The new Verge questionnaire and screening process for attending meetups prompted what I think was a good discussion yesterday about how to best manage a burgeoning startup and innovation community.

I think I have a good understanding of and appreciation for the motivations of people on both sides of the aisle. It’s actually a somewhat old debate that has been going on for about the past 18 months in Indianapolis. Let me tell you where I stand:

1. Indianapolis needs a non-exclusive, everybody welcome tech event and I think Verge is in the best position to provide that event
2. Indianapolis needs a variety of smaller, exclusive, niche events organized around a specific purpose
3. Most importantly, the Verge organizers should be able to do whatever that want with the event. Sometimes that means firing an old customer to better serve another one.

1. Indianapolis needs a non-exclusive, everybody welcome tech event

There is no better place to inspire future generations of entrepreneurs or future generations of “support” entrepreneurs, that is the people who join an organization early on but aren’t interested in ever being founders, than an event like Verge. Being around people who have gone out and started something, successful or not, provides people with role models and the confidence of “I can do it too.”

This also includes people who are “intrapreneurs.” These are the people who aren’t starting companies, but work for big companies and have an entrepreneurial mindset. Micah Baldwin of Boulder, whom you might recognize as a Combine speaker,  talks about the important role these people play in every startup community.

I think the new Verge screening process excludes people who might one day be valuable to the startup community and there is no other event to take its place. Some could argue Techpoint should play a role in uniting the larger tech community, but for whatever reason, I don’t think they’re motivated to or they don’t know how to do it in this new world of tech we live in.

I don’t think it’s worth the effort to screen out social media experts and consultants and lawyers just looking for business at the risk of throwing the baby out with the bath water.

2. Indianapolis needs a variety of smaller, exclusive, niche events organized around a specific purpose

We already see some of this in play with events like Indy.rb, Linking Indy Women, Indy Hackers, and the Indy Social Media breakfast. These events are smaller and because of that, they’re naturally exclusive. If you don’t fit in with the group, you’ll feel really uncomfortable showing up. I actually think every motivation for making Verge more exclusive could be better served by an even MORE exclusive smaller event.

3. The Verge organizers should be able to do whatever that want with the event

I’m not just capitulating when I say this is the most important. It is the most important because the Verge organizers are the ones who make this happen and I can’t see them being motivated to keep making it happen if they’re not building something they want to build.

If they decide that Verge isn’t going to be that open tech-event where everyone is invited, then it’s an open door for someone to create that event. I think it will be a lot harder now because it will seem like the new event is just a poor-man’s Verge, but it’s not at all impossible. 

Should Verge be more like SXSW Interactive where it gets bigger and bigger every year and the original people complain about all the new “posers,” yet it’s still the place to hear about the biggest trends in tech? Or should it be more like Ted, where a large part of the value is that no one gets through the door unless they’re qualified, thus, you can be 100% certain EVERY conversation is with an A-lister.

Both models have a place in this world. 

This post originally appeared in Indy Spectator’s new endeavor Startup Spectator, an email newsletter for people following Indianapolis Startups. If you’re reading this, then you’d probably find some great things to do in Indianapolis by signing up for it.

Founders can hide their startup from the boss at their day job, but they can’t hide it from me. Until Google fulfills its promise of one day putting a tracking chip in every one of us, here’s your best guide to finding Indianapolis’ Mark Zuckerberg…

Broad Ripple Avenue

Hubbard & Cravens is the adopted co-working space for those who can’t afford offices and a hot meeting place for those who can. H&C is the best place to overhear investor pitches, first hire interviews, and other startup gossip. Friday after lunch is the best time to spot a founder. If you get there after 4pm, you missed them. They’re grabbing a drink at Barley Island, Brugge Brasserie, or the Broad Ripple Brew Pub.

(Expert tip: If your startup is in stealth mode or you don’t want to be interrupted, head to “Perk Up” which also has free wifi and is off the main drag.)

Monument Circle

Downtown has its startup aura, too, for many reasons, not the least of which are its being home to start up success Exact Target, The Venture Club, and the 21st Century Fund. For startups trying to attract out-of-town hires, there are few better venues than an office overlooking Monument Circle for selling the virtues of both Indianapolis and an equity-based salary.

The Mira Awards

An event not a place, the Mira Awards are the Oscars for Indiana’s tech industry. Although the companies winning the awards are easily found in yesterday’s news, the attendees are usually working on the next big thing you’ve never heard of. Collect extra drink tickets for an easy conversation starter.

