Scott Litman and Dan Mallin have launched and exited five companies. In this episode, we sat down with both of them to discuss the realities of building a business, from their role as founders to supporting the startup ecosystem through the Minnesota Cup to their jobs today as Strategic Growth Partners at Traction Capital.

More than 20 years ago, they launched the Minnesota Cup, the state’s preeminent startup competition. Today, the competition has delivered more than $6 million in direct support for the state’s startups, and participants have raised more than $1 billion in capital. Minnesota’s startup ecosystem has evolved a lot since they launched the competition, and they share their thoughts about what that has looked like on the ground.

They highlighted a number of great Minnesota companies, including past Minnesota Cup participants like Sezzle, 75F, When I Work, JonnyPops, Octin Health, and companies they work with at Traction Capital today including Scribe and Refr Sports.

How do you know when to exit? They offer a look at the challenges of scaling up a business and how they have worked to spot the next big digital trend on the horizon. We talked about the future of AI.

They’re both tech optimists, and have a great understanding of the technology after launching an AI company in 2016. Scott shares that while he’s hopeful for the future, he’s also apprehensive about how fast everything is evolving.

In this episode:

• 0:00 The Origins of the Minnesota Cup
• 4:23 How Minnesota Built Its Startup Ecosystem
• 10:00 The Minnesota Cup’s Impact on Entrepreneurs
• 17:23 Building an AI Company Before ChatGPT
• 19:43 Knowing When to Exit a Startup
• 23:00 Lessons From Five Entrepreneurial Ventures
• 29:00 Why Founders Should Work at Startups First
• 36:35 The Next Generation of Entrepreneurs
• 40:05 From Founders to Mentors: Traction Capital, EOS & Birthing of Giants
• 45:05 Refr Sports: A Minnesota Cup Success Story
• 50:10 How Scribe Uses Handwritten Notes to Drive Growth
• 52:22 The Fastest Way to Lose Your Job to AI
• 54:10 AI Governance, Job Disruption and the Future of Work
• 54:55 Jevons Paradox: Why Cheaper AI Could Create More Demand
• 56:32 How to Use AI Without Creating “AI Slop”
• 1:00:00 Why Companies Need Governed AI Tools
• 1:01:02 How Scott and Dan Became Business Partners
• 1:03:27 Is Business Ready for AI’s Impact?