Tom Martin Q&A: Awesome Inc. founder says Lexington becoming 'hotspot' for video game developers

Brian Raney of Awesome Inc., on Wednesday February 4, 2015 in Lexington, Ky. Photo by Mark Cornelison | Staff
Brian Raney of Awesome Inc., on Wednesday February 4, 2015 in Lexington, Ky. Photo by Mark Cornelison | Staff Herald-Leader

Brian Raney is the co-founder of Awesome Inc., formed in 2009 as an incubator and launch pad for high-tech startups in Lexington. Brian's organization hosts community events, leads technology education courses and offers a shared workspace environment. Brian talked with Tom Martin about the startup atmosphere in Lexington and what's trending.

Tom Martin: How do today's economic conditions for entrepreneurs compare with what you found when you opened for business in 2009?

Brian Raney: There is significantly more startup activity. Investors are starting to be much more active and there are service providers and mentors that are starting to get engaged in the startup community. We've taken a long-term approach at Awesome Inc. It's not an overnight thing. But over the last five years, Lexington has made good progress.

Martin: It wasn't too long ago when five years seemed like a long time. Now it's a blink, isn't it?

Raney: It sure is. It's gone by very quickly and we've definitely gotten our hands into a lot of things in the last five years — a lot of things that we probably should have said no to. Some have worked out for us and some have been giant failures. That's another thing that I've noticed over the last five years in Lexington: the tolerance in the investment community for failure and risk has increased a lot, and the entrepreneurs themselves are more willing to take on risks.

Martin: How would you describe the investment scene?

Raney: There's been a lot of activity in the investment community over the past few years. The Bluegrass Angels might look at deals that are in the $500,000 to $2 million range. But a lot of companies, when they're just getting started, don't need that much money. They might need $10,000 or $50,000. So, we've launched the Cherub Fund, which has engaged about 30 investors, and these investors all put in a very, very small amount of money. The idea is to invest small amounts of money, but do it very quickly and do it very often just to create a lot of activity. Everyone involved in the fund realizes that it's a donation to support the community more than to get a return. And if one of these companies does take off, then we do have equity.

Martin: Are some companies beginning to move on to higher levels of investment?

Raney: Actually, a few of the companies that the Cherub Fund invested in in year one have already gone on to receive some additional funding from some of the larger angel groups. One, for example, is called "Complete Set." They just raised around $650,000 from a wide array of different investors across the state.

The second company is called "Custom College Recruiting." They help athletes that are looking to go to smaller schools than Division 1 schools find sports scholarships. They raised somewhere between $250,000 and $500,000 in the last year. This is also a company that got its start with just a very small amount of seed money from the Cherub Fund and some other investors locally.

Martin: What do you see as trending in Lexington?

Raney: Lexington is slowly becoming kind of a hotspot for video game development. Groups like RunJumpDev meet out of Awesome Inc. two nights a week and they work on video games and teach video game development. There are a few companies here in Lexington that are doing quite well for themselves: Super Soul with John Meister; Gun Media with Wes Keltner and Frogdice with Michael Hartman, as well as a few others that are really starting to make their mark nationally in the video game industry. That's been really fun to watch.

Another trend I would mention is health and fitness in the sports category. There are starting to be some interesting startups that are coming out of that space, as well. "You Saw Me" is one. They've got the light-up vest for runners and bikers and other outdoor athletes. They've got a patent on that technology and they're starting to increase their sales and revenues.

There's a sports drink called "Sword" that's launched out of Lexington as a competitor to Gatorade and Powerade. They've started to pick up a lot of high schools and other sports teams. So they've got some good traction, as well.

Martin: Awesome Inc. recently received a $50,000 grant from the state Cabinet for Economic Development. How are you going to use that?

Raney: That grant has been allocated to a program called the Awesome Fellowship Program, our flagship entrepreneurship program. We'll take eight teams into the program in 2015 and those teams will receive many resources throughout the year: access to our mentor; free office space; access to technical talents. We have an on-staff designer, an on-staff developer and an on-staff videographer that can help them with promotional materials or development design. They will have access to legal resources, as well as some discounted accounting services. I would encourage any startup that is ready to take their idea seriously to apply to this program. It doesn't cost the teams anything and we also don't take any equity. It's sincerely designed to help build these eight companies and to help them succeed.

Martin: When Awesome Inc. opened its doors the idea of a shared workspace was somewhat novel for Lexington. Now there are a number of them. You have been doing this for about five years. How has it evolved? What sorts of ground rules have you found that you need to have when you have different individuals working in an open space?

Raney: We've definitely evolved quite a bit over the past few years. One of the major advantages is the collaboration. There might be somebody working on a Web company and then there might be somebody else doing some online marketing and those two individuals can work together and learn a lot from each other and sometimes share clients and other resources. So, there's a lot of value in that.

It's a more professional version of working out of your garage or working out of a coffee shop. If you need to have meetings with clients or if you just want to have a little bit more of a professional space, it's a very affordable option. Our desks run $250 a month and that includes all your internet, all your utilities, and you've got a Main Street mailing address.

Martin: What's on the horizon for Awesome Inc.?

Raney: One of the things that we've really begun to focus on is our coding school. From working with a lot of startups, we've seen that there is a true lack of technical talent in the area: not a lot of software developers, not a lot of designers. And it's not just Lexington that's having this problem, it's a national problem. There are currently about 150,000 programming jobs open and waiting to be filled in the U.S. That number will be a million by the year 2020 unless something changes. This is in an economy where even with a college degree it may be tough to get a job, but not if you know how to program a computer. My software company is always looking for the next iPhone developer or the Android developer, Web developer and I get calls from other companies throughout the state and throughout the country that are looking for similar skill-sets.

So we decided last year to launch a coding school called Awesome Inc. U where we teach all different ages — primarily middle school and high school kids, but we have some college and post-college students as well. In the last year we've taught five hundred students to code. We've also taught another couple of thousand by going into schools where we introduced them to programming.

We recently launched an initiative called the Awesome Inc. Academy where we will take approximately 10 to 20 students per semester and they'll get a very, very deep dive into programming concepts, as well as working on their own projects.

We just finished our first semester in the fall and it was really cool to see some of the projects that these kids were working on: seventh graders building iPhone apps, sixth graders making websites with e-Commerce built into them and some video games that are being developed by high schoolers.

It's a lot of fun to see how quickly these students can pick up this new skill and it's also very encouraging because there are a lot of opportunities in that space and if Lexington can train and have a vast amount of that technical talent available, then that's only going to benefit our economy.

So, I'd say that's probably going to take up a lot of our bandwidth over the next two or three years.