Indianapolis International Airport

“Crossroads of America” or “Fly-over State,” whichever motto you choose to adopt, doing business in Indiana often means getting out of Indiana. Here’s where cyber-stalking can help you identify your next angel investor since everyone likes to look like a jetsetter with their Foursquare checkin - although, all the early adopters have already switched to Planely.

IUPUI

It’s a good time for startups that merge the art of design and the science of computer programming, and IUPUI’s Media Arts & Science Program in the Informatics school does just that. Look for a class called “I590 - Entrepreneurship in Informatics” taught by Mark Hill and usually offered in the Fall. Its weekly guest lectures are an Indy entrepreneur hall of fame. Don’t worry if you’re not a student. Founders learn it’s easier to ask for forgiveness than permission.

Earth House

Home to the 400 member strong Hackers and Founders Meetup, the Earth House is a proxy for Meetup.com which is where you can find every niche of Indianapolis’ startup community. Even Indianapolis Ruby Brigade and IndyPy agreed on Meetup for organizing their groups’ activities, but don’t expect the same when you ask them what language to build your coupon app in.

How wrong am I?

I think that’s all it would take to start a coworking space in Indy right now and I think time is a more important variable than quality of space or amenities.

Obviously the variable missing from this equation is people, but people don’t need funding. People are the funding. If you get the right people to frequent the space other people would follow.

Let’s call what I propose above the “minimum viable product” version of a coworking space in Indy. I know nothing about real estate but I have to assume there is an open space in Broad Ripple within walking distance of the avenue that’s been vacant for a depressingly long time. I also have to assume there are some desks, chairs, and maybe even a conference table just sitting around and some previously promising company that has gone out of business or since down-sized.

I haven’t tried to crunch the numbers so correct me if I’m woefully ignorant, but I think this could be established with very little funding, I’m going to even venture a guess and say less than $100,000, maybe much less. I think this is especially feasible if you can get a short term deal on a lease to prove that there is actually a market for this before you commit to an inescapable monthly rent payment which drastically increases your financial risk. (maybe people experienced in commercial real estate are laughing at me right now, but that’s why they’re not starting a coworking space).

If you think investors like “pre-order” signups and potential revenue, well, they absolutely love current customers and current revenue. I’d build something first and then try to raise a significant portion of the money.

I’m not trying to pick on Indy Coworking 3.0 aka Union Workplace. I don’t know anyone there (although I’d like to and I’d love to hear from them in the comments). I’m just musing on what’s the quickest way to get me and a lot of my friends out of the coffee shops we work in all the time, and into an office. I can’t remember when I first heard about them, but I think it was over a year ago and it seems (from the tweet above) they’ve been plagued by funding delays.

Who reading this would be willing to pay just to have a place to go whenever you wanted with desks, chairs, great internet connection, a room to make private phone calls, and most importantly, really smart ambitious people?

Forget all the style and amenities, who is interested in being an early adopter based on what I just described above?

I’m going to pose this question to everyone I see at Hubbard and Cravens this Friday. Maybe I’m wrong.

Indy needs a co-working space, a place that can be a hub of technology startups at their earliest stages, a place that host events like Hackers and Founders which at 110 RSVP’s to it’s latest meetup, keeps outgrowing the spaces it chooses.

Not only does Indy need it, but I think Indy would pay for it, and embrace it with so much buzz and word of mouth that anything other than grassroots, social media marketing a la @brewhouse style would be all the advertising it needed.

I remember at a board meeting at Powerset Peter Thiel asked us how the morale of the company was going.  Like all founders at board meetings, we said it was going great.

Peter said “let’s prove it.”

What we did is offer the following:

1. Anyone can voluntarily, permanently reduce their salary by one or more strata levels,
2. For each competency level forfeited you get XX,XXX more ESOP shares.

That’s from Steve Newcomb, the founder of Powerset, in a post that contains the most thorough, nearly step by step advice on implementing good hiring practices and culture at a company that I’ve encountered.

It’s long but worth the read.

For those who don’t know what Powerset is, Microsoft bought it for $100 million and it essentially became Bing. Steve Newcomb wasn’t the guy I met or insulted though. That co-founder of Powerset was Lorenzo Thione, and I insulted him as at a gay piano bar in New York called Marie’s Crisis.

