This post is from guest contributor Wade Sikkink:  After spending the first part of my professional life inside huge organizations (US Navy, Fortune 500 companies) I became interested in startups and entrepreneurship. I started dabbling in side business ventures while reading more and more about startups and the startup scene.  I’ve been involved in several business ventures, some modestly successful, some not so much and one that imploded leaving a huge crater. I’ve learned a lot along the way and want to share some of what I’ve learned.

It’s that time of year again. No, we’re not talking about holiday cheer and presents. Entrepreneurs in Nebraska always look forward to the annual Nebraska East 2 West Venture Competition hosted by Invest Nebraska. E2W is a one-of-a-kind statewide competition that features some of the most promising startups in the state. This year’s competition was held Nov. 18 at Talent Plus in Lincoln.

Although the competition doesn’t get much popular press, a good crop of six finalist companies were featured. This year’s finalists were chosen by a panel of six judges and featured a wide range of industries and stages. Companies submitted a business plan for the judges to review. The top six were invited to make a 15-minute pitch to the judges and answer questions for an additional 10 minutes.

This is a venture investment competition, so a little review on pitching is in order. Entrepreneurs usually are enamored with their product or service; however, potential investors are more interested in the business opportunity. In short, the focus needs to be on how the business will make money. Some of the companies had a handle on this. Some did not.

This might bring to mind the famous story of when legendary angel investor Ron Conway met with Larry Page and Sergey Brin to talk about their new search engine. They had no business and no clue how it would make money. But Conway was so impressed with the product that he invested and the rest, as they say, is history.

But most entrepreneurs are not Larry Page. They should stay focused on the business opportunity.

So, who were the finalists?

Pro-fit Performance Club Fitting, which has developed an innovative, patented software program for properly fitting golf clubs.

The Coloring Book Artist, which produces customized coloring books using the talents of Nebraska artists to celebrate life.

RestingSpot, which provides a unique combination of mobile and web technologies to connect the memories of loved ones who have died with the precise location of grave sites.

Ace Ortho Solutions, a custom manufacturer of orthopedic braces for dogs.

Agricultural Flaming Innovations, which develops flaming equipment for full-season organic weed control.

Mobile Truckr, which produces a mobile technology platform to handle document acquisition and transmission within the trucking industry.

Clearly, a wide range of industries were represented. The finalists ranged from ideas barely a month old to established companies with hundreds of thousands of dollars in revenue. They all also had different issues to solve in getting their businesses to grow. Some likely will face challenges scaling up to anything bigger than a hobby. Others don’t have a finalized plan for distribution. Another had a huge market opportunity, but no solid way to monetize it.

In the end, the judges seemed to go with the company that had a big market, a good way to monetize its product, established technology and a plan to scale. Pro-fit Performance Club Fitting was chosen as the winner for 2011. The company wins a $10,000 cash prize and the opportunity to negotiate with Invest Nebraska for a further $50,000 investment. This Lincoln-based business has an established technology that has been proven in the market. It is in the process of converting its Windows-based software to a web-based platform, which will allow the company to scale to golf pros nationwide relatively easy.

Attending the presentations is fun and gives you an up-close look at some of the up-and-coming companies in Nebraska.  As a bonus, there are opportunities to network and hob nob with the entrepreneurs when the competition is over. In the future, hopefully more people will learn about the event so a bigger audience can hear from another group of exciting new companies in Nebraska.

Expansive fields of crops are common sites in Nebraska. Behind every field there’s a specific science that focuses on the best way to plant, irrigate and harvest these crops.  Many farmers don’t have the proper equipment to yield the best results. This is where Nick Emanuel and CropMetrics come in.

Emanuel, a native of North Bend, Neb., worked for John Deere for two years developing of new technologies for various GPS systems. He returned to his family farm and founded CropMetrics in 2009.

“I was always about small business growing up on a farm and in college,” Emanuel said. “I saw a lot of potential for what I was developing.”

