impact of the handful of successful small businesses taking advantage of that situation growing ends up far outweighing the number of small businesses that fail. In fact, the number of small businesses that fail is kind of indistinguishable from the noise because so many start and fail all the time. Right. And so one of the beautiful things about small businesses is they allow us to try millions and millions of different things all the time and find the ones that actually work. Interesting, so they're the ones that are doing all the combinations of business ideas. Exactly. Big scales trying them out. Yeah, if you look at, you know, get a little technically a little like Joseph Schumpeter or Friedrich Hayek talking about these different models of how the economy works. Well, they're, you know, kind of the laboratory of the experiments are going on, right? And so some of them are going to find the right combination, the right new set of innovations that are going to fit ideally with current circumstances and then take off like, you know, go gangbusters and others are not, right? And one of the things we found is that big businesses, just by nature of being big cannot adapt as fast. Yeah. And so that adaptability of small businesses allows them to take advantage of new situations, grow and become successful. And sometimes what happens is they end up displacing an existing large business and becoming the new whatever, right? So, and that's the beauty of a dynamic economy like we have in the United States or at least like we like to think we have. There's been a lot of pressure to make it less dynamic and that's one of the things we have to resist is, you know, trying to make things too safe. The regulatory burdens. Part of its regulatory, part of its attitude, some of its legal, you know, everybody wanted the attitude component. It's like there's no, when was the last time we saw like CNN or Fox News celebrating young kids being entrepreneurs and we don't see that. The culture is not there. Our approach to risk taking has changed too. I mean, how many people here were alive last time a man walked on the moon? We don't even have one, yeah, yeah. There's a few of you, but last time it happened was 1972. Oh yeah, so a couple, yeah, a couple. Now, we've actually, did you know the United States literally forgot how to make rocket engines? I mean, forget how to fish when you're not actually using a skill. Part of the peace dividend after the collapse of the Soviet Union was we decided to support the Russian economy as opposed to the Soviet economy by buying rocket engines from them. And we actually completely shut down all of our capability to do it here and completely lost that skill set. Damn, yeah, that's, that kind of stuff with production is kind of scary is that if you're not natively manufacturing something you're dependent on another country, you may forget the skill. We've got guys like Musk and so forth that are kind of rebuilding that right now, but it's taken a lot longer than it should have because we let that atrophy. But it's not just the shutdown of some of those skill sets. We're unwilling today to take some of the physical risks that we took back then. Anybody here seen the movie Apollo 13? Well, that was an almost disaster. But what we often forget is just a little bit before that there was an actual disaster and we lost three astronauts on the launch pad. And yet was sad, but it was considered part of the process, right? And we understood that even though we take every effort to try to avoid those types of situations, actual physical risk and not just financial risk or something like that is a part of the exploratory process. And if we try to take all the risk out of the process, then progress is going to just slow down to a crawl. And particularly in one of the things that came up during your talk was this idea of, say, getting off earth, whether it be just for curiosity's sake or for safety's sake in case we blow this place up or whatever, but if we want to actually do that, we have to recognize that at some point in that process, things will go wrong and people will die. And we have to be willing to say, you know what, it happens. And as much as we don't like it, we're actually okay with it and we'll do better next time. And we've become so afraid of that physical aspect that some of our innovation has slowed down. There's these different scales of risk. There's the small business scale of risk where it's just kind of like one person sacrificing their time and money. And then there's the large company scale of risk where if you pivot and try something and potentially fail, that could be disastrous. And then there's potentially country-wide risk as well where the country invests into something. And it's interesting because we still have these individuals that are very much into risk, the guys that base jump and stuff like that. But they're not sitting on top of rocket ships these days because we're not building enough rockets, right? And there's this fear that somebody's gonna sue at some point if, all right. So yeah, we've gotta readjust our balance when it comes to exploration and innovation and be willing to try things. And it affects a lot more than just aviation and SpaceX totally. The same thing is going on with medicine, for instance. The FDA will get in a lot more trouble if it approves a drug that ends up killing two or three people than not allowing a drug that would save 10,000 people, right? And so 10,000 people die because they're afraid that it might hurt two or three. And that's some of that regularity of the changes. Because you can't prove the negative, right? Yeah. They don't get the bad press for something they didn't do only for something they did. So there's things like that we have to perhaps rethink as a society if we wanna make the big progress. Now there are areas where we're making huge innovations, but other