Who are the leading startup experts? What makes a startup expert? How does someone acquire the skills and expertise to advise startups on all the challenges they will face and guide them through it?
Ross Blankenship is the Founder of Angel Kings, creator of online technologies, and expert advisor to startups across the World. In this profile of Ross Blankenship, we analyze his resume, background, and discuss how he became a successful entrepreneur.
Ross Blankenship’s Resume and Background – Analyzed
Ross Blankenship has a grade A+ resume. During high school at Northfield Mount Hermon School, he was accepted to Cornell University, where he enrolled and graduated with honors. After Cornell, he attended and graduated from the Washington University in St. Louis, School of Law. Saint Louis, Missouri was the perfect place for a budding entrepreneur like Ross Blankenship to spread his wings. He worked in the community of St. Louis to start businesses and help advise other entrepreneurs, and then also concurrently did work for the U.S. Securities and Exchange Commission (SEC). Working at the SEC allowed him the opportunity to see the world of business from the regulatory side as well. These two experiences inspired his entrepreneurial drive.
Ross Blankenship’s attention to detail and understanding of companies soon became one of his strongest skills, something that would serve him well later on with investing. One of the most interesting things that Ross Blankenship said during our interview was, “the biggest factor that determines whether a startup founder is successful – is the fear of inaction, not of failure.”
It became clear in our candid conversation that this theme has made a huge difference in his understanding of founders and what makes a startup win, even in the most competitive markets.
The Fear of Inaction in Blankenship’s Life
Speaking on his experiences learning to run a startup, Ross told me you have to dive right in feet first and create. According to Ross Blankenship, “do your research, rapidly…understand your market…and launch as soon as you have a basic Minimum Viable Product (MVP).”
Startups are about speed, i.e., who is the fastest entrepreneur to capture a market and make it to profitability. He remembers vividly sitting in his apartment in St. Louis, contemplating starting online e-Commerce websites. Ross told me he had no fear that what he was doing was the right thing to do. Between balancing hundreds of pages each week from Law Reviews and Treatises, his boredom with the regular, mundane schoolwork forced him to learn how to create and run startups.
His first startup experience with a startup was while attending Cornell University. During his junior year, as a big-time hockey fan, Ross came up with a T-shirt idea for the annual Cornell vs. Harvard Rivalry hockey game. The shirt said “Harvard Sucks.” It was a simple t-shirt, three different sizes, and sold close to 2,000 T-shirts in less than 48 hours. People were emailing and calling their friends to tell them about these T-shirts. Ross set-up a stand in the middle of the Arts Quad on Campus, right in the center of student traffic. From this two-day experience, Blankenship was able to save enough money to start more “consistently” selling businesses. After all, there’s only a certain number of hockey games in a year.
Earning revenue from this simple idea sparked many more ideas. But the idea for Blankenship has always been to, “take a simple product concept, validate demand, launch locally, then nationally.”
With these experiences, Ross has been able to found his startup web development group called Angel Kings, as well as many other successful ventures. Ross Blankenship’s investing strategy is known as “The Blankenship Method,” something he teaches at educational institutions and community gatherings.
Blankenship’s Valuation Method for Startups
The Blankenship Method, which is an excellent way how to put an accurate valuation on startups, consists of five parts: People, Product, Process, Traction, and Financials.
These come together to create a hybrid startup valuation method that allows any person – from the beginner investor to the experienced and advanced venture capitalist – the ability to objectively place a value on a company that is raising money.
Indeed, there are many startup valuation methods such as: Asset–Based Valuation method, the Berkus Method, Comparable Transactions, Discounted Cash Flow, according to Angel Kings.
However, Ross came up with a new idea of the best way how to analyze, review, and place an accurate valuation on more than 5,000 startups per year. He used his financial due diligence background from working at the SEC and his training from law school trying to understand the core of every startup’s issues that arise, post-launch.
The Blankenship Method combines the best-of-the-best in reading, reviewing, evaluating, and determining whether a startup is worthy of investment. The Blankenship method also takes the guessing out of the equation and puts the control back in the hand of investors looking for a return on investment (ROI).
Hypothetically, one could use this strategy to build a profitable startup rather quickly. Taking the Blankenship Method and applying it to a software startup, for instance, we can see how it would work.
First, we would look at our people – the founders. Are they skilled, qualified, and determined to win? If our team isn’t ready, then we won’t be successful. We need to have the software experts to not only create our products but also work through bugs or errors customers discover. We also need a sales and distribution team to get the product in people’s hands and a marketing team to get people thinking about it.
Speaking of our product, we need to evaluate it about other offerings on the market. Is it competitive? Will it hold some quantifiable advantage over the competition for the foreseeable future?
What is the process like for our software startup? Do we have a viable way of making money right out of the gate? Companies using the Blankenship Method are forced to consider if their processes are up to date. Perhaps quality and process engineers ought to be brought in.
Equally important is the idea of traction. Will our company be able to gain traction quickly? Especially in the field of startups, if you cannot gather a following of innovators quickly, your product may not be able ever to catch on.
How to Best Understand and Evaluate Startup Financials
All of these point to financials. Will our company be profitable? We can only hope for this if we follow a reliable methodology. The Blankenship Method allows us to evaluate each aspect of our software startup and see where it might be lacking. We can assign points to each factor based off of how well it values, and then weight those in the Blankenship model and assign our startup an overall score to estimate how likely we are to succeed. Ross describes the startup valuation method and how to do this in Blankenship’s book about startups “The Investing King.”
We can see how this method could be useful for current companies that are facing issues adjusting to the 21st century. Stores like Best Buy and JC Penney have encountered problems and suffered financially in dealing with this.
For example, by looking into these five factors from the Blankenship Method, these companies could identify what category their issues fall into and make improvements. JC Penney arguably doesn’t have traction with consumers anymore. They need to determine what exactly it is that is letting other companies like Amazon and the GAP gain and maintain traction while they struggle.
One of the most impressive things that we discussed in our interview with Ross Blankenship was how to rank and evaluate startups in a formal method.
During the past five years, and through the review of a myriad of startups, the team at Angel Kings created a unique ranking system to classify the best startups in America.
For example, here are some of Blankenship’s favorite startups to watch for 2019, 2020 and beyond:
Big Data Startups:
(1) Notable Labs
(2) Neurable Labs
(3) Spero Therapeutics
(2) Sift Science
(3) Argus Cyber Security
(1) Slack App
The reason that these startups are ranked so highly is because they all score well on the Blankenship Method. Without a methodology such as his, it becomes much harder to objectively determine a valuation.
At the core of these rankings is the idea that all five pieces: people, product, process, traction, and financials, must score higher than a 90+ and continue to rank higher at later funding rounds. The Blankenship method is brilliant.
Media expert on startups and entrepreneurship – Ross Blankenship
In this past years, Blankenship has been interviewed and featured in several publications from Bloomberg Magazine, to Blankenship on Crunchbase to the Biz Times where Blankenship discusses the future of technology and venture capital in rural America.
Blankenship continues to help companies understand how to achieve profitability and what technologies are critical on the road to an IPO, merger or acquisition.
The Blankenship Method is a useful hermeneutic for examining these things. If you are interested in learning more about Ross Blankenship, or want to know how to make your startup successful too, connect with Angel Kings’ team.