CropMetrics is located in North Bend that specializes in yield optimization technology. In other words, CropMetrics helps farmers develop efficient ways to irrigate crops and produce the highest growth from those crops.  CropMetrics maps out each acre and examines soil types, water and other variables. Once this is calculated, the farmer then knows the exact amount of fertilizer each area of land needs for the best crop yields.  Emanuel said using this system also conserves water usage.

Emanuel said using CropMetrics saves time and money for farmers. He also said it’s big for Nebraska because of the constant need for statewide water conservation in fields.

“This is the first technology that’s come out to help [farmers] conserve water use,” he said. “Besides the income potential, the conservation aspect is a huge deal.”

Emanuel developed an interactive program called Virtual Agronomist Pro that allows those using CropMetrics to monitor their progress.  CropMetrics is the only company nationwide to develop interactive software such as this.

Getting the word out about Emanuel’s business required several different methods including web marketing and visits to trade shows throughout the country.  Emanuel worked with Invest Nebraska, a company that helps local businesses get started.

Once established, the company created an advanced, interactive website that includes an online application for those interested in utilizing CropMetrics’ services.  This is another example of the interactivity Emanuel prides CropMetrics on having by providing more convenient services to its users.

Moisture probes (left) are used to measure a soil's moisture level and sends the data back to CropMetrics' web portal via the Crop Link unit (right).

Since the company was established last year, this harvest season will be the first year CropMetrics will see results from crops.

Emanuel said CropMetrics has weathered the recession fairly well because of the constant need for agriculture and technology.

“The Ag community has been doing better than most,” he said. “The main challenge was bringing something new to the market and trying to prove that it’s something worthwhile and worth the investment.

“If we continue to prove we are [a good investment to farmers], we will continue to move forward.”

The success of CropMetrics comes from the clear plan Emanuel established. He focused on one thing: yield optimization.  By pinpointing one area, he was able to gain a foundation for his business. Emanuel said small businesses can’t start from scratch without planning and implementing goals.

“Start with a business plan, know your goals and don’t run into it blind,” he said. “It helps you stay more focused from the beginning and you can continue to grow. People often try to do everything themselves.”

Check out the Invest Nebraska site for more on how they helped CropMetrics.

Their software application tracks data like band mention and song plays on social media sites and other Internet venues, including Facebook, Twitter, MySpace and music blogs. RockDex compiles, analyzes and presents the data so that musicians, managers, record labels, publicists, booking agents and others in the music industry can use it when making marketing decisions.

For example, last summer one band and their manager used RockDex data to settle a disagreement with their record label over what song they should budget a video for, said Jimmy Winter, RockDex’s creator.

“We showed them the marketing data, and all at once the manager says, ‘Wait, wait, what’s that?’” Winter said.

The data showed the song the manager and band wanted for the video was suddenly organically rising in popularity. The manager sent a screen shot of the RockDex data to the record label and the label agreed to use that song.

RockDex, part of Beyond Measure, LLC, has received attention both locally and nationally for its innovative market research capabilities for the music industry. In March, RockDex was one of five companies winning the SoundCtrl FlashFWD campaign at the SWSX Interactive Festival in Austin, Texas. According to SoundCtrl’s Web site, the award recognized companies that use scalable, community oriented, commercially viable and innovative technology to promote the music industry.

In November 2009, RockDex won Invest Nebraska’s East 2 West Nebraska Venture Competition, which earned the company a $50,000 equity investment from Invest Nebraska.

How did Winter, a young man originally from Gretna, Nebraska, start a company reaching the music industry, with its power players on the coasts and in larger cities? While still in high school, Winter caught the attention of a company called Fastmusic.com in New York City. When Winter had technical difficulties ordering four punk rock CDs from the new Fastmusic.com’s Web site, he emailed the company with possible solutions to the online ordering issues.

“And it kind of fixed the problem. So me, being 17 years old, I just called them up every couple days … I just kept talking to them and eventually they offered me a job. I was really lucky, in the right place at the right time. Story of my life,” Winter said with a laugh.