things where we've slowed down a lot. And some of those things I think we need to re-evaluate because, frankly, getting off the earth is probably more important to us as a society than another social network or so. So we'll talk about some of the, what you were teaching me about what's going on with specifically the South Dakota Entrepreneurship and Innovation Ecosystem. Prior to that, I just wanna hear what your takeaways have been from professing innovation and entrepreneurship, as well as basically doing a synthesis of what a lot of leadership has been teaching about entrepreneurship and innovation and then disseminating it with your own take. What have been some of those important takeaways? Well, a lot of the stuff that I use is stuff that will be household names in Silicon Valley now, guys, like Eric Ries and Alexander Osterwalder, Steve Blank, Bob Dorf, and so forth. And what I try to do is to take them all and just put them together in a nice package for the students. I think one of the things that's quite interesting, though, is that a lot of this stuff has become available in the last, say, decade or decade and a half. And it's not widely used outside of the Silicon Valley extended community kind of entrepreneurship community. A lot of that stuff would actually be quite valuable for large companies as well, but they have a hard time wrapping their heads around something that was developed for entrepreneurs. Now, on the one hand, I'm okay with that because that's more exciting stuff going on at the small scale where we can get our hands dirty more easily. But at the same time, I wish some of these big businesses would loosen up a little bit and try out some of these new techniques that work so well at that small scale. But now, from an international point of view, it's interesting how the different cultural aspects come into play because with the political social histories of different countries, it impacts the approach to risk of individuals, but there's a lot of other factors that come into play as well. So for instance, in Russia, which is the foreign country I have the most experience with, the education system takes cohorts really starting in preschool. You're with the same group of kids in preschool for four years, then in elementary school, you're with the same group of 30 kids. When you go to college, you don't apply to a college. You apply to a major within the college and you're taking the same classes with the same group of 30 kids for all four years and you maybe have one or two electives your entire four years. And those electives might even be with half of your group of 30. So you don't get to know people in other disciplines in an academic setting. You might know them from other social events or something, but you don't understand, is this guy a good engineer? I'm in business. I don't know if this guy's a good engineer or not because I've never seen him in the classroom. Even subjects that we in America think would be natural mixing situations like a foreign language or if the engineers have to take a business class, those are done inside the department. They have somebody come in rather than sending the people over to the other department, right? And so what ends up happening is you get a lot of people that know their group very well. They know other people in their field pretty well, but they're not well connected to people in other disciplines. And one of the most fertile areas for innovation is at the intersection of disciplines. Yes it is. And so natural innovation is harder there. Now interestingly, they have developed some really powerful formal techniques for innovation, structured innovation. There's a program called TRIZ. Theorio Reschini is a Tachioski Zadac, the theory of inventive problem solving, which is a fairly structured approach to innovation and it works pretty well to a point. But the next step comes on, say somebody over there thought of something. Their natural inclination is to either publish a paper, apply for a patent and put the little certificate on their wall and be done with it, because they don't have the cultural history and they don't have the examples, the role models to go out and start a business around it. And that's one of the things that we were really focusing on over there is to help these people get inspired not just by American entrepreneurs, but by local entrepreneurs that were becoming successful, not the oligarchs that took over something and became instant billionaires, but somebody who actually built something from scratch. And it's gonna take a few more years before we have enough of those in Russia to inspire people in different fields. Let's see it be it applies to every one around the world to see someone in the field succeeding in what you're interested in and then you knowing that you can also become that. Also you mentioned the interdisciplinary or multidisciplinary, the fields crashing together, the overlaps of them are so crucial for innovation and entrepreneurship. Exactly, yeah. And that actually kind of brings me back to South Dakota. Yeah, let's do this. Because one of the issues that we have here in South Dakota is, I mean we all know we have a relatively low population here, right? So population per square mile in South Dakota is 11. And the population per square mile in San Francisco is 18,000, okay? Little harder to get critical mass here, right? But if you consider the entire state actually has a population roughly equivalent or a little less than Metro Omaha, right? You see the kind of problem we're dealing with. Now it turns out that in some fields like biotech, we actually hit a punch above our weight, so to speak. We do considerably better in biotech than anyone would have a right to expect given the population of South Dakota. And it's particularly concentrated in the Sioux Falls area. Is that Sanford and Avera, a lot? Not just, those are mostly the