In 1994, Hush Puppy shoes were on their deathbed. They had sold a weak 30,000 pairs of shoes the previous year, and the parent company was about to kill the brand. Two years later they sold approximately 1.7 million pairs. Malcolm Gladwell, after recounting this story in his book The Tipping Point, then asked, "How does a thirty-dollar pair of shoes go from a handful of downtown Manhattan hipsters and designers to every mall in America in the space of two years?" The answer? Preferences of a few quickly escalated to the appeal of many and tipped the scales to success. Without the initial interest of a handful of trend setters, Hush Puppies would likely have disappeared.
Every entrepreneur faces the harsh economics of tipping points. In 2007, my Zinch co-founders and I had burned through most of our $750K angel investment. We needed to grow enough of a critical mass to survive. We needed a tipping point, but fighting on our own we would never get there. When we laid off most of our team--paying the remaining members in equity alone--it was local entrepreneurs who came to our rescue. They saw our potential and stepped in with capital and coaching. Their involvement tipped the scales, and the business was ultimately acquired and taken public.
I remember like it was yesterday--sitting in a Santa Clara hotel shortly after our company had been acquired, staring at a celebratory bottle of wine left for me (and that I couldn't drink), remembering one of those who had lifted me up along the way. I gave him a call to share the news, swap some stories, and compare notes on startup. That friend, Jeff, is now my partner at Peak Ventures.
The tech scene has radically grown since my days at Zinch, and Silicon Slopes has become a major player. Utah's tipping point in tech is homegrown, catalyzed by founder-led support for other founders, and it spans from budding entrepreneurs to the most prominent figures in the Salt Lake Valley. So where can you find the love for your startup, as you reach for a tipping point?
* Through an...