Jeff on work of Innovate Mississippi
Tony Jeff is president and CEO of Innovate Mississippi. Jeff is a graduate of Mississippi State University and Northwestern University. He joined Innovate Mississippi in 2002, and took over as the company’s chief in 2010. He recently spoke to Sun Senior Staff Writer Anthony Warren about the organization and its efforts to help entrepreneurs. He and his wife Sheila have two children.
What is Innovate Mississippi?
“People think of us now as the Mississippi ‘Shark Tank, but we work with companies from the idea stage … to help them develop their plans and connect with the resources they need to execute on those plans. Those resources eventually include money. We work with 100 plus companies a year, and 10 of those (will have ideas that will be) introduced to investors.”
So is Innovate Mississippi an incubator program?
We are a virtual incubator or accelerator, but not landlords. We used to run a 30,000-square-foot incubator we handed over to JSU many years ago. There are lots of good landlords out there, we thought it was something we didn’t need to do.
What are some success stories that have come out of Innovate Mississippi?
“Early on, SmartSynch, a Jackson company, was acquired by ITron, a publicly traded company, for $100 million in 2012. Bomgar (was) acquired in 2014 for an undisclosed amount”.
What are some of the ideas people come to you with? Are most of them smart phone apps?
“We only deal with technology and innovation start-ups. Innovation can include medical, and almost anything that is novel and protectable. In the last eight years or so, app-based businesses are the dominant group, but not the only ones.”
What criteria must entrepreneurs meet to be helped by Innovate?
“Really, we love to engage (entrepreneurs) as early as possible, even at the idea stage. It’s got to be the kind of business that can grow to be huge. The ideal would be some technology that would be difficult or impossible to copy that would give that entrepreneur an unfair advantage in the marketplace.”
Do companies have to be from Mississippi?
“We only work with companies in Mississippi, or that will commit to (move) to Mississippi.”
How long does it take for an entrepreneur to go from the idea stage to the point where their ideas are being pitched to investors?
It varies widely. I would say typical companies are pitching their ideas to investors six to nine months after we first engage with them. They have to have the prototype and have it market-tested before we take it to investors.
What do you mean have it market-tested?
“They need to put it in the hands of a potential customer something that looks like what their product will be, and have those potential customers tell them ‘this is great. I would use it. I would buy it. Here’s what I like, here’s what I don’t like.’ This is the most critical part for entrepreneurs – everyone falls in love with their technology, but we’re more concerned with the demand and market needs.”
Do a lot of ideas get killed off at this point?
“Well, yes. But that’s a good thing. If you’re going to fail, we want you to fail fast and cheap. You don’t want to be one year and a million dollars in and realize you have a problem.”
How is Innovate Mississippi funded?
“We are set up as a nonprofit. The state studied how best to do technology and innovation and entrepreneurship, and determined a nonprofit model was the best. We get between 25 and 50 percent of our (funding) from state appropriations. The rest comes from grants we are always applying for and private sponsors here in the state.”
What is your annual budget?
“About a million dollars.”
Do clients pay anything?
“They don’t. The (Securities and Exchange Commission) has some rules on what you can and can’t do on taking fees.”
While clients don’t pay fees, do you provide financial support to clients?
“We manage a program that is an investment program called the Mississippi Seed Fund, and we connect (startups) to investors to put their money in. We have pitch competitions, where (individuals) can win grant money with no strings attached. It’s a fairly small amount, $3,000 to $5,000, but there’s no grant program or anything like that.”
How many startups have you helped?
“Now more than 1,200. We call them startups, but ideas are more accurate. We help about 100 (entrepreneurs) a year. Fifty-seven companies have raised about $36 million (in investments) through us and have gone on to raise a lot more after they leave us.”
Do any of these companies give back to Innovate Mississippi once they’ve become successful?
“Often as their companies become bigger, they may become corporate sponsors for our events.”
When ideas are pitched to investors, how many of them go on to be successful?
“On average in tech space, the success rate is pretty awful. What you see out of 10 investments, six will completely go to nothing, two or three will meander along and not be huge, and one will take off. When we work with investors, we tell them to diversify their investments for the same risk reason.”
Where do investors come from?
“It’s a group we’ve met over the years (that is made up of people) interested in investing. We’re always trying to grow that.”
What does the average person who comes to you look like? For example, are they just out of college and have the next app idea? Or is it a more seasoned person who has been working on a technology for years?
“Almost always the person with the technology or product in mind is not an experienced business person. If you look at what a company needs, they need good marketing, finance and planning. Almost always the idea(s) person is who comes to us. We do see a lot of young people, early 20s and recent college grads, but we also see some very experienced entrepreneurs.”