How to “Startup America”
— Daniel Isenberg is Professor of Management Practice at Babson Global and founding executive director of the Babson Entrepreneurship Ecosystem Project. Dr. Isenberg has been an entrepreneur, venture capitalist, consultant, and educator, having taught at Harvard, Columbia, Technion, INSEAD, and Reykjavik. —
The White House recently convened an unprecedented consortium of public and private entities to announce the launch of Startup America. The purpose was to galvanize a coordinated effort to define and implement President Obama’s vision and strategy to foster entrepreneurship and provide more push to the United States’ economic development.
Startup America has a lot going for it: a broad group of influential entrepreneurship stakeholders, real entrepreneurs at the heart of the dialogue, a sincerely committed president and an independent convening S.W.A.T. team who are making entrepreneurship a top priority and a powerful, well-connected, smart board with a smart-looking interim CEO. In my book, Startup America has gotten the basics right; I don’t take this lightly – my observations of more than two dozen countries is that very few have done even this.
But like most entrepreneurial ventures driven by ambition and a strong sense of purpose, this one has a very long way to go. As plan and reality diverge, like most startups, Startup America will need to revise its business model, change or enhance its leadership, and deal with disappointments, and an ever-changing landscape.
So the launch on January 31, 2011 was just the opening shot: to turn this initiative into real results, a lot more has to happen. Here are a few suggestions:
- Be crystal clear about Startup America’s objectives. For every 100,000 or so residents, each major city (or region) should be generating annually, one new high-aspiration venture with at least one real, paying customer. This measurable goal will focus attention and galvanize stakeholders into action.
- Translate Startup America into hyper-local activities. Cities and counties should become the foci of intense activity, not the nation. Entrepreneurship is hyper-local in that all “species” of entrepreneurs gather around extremely small “watering holes” to draw from the resources (people, ideas, capital, customers) they need to start up and grow. One size does not fit all, so you need to help each locale cultivate the entrepreneurial culture that best fits it.
- Infuse Startup America with a global perspective. Entrepreneurs don’t need to help America “beat” China or Brazil; they need to partner with Chinese and Brazilian entrepreneurs to sell to customers everywhere. To be more global, we must also encourage entrepreneur immigrants; the Startup Visa proposal is only a drop in the bucket.
- Publish a “sell-by” date for Startup America. I propose December 31, 2015, which gives us almost five years for measurable results. A sell-by date will force the Startup America team to focus on achieving self-sustaining results. Success breeds success, and a powerful way of knowing if a program is successful, is to remove the props and see if it stands on its own.
- Encourage financial innovation. We need innovative financing models for the startup sector, because debt or equity providers support just a tiny, select minority. We must help innovative entrepreneurs develop profitable financing mechanisms targeted to a much broader base of deserving startups.
- Have a map of the entrepreneurship ecosystem. Without a map, we won’t know if we are headed in the right direction. Here is a simple version of an entrepreneurship ecosystem map with 13 elements, all of which must eventually exist for Startup America to achieve its goals. Encourage and empower each of the hyper-local initiatives to cultivate all 13 elements of their own entrepreneurship ecosystem, in ways that are unique to them.
These principles, and others, will help translate the great intention of the entrepreneurship stakeholders you have brought together, and to drive the Startup America to actually achieve concrete results.