Presented by Cultivation Capital
Cliff Holekamp: Startup Founder, Educator, Connector, Evangelist
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As co-founder and general partner at Cultivation Capital, director of the Entrepreneurship Platform at Olin Business School and senior lecturer in and academic director for Entrepreneurship at Washington University, Cliff Holekamp has a mission: ensure that by every metric, St. Louis is on the shortlist of technology entrepreneurship hubs.
A thriving ecosystem for entrepreneurship requires talent, capital and density, he says: “Everything I do develops one of those three things.” And he does a lot: he’s also a board member for numerous startups and an entrepreneurship community activist (on the Friends of T-REX Board and the Danforth Leadership Council of the Donald Danforth Plant Science Center).
EQ sat down with Cliff to get his backstory and thoughts on what St. Louis has going for it now.
Why did you become an entrepreneur?
Because I didn’t like working for other people. It wasn’t comfortable for me to be in a position where other people were controlling my future.
When I was in Sales at IBM, one of the best companies in the world, I had a great experience, but I learned that there’s so much more to moving up in a company than performance. Understanding the internal politics and how to ride coattails are important skills for succeeding in the corporate environment, and I was pretty good at playing those games, but I didn’t find it satisfying.
That wasn’t necessarily what I valued. I wanted to be in a position where I could determine and set my own destiny, for better or worse.
Why WashU for business school?
I came to WashU in order to transition my career from corporate to entrepreneurial. I looked at a lot of schools, and the main reason I chose WashU was that they allowed me the flexibility to pursue my own curriculum.
Back then (Holekamp received his MBA from Olin in 2001) we didn’t have as robust an entrepreneurial program as now, but we had a very flexible program, so it wasn’t forcing me into paths of finance or accounting or marketing. I was able to really craft something that met my needs to be a business founder.
What happened after business school?
I started a company called Foot Healers. It’s a chain of podiatric medical centers here in St. Louis—a Lenscrafters approach to podiatry. It’s a one-stop shop, where at a retail location, you can go and find a doctor’s office and foot care specialist in one place.
It’s less intimidating than going to a traditional medical office and tries to bring down the barriers that keep people from seeking the healthcare they need. My stepfather was a podiatrist, and I started talking to him, and he helped me recognize how quirky that industry was.
He was very focused on the medical aspect, but there was just very little innovation on the business side. I did research on this market, and found that the biggest competitor of podiatrists is actually people that don’t seek medical treatment and prefer to live in pain.
They will actually procrastinate indefinitely going to the doctor because the experience of going to the doctor is less appealing than getting it fixed. So I thought, how can I change the model so the process of going to the doctor isn’t so negatively viewed? It worked.
What led to your academic role at WashU?
When I sold Foot Healers in 2007, some of the first people I told were my former business school professors like Bart Hamilton. I figured that I’d be starting another new business before long and asked him to let me know of any good opportunities.
He said he wasn’t sure about that, but that they could use my help on campus. Hamilton had known me because I spoke in his class every semester, and he knew that my lectures really went well, and he thought maybe they could trust me with a whole class.
So I came in just as an adjunct for the first semester, teaching the Introduction to Entrepreneurship class, and it went really well, and they asked me to come on full time in 2008.
Tell me about the experiential entrepreneurship course you teach at WashU called The Hatchery.
I was a student in The Hatchery. It’s a one semester class that is focused on teaching students the skills required to research, model and pitch business ideas. Our benchmarks really are educational, but that being the case, we have surprisingly strong real-world outcomes.
I think that is because we are focused on the educational objectives rather than just trying to measure how many companies we can spit out or how many participants we can push through the funnel. It’s really focused on providing a quality educational experience.
It’s not a requirement to launch a business as part of the class; about half of the companies do, and half determine very wisely that maybe it’s not their best opportunity, and that’s a successful outcome.
This is why it’s a dangerous thing when you use launch statistics as the benchmark for a course. Because then academically, or at least programmatically, you’re encouraging everyone to launch, because that makes you look better; so that’s not what it’s all about.