medical side of biotech, but there's others as well like SAB, like Prairie Aquatech, cool, and so forth. There's a number of things. And I and my role with USD work with a number of ones that you haven't heard of yet and hopefully in a couple of years you will. But we actually do reasonably well in biotech. But just because we're doing better per capita than you'd expect, still doesn't give us enough critical mass to draw some of the heavy hitting investment from places like Silicon Valley. We'd actually have to do not just better than average, but four times better than we're doing now to generate enough companies here for somebody to actually say open an office here or something like that. So we have a bit of a disadvantage and we also have a disadvantage of having relatively few role models. You mentioned earlier that in places like San Francisco and to a lesser degree, New York, Boston, you can run into startup CEOs walking down the street. Or at very least some fairly highly placed employee. That doesn't happen as often here, although in fairness, the smallness works both ways. You're likely to know the one person, but they may not be in your field. So one of the things that we need here is a few more examples, and we don't need a lot more, but a few more examples that are going to inspire people. And we need to do a little bit better job of self promotion. Now we've got some of that Midwestern humbleness that's holding us back a little bit. We don't like to brag so much because of the Scandinavian Norwegian bachelor farmers, right? Those of you that remember a prairie hum companion. So there was a great episode on there once where he said, I think he was talking about Minnesota, but it applies here too, he says, everyone needs a personal New Yorker and be bossy for them. Yeah. How are you doing on that entrepreneurship? Yeah. Just this July, CNBC ranked us about number 20th in terms of state business climates. And there were two main factors that were holding us down. We got a lot of A's, a couple of C's and two F's. The two F's were in innovation and entrepreneurship and in access to capital. I think some of that innovation and entrepreneurship grade is simply because we don't talk about what we're actually doing here. We need to do a better job of talking about the innovation and entrepreneurship that's actually going on here. Although let's wait until after we've shown this F score to the governor and a few other influencers so that we can get some more support first and then we'll start talking about how well we're doing. But the other one is access to capital and that's gonna be a tougher nut to crack and there's a few different approaches. We have some... The I6 challenge grants going on. The I6 challenge grant is going on and I handle USD's side of that and that's where I mentioned some of these companies that I'm working with. And that was half a million bucks that is going through like $25,000 in companies. Yeah, so it's a million dollar grant altogether between the various matching and so forth. About half of that, approximately half million dollars is going to $25,000 proof of concept grants for these biotech anything broadly bio could qualify. And there's some exciting work going on there and one of the approaches we're taking is people that are working on say human use medical type technologies, we're finding alternate markets where they can get into the market without the regulatory burden and start making money and use that flow of cash to support their research and their validation so that they can not be so dependent on grant funding and so forth. So that's an exciting way to approach things. So we're seeing some exciting stuff going on there but we also need to free up some of the private capital because we can't just rely on government grants to fund growth in South Dakota because it's not gonna happen. But there are some exciting things going on. South Dakota Equity Partners just closed their first fund at $16 million at their first close. That's great. Which is tiny money by Silicon Valley standards but it's a start. Definitely. It's still though it's a post revenue fund and our biggest hole is in the kind of seed stage between that proof of concept money and when you're actually generating cash there needs to be some private investment that can get you through that stage. There's a reason why even in Silicon Valley that range is called the Valley of Death. Yeah, yeah. But it's a bigger problem here because unlike Silicon Valley we don't typically have multi-millionaire neighbors that say cool idea, here's five million bucks, go with it. I was at a talk with one of the founders of Zynga and he actually gave that as an example and I was thinking that's nice for you guys but it's completely useless for entrepreneurs outside of Silicon Valley because that just doesn't happen anywhere else. The rest of us have to pull that money out of, it's like pulling blood out of a stone, right? It's much harder in the rest of the world. And around the world exactly it's like that. So we have to find and one of the things I would like to see is some local successes at the seed angel level that will inspire more local investors to allocate 5% of their portfolio towards more interesting stuff and not just on Wall Street or whatever but actually stuff that's going to generate activity here in South Dakota. You can make money and make good money while actually promoting the local economy and that's a win-win. A lot of people don't realize that the most successful class of investing is angel investing if you have a large enough portfolio and do due diligence and stuff like that. It takes a little work to generate that size of a portfolio around here because deal flow and so forth is more limited just because of our size. But I think it can happen and I think if we do it right, we can generate some great returns for investors and some exciting