May 26, 2013
The head of the Colorado Springs Technology Incubator wants to help create local businesses that can grow to have a nationwide presence.
And he has the business background to do it.
A physicist, Ric Denton taught physics and worked in systems analysis in Germany from 1971 to 1977 until returning to the U.S.
Once home, Denton developed an Optimal Control Systems method for the military. The system made the existing Single Integrated Operating Plan, which is "basically the overall plan for going to war," more efficient, Denton said. From there, Denton opened two companies in 15 years. One was in avionics flight controls; the other set "the gold standard" for digital imagery used in today's dentistry and other medical fields, he said. Denton is also the past chair of the local chapter of SCORE, which offers free and confidential business counseling.
Now Denton is trying to help others create "mega-companies," not just mom-and-pop businesses, by encouraging ideas, helping to raise angel investor capital, creating an atmosphere of cooperation and teaching others through his position as president at the incubator.
Question: What's the main purpose of the Technology Incubator?
Answer: We try to identify people that have ideas for a high-growth, scalable company that will have a national sales footprint. (Scalability means a company has the potential to grow disproportionately to the number of its employees.)
Q: How do you help people with those ideas grow their businesses?
A: We show them how to raise funding, because these kinds of companies traditionally don't receive bank financing. We also provide any and all mentoring.
Q: What kind of business ideas must people have to come to the incubator?
A: There are a lot of intangibles: Do you have a unique proposition to offer your customers? Can you grow in the face of competition? What is that competition? Can you achieve an unfair competitive advantage that you can sustain over time?
Q: What's the challenge to finding people with those ideas?
A: I am just not sure everyone realizes they can be an entrepreneur, and most entrepreneurs, two-thirds, are not young kids. They are the 40-somethings. Those with some resources and sector or industry knowledge.
Q: What are the challenges to starting new companies in the Springs?
A: We certainly need a lot more risk capital. And we have that tradition of people who talk about working together, but you have to wonder if that is what's happening. Also, it's my belief that we are a city faced with scarce resources. When that happens, people want to be all things to all people, and that doesn't work. Each of us needs to figure out what our core competencies are, and I don't see that happening with other organizations in town.
Q: Is there anything local government needs to do?
A: It needs to look at things like permitting, not for the large companies, but smaller companies. Right now, you have to go through something like seven to 10 different permitting processes and departments, depending on the type of business, to get a permit to open your doors.
Q: What do you see is the biggest failure or problem that stops new companies from succeeding?
A: First and foremost, it is the management team. You have to plan and plan well, and work the plan. You can change it, but if you don't plan at all and figure what the gotchas might be, you are probably going to be in trouble. Sometimes you get blindsided by someone who introduces a product too similar to yours. And sometimes even if you come along with something that is better than what's out there, you just can't overcome the first company on the market.
Q: So I have a great idea, the capital I need and the training. What are my odds for success?
A: The odds of having a true home run, like a 100 times return on your money, is about one in 20. Only about 40 percent return the original capital investment, and about 50 percent go bankrupt, according to venture capital statistics.
Contact Ned Hunter: 636-0275.