After drunkenly begging the piano player to play “Gary, Indiana” (It was musicals night and that was the only musical song I knew any of the words too, plus, my friends and I were all from Indiana. No one in the bar was happy about this song choice.) my friend told me a guy he was talking to was from the Valley and that he’d started a company.

That’s all I knew. I had no idea who Lorenzo Thione was or what Powerset was. I can’t tell you exactly how that conversation went except that I didn’t hesitate to tell him that I thought starting a search engine was a dumb idea. I didn’t mince my words.

At that point in time, I was skeptical of anything that sounded like a “me too” idea to the point that I acted supercilious towards anyone not working on something innovative, and in my first 2 minutes of talking to Lorenzo, that’s how I assessed the situation. (Remember, I was drunk enough to request “Gary, Indiana,” and even that doesn’t begin to describe my state of inebriation. Also, I think there were a lot of new search engines in the news around that time like Cuil and WolframAlpha which really did disappoint)

I probably talked down to this guy for a good 10 or 15 minutes and he just heard me out. He never once took a shot back at me or even really acted annoyed.

He asked about me and I told him I had just started a company and was working on it full-time. He asked where I was from and I told him Indianapolis, and the only thing he had to say about me was “You’re trying to start a company? Then why are you in Indiana?”

Well, somehow I stumbled back to my friends apartment after that conversation. In the morning, I remembered just enough of Lorenzo and Powerset to do a Google search.

At this point, I still had no idea I was talking to anyone of any significance. For all I knew, I was just talking to another entrepreneur at the same stage as me in starting a business.

But then Google showed me that I was actually talking to a guy who had helped build one of the most powerful natural language search engines ever built.

Foot in mouth. Open palm to forehead.

Sometimes I think what a wasted opportunity that night was, but usually, after I cringe from nostalgic embarrassment, I just think how much that event cleared away a bunch of my unhealthy bravado. There was a lot more bravado clearing as I proceeded to start my first company, but never again was so much cleared in one swoop.

Failure isn’t as simple as we assume it to be when we’re all trying to avoid it. Failure has layers and it has degrees, as does success. I’ve learned a lot about failure in the past year and a half, but I received my degree in failure just a little over a week ago when I decided to leave Pocket Tales. As a graduate, I can tell you there is only one definitive thing to know about failure:

You only fail when you decide to stop trying. That is true 100% of the time.

I can’t think of a single other attribute of failure or failure’s existence that is always true. Whether failure is a net positive or negative depends on the circumstances. With Pocket Tales, we originally failed to build a successful business around converting children’s books into iPhone apps. The only reason that failed was because we DECIDED to stop trying to make it work. I think that was a positive failure because it allowed us to land on an idea that I think was much better and much more disruptive.

Someone once tried to tell me that the number one reason businesses fail is because they run out of cash. I’m not buying it. The number one reason businesses fail is because the entrepreneur decides to quit. He or she decides the expected outcome is not worth the price. It’s a decision to stop trying.

Maybe a VC or angel didn’t invest, but that doesn’t represent failure. If your goal was to raise money from that VC, then in order to avoid failure you would build another business and try to raise money from them again. If your goal was really to build a successful business, than not raising money from that VC/angel isn’t failure. There are always other ways to try to get cash or other ways to build your business without cash.

It may seem like I’m just playing with words. That I’m saying that one can avoid failure by redefining the goal, which is true, but it isn’t trivial. Your startup has not failed until you stopped trying to make it work. It’s an important thing to learn because it sets the right attitude for success. You are in control. Things don’t happen to you. You make things happen.

Don’t read my axiom on failure as a statement that you should never stop trying. That’s not my point at all. If I believed that, I wouldn’t have left Pocket Tales. I only want to point out that failure is a decision to be made. Own that decision.

Besides waxing philosophic on failure, the purpose of this post is to announce that I am no longer with Pocket Tales. I will save the “why I failed with Pocket Tales” post for another day. (If that sounds mysterious, it’s not meant to, ha)

It’s important to note that Pocket Tales itself has not failed and I still believe the vision has huge potential. My friend and co-founder Yaw Aning has decided to continue building the business. Pocket Tales continues to support its users and plan for the future. If you’re interested, you should go to www.pockettales.com right now and get in line for a beta invite. You may even get an invite to the alpha which is currently available.

