Eliminating Barriers to Entrepreneurship

Erika Lucas, co-founder of StitchCrew in Oklahoma City, was invited to attend Fortune’s Most Powerful Women Next Gen Summit in December 2019. Women attendees from across the globe shared big ideas for how to fix problems throughout corporate America. 

Erika shared her insights and ask of these women leaders:

• She pointed out that 78% of venture capital is spent in three states which are in the coastal areas.
• We are so polarized in this country which has to do with people in the middle of the country feel left out of the conversation, particularly as a lot of our traditional industries are dying out because of technology.
• Erika strongly believes the problem is only going to get worse as automation and artificial intelligence continue to take over some of these industries.
• She encouraged venture capitalists to contact her to connect with entrepreneurs; stating there is quality deal flow in the middle of the country.
• Erika also mentioned that less than 1% of startups ever access venture capital and that’s because not everybody is building high growth companies. 
• We also need to come up with funding mechanisms that invest in women and in people of color entrepreneurs that are not necessarily creating tech or high growth ventures. 

Back in Oklahoma, I spoke with Erika about the great impact of StitchCrew's work with entrepreneurs.

At StitchCrew we believe the fastest way to achieve economic mobility is through entrepreneurship. We focus on eliminating the barriers – access to capital and social networks – to entry for women and people of color entrepreneurs in the middle of the country. It’s been almost two years since StitchCrew kicked off the Accelerator program. We are now accepting applications for Spring Batch 2020 which is Batch V for us. 

Our team has been building and learning with every batch – 39 companies and 4 batches to date. It’s been really neat! We are not industry sector focused – we look for companies that have potential to be high growth or that can scale significantly. Based on where Oklahoma is, we need to focus on creating more density rather than being niche. Companies are doing very good in the grand scheme of things.

How do you measure success?

Here’s things we track to measure success of the founders/companies and the impact of StitchCrew’s program.   

• Percentage of companies in business after their first year. Given that 50% of company startups in the U.S. don’t make it past the first year, this is an important factor we measure. After our first year we’ve seen a 95% success rate with companies alive one year after graduation.
• Level of funding raised for companies going through the program. To date, we have raised more than $8 million which is good since a lot of companies are not trying to fund raise. 
• Savings to companies. We measure how much money the companies saved by going through the Accelerator program and accessing the resources available through StitchCrew and its partners. This has averaged $30,000 to $40,000.
• Diversity. We are intentional about the diversity of companies we work with, i.e., we go after founders who are women, people of color, veterans, and rural based founders. Our target is entrepreneurs that wouldn’t typically have ample access to capital. We have reached a 60% inclusion rate so far.
• Revenue. Another measure is reaching reoccurring revenue. For the founders, this is more tangible than measuring the impact of technology.

Being two years in, what are some takeaways you’d like to share?   

We are always learning and adapting. The StitchCrew team has learned many lessons from how to better serve entrepreneurs to how to build a more cohesive partnership with the larger community.

One thing that is different from when we started is the amount of work done virtually and remotely with the companies. Most of the content is now distributed online to best serve the founders who are very busy and located throughout Oklahoma and outside the state. The companies submit weekly metrics remotely. We do meet with the founders in person once a week, but do it after hours to not interfere with their business operations. Also, we do two in-person sessions where StitchCrew-affiliated business mentors meet with founders.      

Takeaways for me personally, were learning how to manage your time running an accelerator, i.e., maintain relationships with mentors, investors, community leaders while supporting the founders. You have to manage and strengthen relationships with limited staff and limited time. It’s important to stay focused and do things that really move the needle for the entrepreneurs.

What are the latest trends in entrepreneurial ventures?

It depends on who you ask, you’ll hear artificial intelligence, among others, but it’s really hard because it depends on the industry. One area that I am personally focused on is “the future of work”. How are we going to manage or have a different type of workforce in the future? We are moving more and more into the gig economy where people want to work remotely and have flexible work schedules. What tools are there for employees and employers to streamline communication? There are opportunities for independent contractors in the future. I am seeing cool startups coming out to serve those needs and help bridge gaps in what the workforce is going to look like in the near future.

Also, there are more and more organizations focusing on entrepreneurship on a national and local level. More venture capitalist funds are starting. Seeing more niche organizations trying to get into the space and decide how to fill the gaps, i.e., supporting women and entrepreneurs. More government and economic development organizations trying to do entrepreneurship. 

What would you recommend to communities/organizations to help build those entrepreneurship opportunities?

Obviously, the best thing to do is to collaborate. We talk about being “collaborative”, but we don’t really do it. How do you break down collaboration? First, build an inventory of resources that already exist in nonprofit organizations and your community so you know that you’ll be additive and not duplicate. Sit down and put forth what everyone is working on, what is missing, and focus on filling that gap. Then you’ll get the support of your colleagues and avoid duplication when going to funders. When it comes to government or economic development programs, it’s important to recognize that early stage startups are not going to show the job creation or job growth metrics that is typically expected by an economic development organization or legislative body. As a result, oftentimes, these entities treat entrepreneurship programs as second best. I’m not suggesting that we eliminate the focus on expansion/recruitment; however, we need to adjust our metrics and make entrepreneurship a higher priority. We should be intentional in getting entrepreneurs connected with effective resources and in front of investors. 

I first experienced Erika’s entrepreneurial spirit and passion for change during our work together at the Oklahoma Department of Commerce. She is awesome and so inspiring! Interested in learning more about StitchCrew and eliminating barriers to entrepreneurship, contact Erica Lucas.