activity here in Sioux Falls, Eastern South Dakota, all of South Dakota. There's great stuff going on out in the Black Hills, School of Mines and stuff like that. School of Mines, you know. So it seems like we need to find a couple of success stories. It's about this. That's what I was just about to get at is follow around these success stories with videography, capture what they're doing, highlight that through the news stations, KELOLAND, KSY, highlight that, show it to other both young kids and investors to allocate the percentages of their portfolios, even a small percent like 5% into seed stage companies in the area. And then also we talked briefly about sort of doing things like X prizes in the area, the sort of like what you're doing right now is awarding 25,000 bucks to biotech companies that are showing some successful progress enough to give them that money and ability to try. And so this seems to be like a reoccurring theme is where are the most important areas to target for each community's innovation? So there is some stuff going on right now. One of the big things is the governor's giant vision competition which awards $25,000 each year to the most promising innovative small business. And there's also a student level which I think is $5,000. But I think one of the keys is more follow up with that. Awarding cash is great, but I think we need to- The New Yorker, that's right there. Well, yes, but not necessarily that so much as the mentor that goes along with the money. Because when you look at studies of what determines success and failure in entrepreneurship. The greatest cause of failure is product-market mismatch. You're making something that people don't want. The greatest cause of success is a good mentor. Now that's probably because good mentors help you figure out that mismatch and get it fixed early on. So that you don't have the main cause of failure. But the guidance is invaluable. Absolutely. And sometimes it's not necessarily that the mentor has to have any particular expertise. Although that's often quite useful. But sometimes it's just taking your ideas and talking about them with another person, right? Thinking through them out loud rather than by yourself can make a big difference. Now if that person can give good feedback as well that then adds even more value, right? But it's a bit of a problem here because of again the population issue. We have relatively fewer mentors available than in other places. That was a problem in Russia too because all the successful businessmen are young enough that they're still right in the middle of business and really busy. And the people that are old enough to be retired or all trained Soviet mindset and therefore not very good mentors. Fortunately we don't have that problem here. That's such an important question to ask ourselves though is who do I have that's a mentor to me? So when we ask ourselves that question it takes us into oh well who is my top mentor? Who are my top three mentors? Who are the people that I call with my ideas so they can hit the tennis ball back and augment the idea, teach me what I'm missing. My blind spots. So who are those mentors and so how many of us have mentors in here? Give us some noise for people that have mentors. Yeah, yeah, okay. Okay, so that you said is the largest, a sort of a sister of success of an entrepreneur. Yeah, the research shows that a good mentor is the single biggest factor in being a successful entrepreneur. Gotta make that happen with more people then, more mentors for more young people. Yeah. So okay, why don't we- Now Zeal's a great resource. Yeah. Thad. Thad, shout out to Thad. Shout out to Thad and Zeal Center, yeah. Places like this so there's also mentorship communities as well where you can go and focus and build there with other builders, yeah. Right. And I'm available for free to anybody that's got some sort of affiliation with USD. You know, for other people, well, we'll talk. But yeah, so there are some resources available here. What one of the things we need to do is to make them more visible, make sure that everybody knows how to access them and who else besides Zeal and me is around that you can talk to, that you can explore ideas with. You know, there's things in town like 1 million cups. We have a very active 1 million cups group. So starting January 30th, 9 a.m. at the Museum of Visual Arts every Wednesday. Come out, meet other entrepreneurs, hear from people that are making it work. Some of them will have issues that you might be able to help with or vice versa. Teachers about the March 29th date. So March 29th is a little competition that we have done at USD. It's called I2I or Invent to Innovate. It's a competition for high schoolers and college students. And we are hoping to get participation from, say, call it Greater Southeast South Dakota. So everywhere from Sioux Falls to Sioux City at the high school level. And then at the college level, we'd welcome people from just about anywhere. If you can't travel here, we'll make special arrangements for video competition. But we have a $2,000 grand prize for the college level and $1,000 grand prize for the high school levels. And it's a business model competition. So you present your model more or less in the business model generation, business model canvas type of format. And last year we had four college teams and 14 high school teams participate. So we need to boost the number of college teams a little bit, the high school participation. We need to broaden the geographic scope more than the numbers. And that also does that crowd sourcing of ideas, which I love so much. Because then you're receiving tons of different business plans on how to solve potentially issues of create businesses. It's interesting when you look at things like this, how a lot of people have very similar ideas. Like last year at the high school level, there were two teams working on different