By Sarah Binder
CEDAR RAPIDS—The math was in his favor.
“It wasn’t that I missed Iowa, I didn’t have any big connection to the state,” said Mike Draper, owner of RAYGUN, of his decision to move his witty t-shirt business to his home state after starting out in Pennsylvania.
In Philadelphia, rents for a retail store were roughly $8,000 per month and there were six other stores doing the same thing. In Des Moines, the same storefront cost about $1,000 per month and his feisty fashion concept was unique.
Mr. Draper shared lessons learned with hundreds of other entrepreneurs as the keynote speaker at EntreFest!, an annual traveling conference that stopped at the Hotel at Kirkwood in Cedar Rapids March 7-8. The two-day event with more than 30 speakers drew entrepreneurs from across the state.
The population and GDP of the Midwest is larger than that of the United Kingdom or France, Mr. Draper pointed out, adding that the opportunity for business success is here.
“There’s only so long you can send kids from Iowa to New York before it’s just a bunch of people from Iowa,” he said.
His first sales came on street corners out of a backpack. The history major at the University of Pennsylvania printed tshirts that read “Not Penn State,” a joke on the campus dating back to the 1970s.
“We were just getting beat over the head with a good business idea,” he said.
The company (then called Smash) started screen-printing its own shirts after Mr. Draper learned “the vast majority of other humans are unreliable,” then came back to Des Moines, opened a storefront in the East Village, an arts and cultural neighborhood, and proclaimed itself the “Greatest Store in the Universe.”
During the first month, the store made about $3,000 with Mr. Draper, the sole employee, working 72 hours per week.
“That’s a lot of time to think about how you should’ve gone to law school,” he said.
However, the company became known for its slogans, full of half-winking Iowa pride: “Des Moines: Hell yes,” “Iowans: the few, the proud, the extremely attractive,” and “Idawahio! America’s famous potato-corn-tire state.” RAYGUN later opened a second store in Iowa City’s pedestrian mall and spun off the screenprinting business, now known as Eight
“There’s really no way around hard work,” Mr. Draper said, noting that even rock stars have to practice and hire smart managers. “Some of it is the idea, but 90 percent of it is the person working it and the situation.”
RAYGUN hit a rough patch in 2011, when, as Mr. Draper said, “I tried to sink the company with a line of jeans.” The company still sells its original brand of jeans, but it’s not what the company is known for.
Mr. Draper realized that even though RAYGUN was best known for selling tshirts, it wasn’t really a clothing company. It was more about the slogans, printing and designing; whether on t-shirts, posters or koozies.
After coming to this conclusion, Mr. Draper put his signature wit to use in a book, “The Midwest: God’s gift to planet earth!” which came out in 2012.
That was an intimidating time for the company, he said. To recover from the losses of the jeans, they had to take on a venture that was equally large, untested and expensive.
“The confidence to rational thinking ratio can kind of be overwhelming for an entrepreneur,” he said.
Taking the family business global
Steve West has spent 16 weeks in complete solitude, building his business.
Just not all at once.
“It’s what I call time to be able to connect the dots,” the chairman of West Music said of his quiet time.
Nearly every Sunday evening, he spends three hours alone, planning for the week ahead and pondering the creative aspects of the business. Over 40 years, that time has added up.
“I think that helped define how we were able to grow as an organization,” he said.
West Music was founded in 1941 by Mr. West’s parents, Pearl and Eleanor West. Steve West initially wasn’t sure if he wanted to follow in his father’s footsteps, but after a few years he found his passion for the industry.
“You could see how music was changing their lives. I kind of got bit by the bug,” he said.
After Mr. West joined the company, it expanded from a single-storefront music shop to an international, multi-faceted business. It is the exclusive importer of Miyazawa flutes from Japan, a professional-grade instrument that Pearl West helped develop. In 1988 Westco, an import/export wholesale company was established to distribute the flutes and other instruments from around the world. The West Music Education Catalog is sent to schools throughout the world, and the music therapy services address physical and emotional needs at all ages.
In Iowa, West Music operates six storefronts, where it remains known as a neighborhood music store, maintaining the core competencies of instrument sales and repair and music lessons.
Building the international business, especially when starting Japanese flute production in the 70s, was a learning process.
“A handshake and a look in the eye with a foreign distributor can be worth more than any legal document you could make up,” Mr. West said.
West Music works with 18 foreign companies, he said, and he has inspected their factories, met with the owners and, in many cases, visited their homes. Those relationships are key to dealing with inevitable problems as they arise, he said.
The payoff is greater specialization.
“To be a generalist, and try to compete against Amazon or whatever — it’d be very difficult to be successful,” he said.
Mr. West was CEO of the company until 2008, when he stepped out of the day-to-day operations and into the chairman role. Robin Walenta is CEO, and Mr. West’s son, Ryan, is a senior vice president.
West Music is family owned but professionally managed, Mr. West emphasized.
Within a family business, he said it is important to give non-family employees equal room to grow so they don’t leave the company.
“You have to be very vigilant to make sure the lifecycle of the business isn’t the same as the lifecycle of the owner,” he said.
Community success stories
Sometimes doorstops are all it takes.
Lynn Allendorf, the acting director of The John Pappajohn Entrepreneurial Center, said the little detail of propping doors open helped make the Bedell Entrepreneurship Learning Laboratory, an incubator for student businesses, a more collaborative, inviting space.
Ms. Allendorf was part of a panel on startup community success stories.
Mark Nolte, president of the Iowa City Area Development (ICAD) Group, said the very metrics by which they measure economic development have changed.
“Throughout the 70s, 80s, 90s, 2000s, that meant, spend 70 to 80 percent of your time trying to recruit the next big company,” he said, noting that economic developers used to measure success in numbers of trade shows attended or postcards sent out.
However, they realized that some of the largest employers in the region, such as Rockwell Collins or ACT, weren’t recruited here, they were built here.
“That’s not appropriate anymore for today’s world — it’s based on result,” he said. “The bulk of our work now is, how do we assist companies that are already here stay innovative?”
To that end, ICAD Group recently opened its own coworking space, the Iowa City CoLab. The space had a ribbon cutting after EntreFest! March 8, and is home to several companies as well as drop-in coworkers.
Joe Jennison, director of Main Street and marketing for the Mount Vernon-Lisbon Community Development Group, represented a different kind of economic development — the kind that happens in small Iowa towns, without many staff or financial resources.
Mr. Jennison is the only employee of the community development group, but he has built up a network of about 350 volunteers who want to help support the community.
An ongoing example is Project Bright Idea, where a Lisbon businessman offered up an office building, rent-free, to the entrepreneur with the best business plan. Finalists for the contest will be announced in April. After the idea was announced, other area businesses came up with ways to pitch in, Mr. Jennison said.
“If somebody walks into my office with a great idea, I drop everything,” he said.