041: Dan Lauer (UMSL Accelerate)

Dan Lauer on Innovation City

“I always say 95% of companies fail, 75% of companies who go through accelerators succeed. That’s kind of the new way of entrepreneurship.” — Dan Lauer

Welcome to Innovation City—powered by Venture Cafe—where Tyler Kelley and Michael Johnson, Co-Founders of SLAM! Agency, interview innovators, creators, and disruptors to discover how business is changing in the modern world.

Created and produced by SLAM! Agency in conjunction with Venture Cafe St. Louis and Venture Cafe Miami, Innovation City gives you an inside look at how rapidly business and culture are changing thanks to increasing diversity and inclusion, heightened creativity, and a stronger and better-connected business community. Venture Cafe is the largest combined gathering of entrepreneurs and innovators anywhere in the world. Events are held every Thursday in St. Louis, Miami, and other leading innovation cities around the globe.

Today’s guest is Dan Lauer, Founding Executive Director of UMSL Accelerate, the entrepreneurship initiative at University Missouri St. Louis. Dan is also the founder of Lauer Toys and the inventor of Waterbabies. He has a long history of involvement in the entrepreneurial ecosystem—both as the founder of multiple companies and as a catalyst helping other entrepreneurs make their mark. Under his guidance, UMSL Accelerate is working to change the university’s culture by giving students a way to test their entrepreneurial spirit. Dan sits down with Tyler and Michael to talk about his own entrepreneurial path, the power of failure, the best time to take a chance on your dreams, what you can learn from a rejection letter, and much more.

They discuss:

• Waterbabies are one of the longest-selling baby dolls ever produced
  • 24 million units sold in 26 years
• Where the idea for Waterbabies came from
• Waterbabies was the disruptor in the toy ecosystem of its time
• 2 types of innovation:
  • Core Innovation
  • Leap Innovation
• The importance of finding a variety of price points
• Staying fresh for Wal-Mart and Target
• Devoting a percentage of budget to leap innovation technology
• The early days of Waterbabies
• Dan’s early career as a banker
• Discovering his capacity to serve as a catalyst or a change agent
• The importance of taking chances when you’re young
• The toy industry as fashion industry
• Putting process around your dream; building backward from dream to first acts
• Writing over 700 letters trying to get in the door to sell Waterbabies
• What you can learn from rejection
• “They were asking about the ‘how’, but they liked the ‘why”.
• The value of prototyping
• No such thing as an overnight success
• 7 out of 10 rejection rate on the first production, but managing that hurdle served as a tipping point for Dan
• Handing out warm Waterbabies on a cold November night helped push them over the edge
• UMSL Accelerate’s goal of being the first choice for entrepreneur students across the nation
  • Educate. Innovate. Collaborate.
• Design thinking, agile thinking, and soft skills benefit everyone, whether or not they become entrepreneurs; serving as a workforce developer
• The power of doing, making, and connecting vs. sitting in a classroom listening to a lecture
• Students don’t have enough money or enough time; how UMSL Accelerate can put a process around student’s ideas
• Keeping the program running in the black from Day 1; the importance of having customers from the outset
• Adding money and mentorship to accelerate the growth of incubators
• Large legacy companies know they need to talk to innovators to keep evolving
• Being the first university-driven Accelerator program in the nation
• Creating corporate-powered programs
• Angel investor Express Scripts
• Ameren’s involvement and cultural similarities
• Unintended benefits of bringing people together
• 200 applications in Year 1; 300 applications in Year 2
• Developing greater permeability between the university and investing companies, providing an ROI beyond just the generosity of being a donor
• Leadership, culture change and innovation are not easy, and not every company has the capability or the desire to work in the entrepreneurial space
• Thinking about how all the accelerators in StL can play nicely together
• Learning more from failure than success
• Shortening the path to success
• Older mentors can serve as a stabilizing force
• Why it’s getting harder to raise money outside of an accelerator