assistive technologies for deaf people. Stuff like that. So people are gravitating towards certain types of problems understanding and recognizing that they are problems and trying to come up with solutions. And you see these same problems recurring and coming to people's minds. That indicates that there's something there that somebody ought to address. Now whether it ends up being those high school teams or whether it ends up being somebody else, that's to be determined. But what it does tell you there's an opportunity there. What would you say is one of the main ways to help with the follow through? Because we made that joke about a New Yorker and we made the reference about mentors as well. What's the main way to follow through even for the companies that are getting these $25,000 or $5,000, $1,000? So something that we did in New Jersey that I haven't had, I've only been here for one year. So I haven't had time to put this kind of thing together and it will require finding some additional funding and so forth. But with the companies that won our competition at New Jersey, they didn't win money, although money can still be useful. They won eight weeks of coaching. That's cool. And that can often be much more valuable at helps than the money. In fact, I remember the head of the Russian venture company saying at one of the venture fairs where I was speaking that the knowledge or the intellectual help can often be far more valuable than simply the financial. And in Russia, that was a problem because they had lots of money but they didn't have a lot of people with the actual mentoring skills. So they could invest a lot of money in the startup economy there and they are proportionally, they're investing huge amounts of money into innovation and startups. But they're lacking that critical factor, that mentorship. Here, that mentorship is out there. We just have to be better at building the connections. Building connections, yeah. And then also you mentioned that it was really interesting when you were talking, to me it was like a bunch of young people are trying to arrange different successful businesses and that's the whole tons and tons of permutations of successful businesses are going on across the world in that sense and how do you get more funding into the seed stages of these ideas being developed and the job creation numbers are there. And job creation is huge for economic flourishing. So these things all piece together in this innovation and entrepreneurship arena and the more we sort of study it and understand it and immerse ourselves in it the better we ourselves get at it and make progress in it. Quick question on the way out and then we'll open up for some questions. What is, there's the book, The One Thing. The, what is the one thing you have to do when you wake up in the morning? What's that one action item? An afternoon, what's the action item? Evening, what's the action item? What would you say is one of the best action items and a habit for an entrepreneur, an innovator to carry? It really, there's two different groups that are involved in innovation and the advice would be different for these two different groups. People who are naturally innovative, one of the biggest problems they have is focusing. Yeah. So take somebody like Elon Musk. How many companies is Elon Musk running now? Like five. Five, yeah. Okay, now some of those had, there's no question they'd be doing better if he were devoting all of his time to one instead of bouncing back and forth across five, okay? So one of them is focus. I've known people that could toss off an invention to get a new patent every week, but they could never run a successful company because they're too busy chasing the new thing and can't settle down and focus on one. You have another group of people where the biggest problem is they're not trying new things. So two opposite problems in these two different groups. We need the one group to try new things and somewhere there's an opportunity to have these idea generators over here, feed things over here and have these people take them and run with them. Yeah, yeah. But nobody's worked out the model yet to make that fully effective. It's like the idea tank and the execution tank. Exactly. So think what of those two models fits you best and then bring some of the other one into your life. So if you're an execution person, find a way to bring more ideas in. And if you're an idea person, figure out how to focus and actually follow through on these ideas because it sounds really weird from an individual level to say this, but ideas are cheap. Yeah, 99.9% execution. Yeah, yeah. For myself, it feels really weird to say it because ideation is hard. But at the same time, the fact of the matter is that in the real world, there are a lot more ideas than there are people who can carry them out. Yes. Right? And so it turns out that ideas are actually cheap and being able to make them happen is what's so valuable. Yeah. So if we can do better job at matching those two things up, we can see a lot of progress. Those are really good. Great things. Those are really good rap. I like that a lot. Yeah, so get executing and become a good executor and help execute ideas and teach other people how to do design and ops and engineering and marketing and sales and get stuff out there and start innovating. This has been great. There's been a lot of new ways of perceiving innovation and entrepreneurship that you've taught us about, Aaron. So thank you for joining us. We'll take some questions. Really appreciate you teaching us. Thank you so much. Questions from the audience? Yes. What is the economy in Russia like? I don't know if you touched on what they do, but what are some major differences in why? Well, Russia suffers from having an economic monoculture. So 70% of the Russian economy is tied to hydrocarbons. To hydrocarbons. Oil, gas. In fact, to a degree that for