So often the right decision is to go on to the next idea.
Talk a little about the importance of talent and capital.
Talent is actually the most important. Even though I co-founded Cultivation Capital, recognized as the most active venture capital firm in the Midwest, people are actually more important than money because we can’t throw our money at nothing.
So, people are number one, and that’s why my work at WashU is so important for the St. Louis community. You have to educate people to be great entrepreneurs or to be great team members of early-stage ventures.
We’re lucky to have a diversified educational system at WashU with multiple schools that teach different skills because we need them all. So I’m doing my role on the business side and collaborating with the other schools to help develop the talent that we as a community need and we as a country need to be competitive to build the next generation of economic development.
You need to fuel these people with money, which is why we started Cultivation Capital. We realized that we as a community needed to provide more opportunity and that in order to keep the talent here, we need to keep them funded and fueled here.
We have over $100 million under management right now, starting from zero in 2012. We did 52 transactions last year. That’s a lot of deals.
We started with a small early-stage tech fund, we added a life sciences fund, started Tech Fund 2 last year, started two accelerators, one for FinTech (SixThirty), one for AgTech companies (Yield Lab).
We’ve also been very active in supporting and helping Prosper Women Entrepreneurs and Stadia Ventures to fund their accelerators and we actually help run their back offices. For years we performed the due-diligence for Arch Angels.
We do everything we can do to build capital opportunities in St. Louis.
Why St. Louis?
St. Louis is a great place because of the community here: density is the magic ingredient.
This is what most people miss and don’t understand. Talent and money need to be in a dense proximity to each other because when you have a group of people who are in close proximity, they form a community.
When you create a community, it creates a culture. When you have a culture, it attracts other people and your community grows.
There are some really great cities that do well in talent and capital but don’t have good density. In LA and Chicago their ecosystems are very spread out geographically, so it never really coalesces into a community and doesn’t develop that culture.
Density is something that Silicon Valley did very well with on day one and it’s grown over the years, but also has maintained that density. You just walk down the street there and you hear people talking about startups and you see people that you work with at Starbuck’s and at the store.
So everything I’ve been doing has been focused on talent, capital or density. That’s why I was the faculty adviser that created the marketing plan to bring the Cambridge Innovation Center to St. Louis.
I’m on the board of T-REX, and [I’m] working with the St. Louis Zoo on some of their entrepreneurial initiatives. I’m involved in the Danforth Center because they are creating a community around Plant Science which is a distinctly different culture than the tech community.
There’s a different community, different social norms and they need different networks. That’s why what they’re doing is so important because they’re building a community around that.
The fact is, that as an economy, we have to be building our next big companies. Express Scripts and Centene were startups 30 years ago. If we don’t grow the next big companies, we’re going to be an economy in decline. If we do, we’re going to be a successful region.
How do you juggle all of your responsibilities?
The key is to have your professional interests aligned. It sounds like I’m doing a lot of things at once, but you don’t realize how overlapping they are.
The work that I’m doing with Cultivation Capital I’m doing with my students. That’s part of the work I’m doing with the university.
And the work I’m doing with T-REX is in support of Cultivation Capital and our portfolio companies. Serving on boards, those are boards I’m invested in.
And so, really, those same companies end up becoming projects for students who are in my experiential learning classes. They’re very interconnected.
Everything I do is around startups and entrepreneurship. So really, all of my activities are enhancing each other. My work at WashU benefits my work in the community, my community work benefits WashU, even though it sounds like layers of things.
It’s very natural for me to do these things: to start and help grow things.
As you get more senior, you spend more time helping other people grow things, and that is just as rewarding, if not more so, than doing it yourself. It puts you in a position where you have more credibility to help others and then you can really multiply your impact.
What do you do for fun?
Email is going all day; I don’t really separate work and home hours. I spend a lot of time with my kids.
My daughter was down at T-REX selling cookies for the Girl Scouts. We spend a lot of family time in the country near Defiance, MO.