He worked remotely for Fastmusic.com during his senior year of high school. The company flew him to New York ever month or two, and he spent most of the summer of 2000 there, he said.

Winter later developed Music Arsenal, a contact relationship manager (CRM) application for Drive-Thru Records, retaining the rights to it so he could market it to other labels and bands. With investments from family and friends, Winter developed and sold the Music Arsenal for several years, traveling to music industry conferences across the country.

Winter said he was thinking about ways to make Music Arsenal better when he came up with the idea for RockDex. His original concept was for a site that would send Web traffic to Music Arsenal.

“And then I went down to SXSW last year,” Winter said, “You know, banging the Music Arsenal drum like I have for the past four years before that, and people were saying, ‘Music Arsenal, that’s cool. Tell us more about RockDex.’”

People quickly grasped how RockDex could meet their business needs, Winter said.

“Music Arsenal never made a ton of money. But everything I learned there I can now apply to RockDex,” he said.

RockDex’s merger in 2009 with Kansas City-based Locker Partners, a social-media, marketing and music management company whose employees have years of music industry experience, put the action to the analytics. RockDex analyzes the data for subscribers and provides marketing suggestions. For example, RockDex might encourage band members to tweet to fans living near an upcoming concert location.

“We’re really big into not just giving our clients a big pile of data,” Winter said. “It’s nice and it’s pretty but it’s not going to do anybody any good. We want to make sure the data makes financial sense, you know. We don’t want you paying for this if you’re not going to use it or understand it. So we work with the labels and artist about how to make sense of what the numbers mean.”

RockDex not only provides broad baseline data to let a band or label know how they are doing, but also gives them “deeper” data than competitors provide, Winter said. RockDex collects samples of what people are saying on Facebook or Twitter, and what links are being shared.

By looking at a snapshot of data, Winter said, RockDex can give subscribers not only numbers, like how many fans were gained on a given day, but also deep data like what people actually said about the band that day. “What were the key words people were using? Was it ‘video?’ Was it ‘Rolling Stones article?’ Was it ‘new single’ or ‘new song?’ And then that gives you a much broader picture and a deeper understanding of those numbers,” he said.

Winter said talking to others with experience helped prepare him to be an entrepreneur.

“I’ve had a lot of advice from some really smart people,” Winter said. A representative from SCORE, a nonprofit business counseling organization, helped him with his winning RockDex business plan, and he’s received advice from Ken Moreano, director of the Scott Technology Center, where RockDex is a virtual incubator company. In addition, Silicon Prairie News has been supportive, he said.

“Before Silicon Prairie News, I never knew there were any really cool Web startups in Omaha,” he said.

The RockDex Pro application has been available as a private beta for a little over a year, but Winter said to watch for their public launch soon.

Q: What types of businesses should apply for the Operational Assistance program?

A: The Operational Assistance program helps companies with potential to attract major investors. These companies are either based in Nebraska or willing to relocate headquarters here. We want to focus on scalable or high-growth businesses. These businesses have creative, competitive ideas and often start with a model that can be replicated. They have potential to earn at least $20 million in sales or revenue. They typically export goods or services out of the local economy to bring dollars to local communities. We’re looking for entrepreneurs who thoroughly understand their businesses and business models.

Q: Who are these major investors?

A. They are venture capitalists, who are professional investors, and angel investors, individuals with a high net worth. These investors are putting in substantial dollars so they want a high return, usually between 20-30 percent. The higher return is necessary due to the risky nature of these investments.

Q: How do companies use the program?

A: The loans help entrepreneurs prepare their companies to attract major investors. The money needs to be used to build out that additional piece they need. For example, they might use it for adding server capacity or paying for patent costs.

We also help them with good corporate governance. We attend board meetings as an observer. It’s important to have good corporate records and structure to attract angel investors and venture capitalists. We bring experience to those issues.

Q: How does the loan work?

