Guess Who Just Started the Next Great Company?


By: Doug Doan, founder of ACA member Hivers and Strivers, an angel investment group that invests exclusively in companies started by military veterans. ACA is supporting the celebration of National Veterans Small Business Week with a Veterans Syndication Event on November 12 in Boston.

An important fact about American veterans is also the least reported and understood.  Our Army, Navy, Air Force and Coast Guard veterans are turning into superb entrepreneurs and are unusually successful starting and running new business enterprises.  Surprised?  You shouldn’t be. Many military vets use the very skills, leadership, and drive learned the hard way from service in wartime to build and run great companies.  Let’s call it Post Traumatic Growth or PTG. 

Companies such as Ridescout, founded by two West Point grads and combat leaders, brought the drive, determination, and fierce execution skill skills learned in the Army. They have been so successful in opening up a new market, their company was recently gobbled up by Daimler Benz, with a nice return for the angels involved.

Former Coast Guardsman Scott Borgerson turned his military experience into CargoMetrics, a quantitative investment company that has developed proprietary systems for monitoring global trade.  Five years ago, he sketched out his idea on the back of an envelope, now he employs a number of “big data” software engineers, data scientists, and trading professionals.  

Lettrs, a company launched by West Point grad and Gulf War vet, Drew Bartkiewicz, is an interesting long form mobile messaging network to reinvent the personal letters for the next generation.  Using personal signatures, themes, and sophisticated API technologies, lettrs provides the counter communication option against the disposable messaging options that flooded the market .Drew’s company is growing at a ferocious rate, up 700 percent in the last 90 days and now translates personal letters across 174 countries in 80 languages.  

Jeremy Gocke, another ex-Army officer, has recently launched a company called Fliptu that is bringing new technology and innovative thinking to large scale events.  One of his first customers was the band KISS, perhaps not the typical business partner of a West Point grad, but then again, our veterans excel at breaking molds and pushing innovative ideas. 

Gulf War vet, Mark Stabile founded an innovative healthcare company called Team of Care, that brings new savings and efficiencies to hospitals and Accountable Care Organizations.  He is already deployed his innovative solution at a hospital and expects to add several more soon.  In an era of vast changes in how healthcare is managed in the US, Mark has developed the exact product and solution at the exact right time.  

These vets, and hundreds more like them, are launching some of the most innovative and successful companies in the nation.  Just how good are these military vets?  According to a study published by the Kauffman Foundation, more than half of angel-backed companies fail and an overall 27 percent return came from about eight percent of the investments (which had cash returns of 10X or more). In comparison, had you invested in the companies founded by these veterans, you would have earned an average return of over 400 percent. 

Why are military veterans such good entrepreneurs? I think there are several reasons.

First, many vets joined the military in a post 9/11 world knowing full well that there was a likelihood that they would be deployed in harm’s way.  They sought to play an active role in resolving the biggest challenges and most dangerous tasks of their generation.  An act of courage, certainly, but even more, this is a group of people that were driven, unafraid, and determined to directly confront the biggest challenges of the era.  They elected to shoulder the responsibilities themselves rather than watch or comment from a safe distance.  These vets are the true doers of this generation.

Second, today’s soldiers, sailors, marines and coast guardsmen are smarter, better trained, equipped, and prepared than at any time in the nation’s history.  In particular, our military academies at West Point, Annapolis, Air Force, and the Coast Guard produce amazingly smart and capable young men and women.  Our military academies are consistently rated in the top ten colleges in the nation. (The US Military Academies also consistently score at the bottom of the “Best Party Schools” which tells you the young men and women attending are working hard).  Not long ago, Forbes rated West Point as the number one school in the country and described at length why West Point beats Harvard.  Competition to get accepted is fierce and many entering the military academies describe their safety school as Yale or Princeton. Put another way, I am quite convinced that some of the most outstanding and highly motivated young men and women in America today are attending one of the US military academies or soon will.

Third, boy do these folks understand leadership!  Every entrepreneur is challenged with a host of unforeseen problems as well as potential opportunities.  The good entrepreneurs will rise to the occasion and solve problems; the great ones will anticipate troubles and avoid them, but magnificent entrepreneurs will turn problems into opportunities and seize the initiative.  Most vets are proving to be magnificent entrepreneurs and have experience with turning potential tragedy into victory.

In truth, military experience in America has always helped shape the founding and running of great companies.  Young Army private Walt Disney first sketched cartoons on an Army ambulance, long before he launched one of the great companies in America.  Marine Corps officer Fred Smith turned his experience in combat air logistics into a company called FEDEX, now one of the most admired companies in the nation.  The current crop of Iraq and Afghan veterans is poised to build similarly successful companies. 

It’s a pity that too few Americans understand just how terrific some of our young military veterans are doing at job creation.  Strangely, business gurus, startup incubators, and leading business schools do not yet seem to consider our military veterans as potential entrepreneurs.  Not long ago, a professor of entrepreneurship at MIT noted that to be successful, the school needed to teach future business leaders “the execution skills of a Navy SEAL.”  If the good professor intends to teach Navy SEAL leadership skills to the MIT student body, I wish him the best of luck. That will not be an easy task.  He would have a much easier time if he started with a Navy SEAL and then taught that young Vet the business concepts needed to run a company. 

Investors all across the country are looking for the next big thing, the next founder of an Apple, Google, Facebook or Tesla.  They all seek to find some young entrepreneur that is going to be a superstar.  Over the past few years, I have discovered that the task is not so hard as one might imagine; the next great superstar is probably a young man or woman with a Bronze or Silver Star.

Comments

Doug's comments are right on the mark. See my op-ed that was recently published in Forbes: http://www.forbes.com/sites/realspin/2014/09/29/memo-to-employers-veterans-arent-ptsd-basketcases-theyre-disciplined-and-committed/ Paul A. Dillon Former 1st Lieutenant, Transportation Corps U.S. Army Reserve (1969-71) Vietnam Warrior paul@dillonconsult.com
Paul Dillon  4 years ago 

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