a while, you could correlate the price of the ruble with the price of oil. You said the two things that we're not doing well are talking about our ideas, talking about what we're doing, and capital. Are there, is there a physical space or an event that is not happening in this region that should be? I really think that in terms of events that we do quite well considering. Sioux Falls, again, I've only been here a year. I have been amazed by how dynamic a city Sioux Falls is for a city that is under a quarter million in population. It's just amazing how much stuff is going on here. We need to do a little bit better job of communicating within and amongst ourselves as to what all's going on. You can find it if you look for it, but it's not always obvious. In terms of physical space for other things, there's definitely some issues at the university level, but that could be a whole nother talk or a, you know. One of the problems that we have at the university level is that we're dealing with decisions that were made 150 years ago in terms of where the universities are and what the different universities are allowed to teach and specialize in. So, for instance, the University of South Dakota, which is the flagship state university, the only engineering we have is biomedical engineering. That's because there's this arrangement within the regental system where traditional engineering is handled at mines and South Dakota state. And then, you know, Dakota state has the focus on cyber stuff and we have the professional schools and the liberal arts. But what that means is that the business students don't have the interaction opportunities with the engineering students, because the engineering students are either at the arch enemy school or they're at mines, which is five and a half hours away. Right? We have to find a way to overcome those social-cultural barriers that were established 150 years ago when we decided where the universities would be and recognize that we can be fierce enemies on the football field, but we still need to be hand-in-hand working together in innovation and entrepreneurship because in a state with the population of South Dakota, we can't afford to be at loggerheads with each other. We have to be working together. Like I said, we've got a population in the whole state roughly the same as Metro Omaha. Right? So, we can't get the critical mass that we need if we're going to be siloed in these different places. We have to be willing to come together as a state and say, I don't care whether this research was done at USD or Mines or SDSU or whatever. I think it's a cool tech and I want to cooperate to make it happen. Last question. So, the population factor may seem like, as we discussed, 11 people per square mile in South Dakota. But if I see carefully into this factor, there are industries which require huge manpower in South Dakota, for example, healthcare. Basically, these industries require manpower, but manpower is less here. Still, these industries are surviving and successful. On the other hand, there are industries like IT, they don't need mass manpower, but still it's not successful in South Dakota. So, what is the reason? Well, the reason why, for instance, medical has been successful is because of historical factors. In academics, we call it path dependence. We have a couple of systems that got started here that have grown here. They're headquartered here, Avera and Sanford. Because of their history, they're naturally going to employ a lot of people. IT, on the other hand, one of the things that we need to do is support our IT people and give them, it really goes back to that mentorship issue. And there's some things I'm working on I can't discuss yet that hopefully will help on the capital side, but if we can get that mentorship going, one of the advantages of a lot of the IT things is that they are not location dependent. You can do a web company literally anywhere in the world and it doesn't matter where you're located. So once we recognize that, one of the things that we could do, I think we ought to be poaching firms from Silicon Valley, say, hey look, you can come here and your burn rate is going to be cut by 70% compared to being in the Bay Area. And maybe it's going to be a little bit harder to find as many top-end programmers or whatever as you need, but higher twice as many. There is an old saying in the military that quantity has a quality all its own. And I think we could use a little bit of that approach in the IT and startup world as well. We can be competitive here because we have a lot of other advantages. You build a company in Silicon Valley, it's going to cost you tens of millions of dollars just to get to the point where you can have 10 employees and around here you can do it for under a million bucks. And I'm talking real estate and employees and everything. So there's a lot of advantages here in that respect. Now, I will grant you the weather here is a little colder. They asked me if it would be a problem for me. I told them no, I've lived in Siberia. This is not an issue for me. But for other people it's going to be a bit of a perception barrier at first. Isn't it cold up there in South Dakota? Well, once you've done a South Dakota winter you know how to adapt to it, it's really not that big a deal. Just be careful on these roads. But there's a lot of reasons. I mean, if you look at some of the reports, Sioux Falls was just named one of the best cities to retire. Rapid City has long been a place that's attracted people for retirement. Because of the Black Hills. So there's a lot of things here that can attract people. We need to play up our strengths. Thank you, Aaron. What a pleasure this has been. Thank you so much. Thank you. We really appreciate you coming on the show and chatting with us here at Zeal Center. Thanks everyone for coming out. We really appreciate it. Let's stick around and talk a bit.