A: It’s an Invest Nebraska loan at a below-market interest rate. The four-year loan is payable in the last three years of the loan. There are no payments the first year. We don’t want to make it so burdensome for entrepreneurs who have a lot to deal with already.

You can find more information at www.investnebraska.com.

Q: Where does the Operational Assistance money come from?

A: The Nebraska legislature created the Nebraska Operational Assistance Act, LB 425, in 2007 to provide assistance to high-growth businesses that could be attractive to venture capital. The act calls for the legislature to appropriate funds for a state Department of Economic Development grant. The grant is for a nonprofit organization that will administer the program and match part of the funds. Invest Nebraska applied for and received $500,000 for 2008-2009. We resubmitted our request for 2010-2011, and we expect to sign for it in February.

Invest Nebraska

NebraskaEntrepreneur.com talks to Dan Hoffman, executive director of Invest Nebraska, about their Venture Competitions. Invest Nebraska is a nonprofit corporation that advises and invests in entrepreneurial businesses in Nebraska. In future posts we’ll talk with him about other Invest Nebraska activities and opportunities.

Q: What are the Venture Competitions you organize?

A: Last year we had six successful business plan competitions held across the state – five regional competitions and a statewide competition. We reviewed over 100 business plans from across the state. Most of the judges for the regional contests come from that area.

Winners get an equity investment award, typically around $20,000 to $30,000, and the contacts and expertise of our board members and me to help them grow the business.

I think we are accelerating entrepreneurship in the state, not only because we are creating successes, but also because the competitions force entrepreneurs to take that next step and develop their business plans. Competition brings out the best in people and their ideas.

Q: Who should enter the Venture Competitions?

A: Both startups and existing businesses can enter. They should be located or willing to locate in the area of the contest – the specific region for the regional contests or anywhere in the state of Nebraska for the statewide contest.

Business ideas vary – the regional competitions look different in different parts of the state. If we had a competition just in the city of Lincoln, we might get more technology-driven businesses due to the concentration of students and the universities and colleges in the area. In the Western part of the state we might get more lifestyle businesses like Cabela’s. In either case we are looking for opportunities to bring new dollars into the local area. We say it’s worth it for everybody to apply. Completing the business plan is another step forward to meeting your goal of being an entrepreneur.

The judges look not only at the business plan but also whether the entrepreneur can carry the plan forward. Does this person have the passion for it? You can tell those people who have the passion. While some of the winning plans are well-written, others are not as well-written but the entrepreneurs do have the passion.

One item we look at is competition. Is this idea something unique compared to other competitors? Does it have some competitive advantage?

One interesting result from last year was that all five regional winners happened to be women.

2009 winners: Ashley Hagan & Jeffrey & Stephanie Dusatko - Photo Credit InvestNebraska.com

Q: What makes the Invest Nebraska competitions different from other business plan competitions?

A: The prize isn’t just cash – it’s an actual investment. Invest Nebraska becomes a shareholder in the venture. Members of our board of directors help advise the business and become a source for contacts and opening doors. The business and Invest Nebraska negotiate details of the percentage of equity to be owned by Invest Nebraska after the contest.

The Invest Nebraska competitions are based on the success of Hormel Family Foundation’s Hormel Business Plan Competition, which started in 2007.

Q: What business plan competitions will Invest Nebraska have in 2010?

A: In 2010 we will have the same competitions as last year. The planned months are tentative: April for the Western Nebraska Venture Competition in Scottsbluff; May for the Northeast Nebraska Venture Competition in Norfolk; June for the Hormel Family Foundation Business Plan Competition in McCook; September for the York Venture Competition in York; October for the Southeast Nebraska Venture Competition in Peru; and November for the statewide East 2 West Nebraska Venture Competition in Omaha. There are more details on our Website, www.InvestNebraska.com, or you can email me at dan@investnebraska.com.

We think if entrepreneurs start seeing the same competitions come up every year they are more apt to put the effort into completing their business plans. Part of this is an ongoing trial: Is the regional structure a good approach or should we concentrate on cities? In a few years we hope to see.