It's a perilous world out there for founders and startups. Some 90% of new businesses end up failing, with nearly a quarter of those failures taking place within the business's first year of operations.
Simply put, the market is crowded and not all great ideas get the attention they should. Even the most promising concepts can get drowned out by unfavorable economic conditions, harsh competition, and intransigent investors. A little bit of help in the early stages can make a world of difference for startups trying to get off the ground - that's where Devland comes in.
Devland is a Houston, Texas-based startup studio that helps entrepreneurs-in-residence take their future businesses from the idea stage into reality. Founded by disruptors Miles Dotson and Devon Fanfair, Devland seeks especially to nurture entrepreneurs who come from backgrounds not historically favored by investors: women, people of color, and those living outside big investment hubs.
These factors make Devland particularly poised to produce one of the startup world's next big disruptors. Here's how they're going about doing just that:
The Devland Process
So how exactly is a small startup studio nurturing some of the most exciting new companies today? Through their own specialized startup research process. Devland's partners find entrepreneurs to back from a number of different sources such as networking events, startup conferences, open pitch events, and digital content engagement. The core of Devland's application is the three ideas entrepreneurs must submit alongside it. These ideas give Devland a sense of the entrepreneur's interests as well as their abilities as operators to help realize them.
The entrepreneurs selected by Devland are given an initial budget of $50K to research their idea and $150K in investment into the spinout of their idea if it generates traction through an enterprise pilot. They may not have their final product ready to go in that timeframe, but their business model and proof of concept will be more than substantial enough to move forward in an enterprise pilot or even to court acquisition offers. The point of this format is iteration and repeatability: even if the idea being developed isn't destined to be the next big thing, the entrepreneur will leave Devland with all the tools they need to push forward with whatever is next for them.
Because Devland takes on startup ideas from before they're even deployed, they have unique visibility and bandwidth to determine if entrepreneur's conducting research will materialize outcomes especially when targeting ambitious or experimental ideas. "Traditional venture firms are not typically found with this purpose. Experimentation happens within academic institutions or smaller think tanks exposing discoveries about customers or the market as a whole assisting investors in backing new opportunities or in optimizing companies already in their portfolios." says Miles Dotson. By partnering with Devland these firms are able to acquire important insights about inbound investment deal flow and gain assistance in de-risking companies from failure as they grow. This ensures that the early-stage entrepreneurs they're giving a platform to are the ones most likely to innovate, disrupt, and shift the landscape of entire industries. The impacts of this may not be immediately apparent, but in the long run Devland's startups and leaders are going to be the ones that shape the future.
As Black entrepreneurs, Dotson and Fanfair know firsthand just how difficult it can be to get ideas off the ground as members of a marginalized group in the startup space - of companies that raised at least $500,000 in the third quarter of 2020, just 2% had Black founders. Compare this with the fact that 85% of Devland's applicants are people of color and 65% are women, and you'll quickly realize that Devland is hoping to transform the startup world in more ways than one.
Of course, all of these would just be empty words if Devland's startups didn't have the success to back them up. Though Devland's process may sound heavy on concept and light on execution, the startups they're nurturing would beg to differ.
One of these early stage success stories is Rain Research, a frontier hardware program that has produced its first spinout dedicated to fighting wildfires leveraging autonomous drones after a successful SEED financing. The past couple of years have shown just how damaging improperly mitigated wildfires can be to communities, ecosystems, and infrastructure. With losses totalling in the hundreds of billions year after year, new solutions are needed. Rain Research is investigating ways that cutting edge technology such as drones, robotics, autonomous vehicles, and other devices can help protect property and diminish losses without putting human lives at risk.
Devland isn't just a studio for undeveloped ideas, though - Dotson and Fanfair are launching a fund to invest in proven projects they believe could go even further. While some ideas need attention from the moment of their conception, others are best proven through practice before investments start to flow in. Devon Fanfair says "Building companies that demonstrate enterprise value is the best path for new builders because they generate revenue with very little investment. It allows for operators to focus on solving quantifiable problems and building momentum that is fed with every new iteration. Some startup builders get lost solving consumer pains that are harder to validate without scale. This can prove to be adversarial to growing confidence and routine behaviors that breed traction." In short, Devland believes grooming advanced operator skills can breed traction regardless of the industry focus and through overcoming the bias present in ventures where the entrepreneur is headset on solving pains in their own personal experience.
Even among those 10% of startups that succeed, how many lose their original vision in the pursuit of growth? Devland works to ensure that whatever growth their startups do see takes place sustainably and always in the pursuit of innovation and disruption - that's how the businesses of tomorrow are made.