Dell, Once a Startup, Works to Help Other Startups Succeed

Next year, Snap Trends, plans to hire 100 new employees.
The Austin-based startup, launched last summer, does social media monitoring and currently has 20 employees. It is hiring web developers, administration and sales people, said Eric Klasson, its founder and CEO. The company raised more than $500,000 from investors in August, according to an SEC filing. Klasson attended Dell’s Austin Think Tank for Entrepreneurs on Friday. His company belongs to Dell’s Founders Club, designed to assist a hand-picked group of startups.
Access to talent is one of the big challenges facing small business in Austin today, according to many of the 30 people attending the think tank event. And more than half of them expect to add employees next year.
Gene Marks, a nationally recognized small business columnist and speaker, led the discussion along with Ingrid Vanderveldt, Dell’s entrepreneur in residence and Drew Scheberle, senior vice president with the Greater Austin Chamber of Commerce.
Dell invited the entrepreneurs, which ranged from a furniture storeowner to a web design firm. The meeting is part of Dell’s big push to help startups and small businesses. It was its sixth think tank, but the first one in Austin. Dell held others in Miami, Atlanta, Chicago, Los Angeles and the Bay Area.
The focus for small and mid-sized companies in the next year is on increasing productivity, growing revenue and reducing costs, according to Dell’s research.
This week at Dell World, Michael Dell announced the launch of its new Center for Entrepreneurs. Vanderveldt leads the center, which offers access to technology, expertise and capital through programs like the Dell Innovators Credit Fund, Dell Financial Services and Dell Ventures.
At the event, the entrepreneurs talked about ways to hire new talent in an increasingly competition marketplace. They suggested networking at events like Door 64’s job fairs and happy hours, hiring interns and working with local universities. But some business owners complained that they could find talent but they couldn’t find people with a strong work ethic and passion. Some had to hire offshore to meet their staffing needs. They said passion and motivation often trump experience.
A skilled workforce exists here, said Scheberle with the Austin Chamber.
“People see Austin as a place of opportunity,” he said.
The workforce attracts big companies like Visa, General Motors and Union Pacific, which all recently announced plans to establish new innovation centers in Austin. But small business can still find people to hire here, he said. He estimates 100,000 people in Austin are underemployed. Retraining programs could put them to work in better jobs, he said.
“We can’t be complacent,” Scheberle said. “We have to work really hard to make sure we’re developing talent.”
In addition to attracting new talent, Austin’s small businesses face big hurdles finding capital to expand.
In 2013, 55 percent of Austin small businesses expect finances to improve and 70 percent expect a better sales outlook, according to Dell research. And 58 percent of small businesses tap into their savings as the top source to fund their ventures.
Tim Porter, CEO of Appddiction Studio in San Antonio, said he hasn’t been able to find bank financing despite having $600,000 in revenue in the last year.
The lenders want to see three years of financial statements before they’re willing to take a risk, he said. He’s financed his startup by tapping into his 401K retirement account.
David Davis, CEO of Provencal Home, said the bank for the furniture store cut off credit lines and called loans following the 2008 financial crisis.
The group brainstormed creative ways to finance businesses through crowdfunding, seeking angel investment from the Central Texas Angels Network and even using credit cards.
In addition, Dell will host a Technology Innovators Day on January 24th at its headquarters in Round Rock in which small business owners and startups can pitch to the top business executives at Dell to do business with the company or seek investment, Vanderveldt said. Companies need to apply at its website beforehand and Dell will select who gets to pitch, she said. Dell will evaluate the companies for acquisition, partnership or as potential investors, she said.
“Dell is basically doing everything and anything in our power to help entrepreneurs gain access to the capital they need,” Vandervelt said. “I’ve never seen a Fortune 50 company do anything as extensive as this. Dell is really reaching out to the entrepreneurial community.”