How to Start Your Second Company
February 1, 2018 • Arch Grant News •
Looking to start your second business? Two-time founder and Arch Grant recipient Blake Marggraff shares his secrets to sophomore success.
There’s no sweeter moment for entrepreneurs than realizing that their first startup is going to succeed. But many founders find themselves wondering about the next idea, or even the next company, and how they can turn that idea into reality.
Blake Marggraff has been an entrepreneur for most of his adult life. While studying biology at Washington University, he co-founded Betabox, an edtech company that provides prototyping equipment to schools and universities across the country. With the help of an Arch Grant, he helped build Betabox into a rising player within the industry.
But Marggraff didn’t stop there. He turned his ongoing research in digital health into another company, Epharmix, in 2015. The company helps doctors and patients communicate and transmit medical data remotely.
Marggraff’s first-hand knowledge of St. Louis’s startup community and connections to local resources turned his passion project into a successful startup. Here’s his advice for first-time founders looking to start their sophomore business:
1. Follow Your Passions
Anyone involved in an early-stage startup will tell you that passion is your most important resource. In the early days of a startup, your conviction and determination will keep you afloat during the hardest moments, as well as help you stand out to potential partners and investors.
First-time founders who succeed pursue ideas they’re passionate about, and the same principle applies to the second company. You don’t necessarily need to start from scratch; think of a research interest you’d like to pursue, or a side project you’ve been working on. If your idea aligns with a competitive industry, find a niche where you’ll be a contender.
During his time at Betabox, Marggraff knew he wanted to take his college research project on digital health to the next level, even though it would mean switching his industry focus.
“I knew that I wanted to work in digital health for awhile, and it turns out that St. Louis was a great place to do that. I was working with a few wonderful co-founders who all wanted to turn this project into a business.” says Marggraff.
Thanks to his commitment to improving healthcare and biology background, Marggraff was able to impress investors and convince them to embrace his vision.
2. Forget (Almost) Everything You Know
Starting a company isn’t like riding a bike. No matter how much you learned the first time around, that knowledge won’t always serve you while building your second business. When Marggraff made the decision to turn Epharmix into a startup, he quickly ran into hurdles.
“When you shift from one startup to the next, it’s surprising how many things you can’t apply,” he admits.
What did serve him well, however, were the foundational entrepreneurial skills he learned as an Arch Grants recipient. “Legally setting up the company, hiring the team, securing early capital, setting up contracts – those are all things that I learned on Arch Grants’ dime.”
Marggraff believes that the entrepreneurial skill set is “fairly contained” but that not everyone has the resources to learn all those skills the first time around. When you start your second company, you’ll almost certainly encounter new processes, regulatory issues, or funding obstacles, especially if you’re changing industries. If you mentally prepare to meet those challenges, you’ll enjoy greater success.
3. Tap Your Network
Most entrepreneurs learn with their first startup that their network is the most valuable resource they have to get a company off the ground. What they might not know is how to work that network for a second company, especially if they’re changing industries.
Don’t make assumptions about what your network can and can’t offer. As Marggraff’s case demonstrates, help can be found in unexpected places.
“In the transition from the first company to the second, I ended up reaching out to a lot of the mentors, vendors, and community leaders who helped me start Betabox. Even if they didn’t know that much about digital health, they could introduce me to people who could.”
Each time an entrepreneur makes a connection, they’re building a network of “weak ties” who can hopefully be allies well into the future, even if the founder moves to a different company. Accelerators and startup communities can be especially helpful in this effort, as you always have a place to look for new nodes of that network.
Founding a second startup is challenging, but can be just as rewarding as the first. Pursue your passions, stay open-minded, and ask for help to get where you want to go.