I will continue to be involved from an advisor role, but my full-time efforts will be focused on a new opportunity. I don’t know what that is yet, but I’m planning to stay in the startup world with the goal of learning something new.

Vital Statistics

When: September 9th - 12th, 2010
Where: Bloomington, Indiana
What: “The Combine is a display of talent, entrepreneurship and innovation. It’s an event about tech, specifically the people, ideas and environments that drive technology.”
Featured Speakers: See below
Ticket price as of writing: $199 (buy yours) 

Lucky for you, the guys at SproutBox love the town of Bloomington, Indiana, and work hard and pull their connections to draw some of the internet’s top innovators closer to home.

For the first time, they’ve put together a technology conference in Indiana that startup founders are excited to go to. It’s called the Combine and is designed in the spirit of another “midwest” conference called Big Omaha. Since you’ve probably never heard of that either, just picture all the talent, creativity, and innovation of SXSW, but in a setting where you can spend some time getting to know interesting people, instead of spending all your time fighting the throngs of people.

Just check out the lineup of this year’s speakers. Did you ever think you’d find a group of people like this just an hour south of downtown Indianapolis? And I wouldn’t be surprised if they added more before the event.

The price might seem steep to all of you starving founders trying to make something happen, but I promise you there isn’t a better value this close to home.

Mark Hill of Collina Ventures presenting at Hackers and Founders - Indianapolis

I wrote a response to a post on Smaller Indiana by Doug Karr about the 21 Fund and their mission.

In particular, I was responding to this quote: “(Steve Hourigan) shared that the benefit of the fund really isn’t the money as much as it is the education that they could be providing companies with the right resources.”

My comment:

“I really enjoyed this post and your commentary on the 21 Fund, although it has left me confused about what the 21 Fund’s mission is - but I think that’s the point. Their mission isn’t what I thought it was or what most people think it is.

I’d be interested in hearing more about what “education” the 21 Fund is providing. I think the industry of educating entrepreneurs is already oversubscribed. I shudder to think how many productive hours have been wasted teaching a group of “entrepreneurs” the different ways to finance a startup. I say wasted because most people who consume this knowledge will never end up starting a business or are years away from using it.

Financing a startup is just one of those subjects that comes up a lot. There are plenty of others like which corporate entity to choose and how to hire your first employees.

This type of entrepreneur education feels good but it doesn’t move the needle. This type of generic education is a Google search away and the doers, the people who start businesses and create value from nothing, don’t usually get their entrepreneurship education from sitting in a classroom.

Most of the education someone needs when starting a business is very time sensitive and subject specific. For instance with Pocket Tales, my biggest issue today, June 9th, is redesigning our application UI. We also have a lingering issue of hiring a tech lead, and that is actually a place I think the 21 Fund could really help the state of Indiana.

How can we better match technical talent, whether it’s software “technical” or medical “technical,” with business talent to form stronger founding teams?

How can we imbue more people in Indiana with the attitude of “screw it, let’s do it,” instead of training them to sit in classrooms consuming knowledge, further delaying the act of creating until they know all the answers?

As you and I both know Doug, you never know all the answers. You only hope you can find the right answer when you need it, and you don’t have the time or the resources to think much beyond today’s bottleneck.

Just my two cents about most of the entrepreneur education I see.”

The best thing about starting a company in Indianapolis is you can avoid the “startup” hype. Indianapolis in general (not the tech community, but the general community) doesn’t care about startups. The only way they’ll pay attention to you is if you’re successful.

This is a good thing.

Even the most good intentioned founders can get caught up in the hype.

• The hype is what makes you seek unnecessary press, twitter followers, facebook fans, and other vanity metrics. 
• The hype is what makes you worry about how much money you’re raising, who you’re investors are, and who your partners are regardless of how it’s helping you serve your customer. 
• The hype is what makes you feel like you’ve accomplished more than you have or less than you have. 
• In general, the hype distorts the reality, which is lethal

If you phrase that another way, you also get the worst thing about starting a company in Indianapolis - it’s harder for legitimate startups to attract any hype. 

• The hype helps you get press, twitter followers, and facebook fans which help market your product
• The hype helps you raise money, attract strategic investors, and strategic partners to better serve your customers
• The hype can make you feel like you’ve accomplished more than you have which is good for morale, or less than you have, which pushes you to achieve more
• In general, the hype distorts the reality, which if channeled correctly, can be helpful

As they say, “all things in moderation.”