Innovate Arkansas Accelerating Startup Success in State


Innovate Arkansas Accelerating Startup Success in State
Josh Moody and Michael Paladino of Overwatch show off their app during Demo Day for the 2013 ARK Challenge. (Beth Hall)

Before 2012, Arkansas startup founders looking to join an accelerator program to fast-track their ventures had to look out of state.

The ARK Challenge gave them a reason to stay home. The state’s first startup accelerator, the ARK was funded into life in 2012 when Innovate Arkansas submitted an application to the $37 million Jobs & Innovation Accelerator Challenge, an effort by the U.S. Department of Commerce to spur job creation within targeted regional industry clusters.

That application was one of 20 selected out of more than 150 submitted from across the country, and the ARK Challenge was up and running for two initial installments in Fayetteville.

A 14-week, entrepreneurial boot camp administered by Innovate Arkansas, the ARK brought in startups from Arkansas but also multiple states and even countries. Since its first run in northwest Arkansas in the late summer of 2012 and fall of 2013, the ARK has completed three more successful installments. The federal program funded the first two, and private and state investment funded two more runs in 2014, the latest held last fall in Little Rock.

(A promotional video from RetroCat Media tells the story of the ARK program.)

The ARK drew mentors from across the Arkansas business community but also national startup founders and experts as well. Ash Mauya of Austin, Texas, author of “Running Lean” and creator of the Lean Canvas model, was a mentor for two of the ARK’s northwest Arkansas installments. He believes the ARK program helped give the state’s tech startup ecosystem the nudge it needed.

“Building customer acquisition channels is one of the hardest things for startups to do,” he said. “By combining a mentor-driven accelerator with access to retail/logistics customers in northwest Arkansas, the ARK Challenge created a win-win environment for both startups and the business ecosystem.”

Over the ARK’s three-year run, it accelerated 36 startups and distributed roughly $1.9 million in prizes, resources and seed money. And it attracted startups from across the planet. While 24 ARK startups were from Arkansas, with the vast majority still in operation, the program attracted teams from both coasts and as far away as Buenos Aires, Singapore and India.

It attracted young entrepreneurs — one founder was still in high school while he competed in the ARK’s second installment in 2013 — and seasoned founders.

Josh Moody was a senior at Little Rock’s Catholic High School when he guided combat-gaming app Overwatch to a win and a $150,000 funding round at the ARK’s fall 2013 run. Moody said the ARK was the perfect launch for his idea, which essentially transforms “Call of Duty” into real-life gaming. For Moody, the ARK was less startup competition and more startup cooperative.

“Everyone at the ARK was not only supportive of me, but of every one of the ARK teams as well,” he said. “The way the program was structured encouraged teamwork and networking, even across different teams. If one team was in need of a resource or connection that another team had, they would work together for the better of both teams.”

The Overwatch app is available on iTunes and a deal with airsoft gun manufacturer CyberGun is in the works that will place Overwatch on retail shelves at stores like Walmart and Academy Sports.

The ARK also attracted female founders to installments in both Fayetteville and Little Rock. One northwest Arkansas team, HIPAA Risk Management (HRM), is made up of four women who developed proprietary software providing risk analysis and security and privacy training related to HIPAA issues.

“Innovate Arkansas truly has a pulse on the startup climate in Arkansas, and the ARK Challenge was an invaluable resource for our startup company,” said HRM’s Anna Drachenberg. “It provided us with a lot of guidance, including key introductions, constructive feedback on our investment package, resources for market research and help identifying programs and options that are available to us.”

The ARK Challenge will continue this fall in Fayetteville, administered by Startup Junkie Consulting, and a planned accelerator program, run by the Arkansas Regional Innovation Hub, will pick up where the ARK left off in central Arkansas, perhaps in early 2016.

Jeannette Balleza-Collins directed the first three ARK cohorts in Fayetteville and will lead the accelerator as it relaunches in Fayetteville this fall. She said industry mentors donated hundreds of hours to accelerate 11 startup companies over the course of the two 2014 installments. Nearly half of them received additional investments, ranging from $50,000 to $450,000.

“We continue to work with alumni founders, whether they live in Bangalore, the Bay area or New York; not only do their ties to Arkansas remain strong, but also they are helping form bridges linking our respective entrepreneurial networks, regardless of geography,” Balleza-Collins said. “Continuing the accelerator in northwest Arkansas is an integral factor in continuing the momentum of our venture ecosystem, as the program serves as a galvanizing force, banding together corporate flagships, business influencers and the idea community at large to guide startups towards more traction, whether with customers, partners, media or investors.”

Innovation Hub Director Warwick Sabin believes central Arkansas needs to continue to host an accelerator program for the same reasons, not the least of which is the momentum the ARK’s presence in Little Rock helped create.

“The ARK Challenge in central Arkansas was a groundbreaking event for the entire ecosystem in this region because it raised awareness of the resources and talent available here,” he said. “It paved the way for many other important developments that have happened since then.”

The ARK’s expansion to central Arkansas certainly bolstered the tech startup momentum that had been growing in greater Little Rock, raising the region’s profile and serving notice of Arkansas as a bona fide tech startup launchpad.

“The ARK has underscored the importance of having an accelerator program in central Arkansas and created momentum to build on the progress we’ve made,” Sabin said. “The Hub has made great strides toward creating a new accelerator that we hope to announce in the coming months.”

Jordan Carlisle, director of entrepreneurship for the Little Rock Regional Chamber of Commerce, believes the “innovative inertia” produced by having a local accelerator will lead to a stronger community of entrepreneurs. For Sabin, it’s important to launch another accelerator program while the local tech startup ecosystem remains in growth mode.

“I think the timing for another accelerator program is right for central Arkansas, as our community leaders in business, education and government appreciate the need to be pro-active and collaborative in continuing to build the entrepreneurial ecosystem,” he said.

Spencer Jones has been a big part of that build. Through his Little Rock startup, Jones Innovative Medical Solutions, he won the central Arkansas installment of the ARK last fall along with the funding round of $150,000 that went with the win. While a surgical nurse resident at CHI St. Vincent in Little Rock, Jones developed an innovative way to take multiple blood draws from hospital patients, and that innovation drew the interest of local med-tech investor David DePoyster, who partnered with Jones.

Jones said applying for the ARK Challenge was the most important thing he ever did for his startup.

“The ARK Challenge program is the single most impactful thing that has happened to my business since its creation,” he said. “As a young entrepreneur, the experience gave me access to expert mentors and startup capital, but it didn’t stop there. It plugged me into the thriving entrepreneurial ecosystem that Little Rock has cultivated over the past decade, and provided my early stage business the type of validation that can’t be bought.

“Even now, I continue to work with the organizations that made the ARK Challenge possible and am experiencing the priceless benefits they provide with their multitude of services.”


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