Starting a business is like pitching a film to a big Hollywood movie studio.
That’s according to Nick Tietz , the founder of ILT Academy and ILT Studios, a St. Cloud-based education provider and co-working lab for small-business owners. When it comes to nurturing a business idea, accelerator programs, lenders and investors tend to rally around the 1% of new companies that have the potential to become blockbusters, he said.
“Not all movies are hits,” he said.
In Minnesota and other parts of the U.S., though, there’s a dearth of environments for “the other 99%,” Tietz said.
“Could we create a thousand $100,000 businesses every year?” he said.
Tietz sought a way to teach people how to be successful entrepreneurs and avoid mistakes he made in his startup experiences. He launched and raised capital for six previous companies: an advertising and marketing agency; a motion graphics design business that merged into a new company focused on digital interactive design; an app that serves as a mobile profile for people with disabilities to improve interactions between first responders and educators; a home management platform for active military members; and a fitness coach app. All but one eventually shuttered.
In November 2020, he launched ILT Academy, which operates free, 10-week programs to help entrepreneurs — mostly in Greater Minnesota — validate their products and understand their market fit through customer discovery.
In three years, he has taught more than 500 small business owners.
Tietz — whose academy the North Dakota Department of Commerce recently selected to be the state’s official provider of educational material for socially and economically disadvantaged entrepreneurs and small-business owners — shared his perspective on how entrepreneurs should really think, and why the failure rate is so high for new business owners.
Q: According to the Bureau of Labor Statistics, only half of businesses survive past five years. What can be done to bring the success rate up?
A: I think as the business gets less risky, the failure rate goes significantly down. The failure rate on a coffee shop is way lower than a high-growth, high-tech startup because the uncertainty in the customer segments and the marketplace is so different. A small business typically has a known customer with a known problem, a known solution and a known context. Those are a little bit easier of a problem to solve and troubleshoot. The failure rate goes up when you start getting into things that are completely new. There’s a skill set in finding a customer and then finding a market.
Q: What are some of the lessons you’ve learned in standing up different small businesses?
Originally posted by Nick Williams of Star Tribune, November 8, 2023