Startup America Partnership

On Monday I was at the White House to help announce the Startup America Partnership. As part of this, TechStars announced the TechStars Network, an affiliation of TechStars-like programs across the country along with our commitment to the Startup America Partnership to help 5000 experienced mentors work with 6000 entrepreneurs to create 25,000 new jobs by 2015. For an awesome description of Startup America, please read Aneesh Chopra’s (the United States CTO) post on TechCrunch titled Startup America: A Campaign To Celebrate, Inspire And Accelerate Entrepreneurship. By the way, I think it is awesomely cool that the CTO of the United States blogs on TechCrunch!

Over the past eighteen months I’ve gotten to know a number of people in the executive brand of our government, especially at the Office of Science and Technology Policy and the National Economic Council. In general, I don’t engage that much with government, but I have with issues that I care deeply about like the Startup Visa and entrepreneurship. In this case I’ve been blown away by the intelligence, thoughtfulness, tirelessness, and capability of folks in OSTP and the NEC. When I was first involved in discussions around entrepreneurship that later evolved into the Startup America Partnership, I was originally skeptical about what I was hearing. Nine months, and a bunch of discussions later, I think the White House has approached Startup America in a very smart and powerful way and I believe that everyone involved has a major clue about entrepreneurship, the importance of it to our economy and our country in general, and how to help celebrate, inspire, and accelerate entrepreneurship across America.

When I was first approached to talk about how the White House could help entrepreneurs, I focused most of my comments on trying to help the folks I talked to understand the difference between high growth entrepreneurs and small business people. They are both important to our economy, but have very different needs and until recently I didn’t feel like the White House, or other branches of government, really understood the difference between the two.

Fortunately, the White House listened to a number of smart people, including the amazing folks at the Kauffman Foundation. I worked closely with the Kauffman Foundation in the mid-to-late 1990’s both through their partnership with the Young Entrepreneurs Organization as well as being an “entrepreneur-in-residence” (a fancy word for “one day a month consultant”) where I worked with a team on better understanding high growth entrepreneurs. I continued to spend time with the Kauffman Foundation over the past decade, but lost touch with many of the people I’d worked with as the organization evolved. In the past few years, under the leadership of Carl Schramm, the Kauffman Foundation has reasserted itself as the most significant organization thinking about, researching, and advocating for entrepreneurship as part of its mission to accelerate entrepreneurship in America. I’ve gotten to see them in action first hand through work that I’ve done with Lesa Mitchell, Paul Kedrosky, and Bo Fishback and I can confidently say that Mr. K’s legacy is in great hands.

Along with Kauffman, Steve Case, the co-founder of AOL, his wife Jean and the Case Foundation, has been working hard to help the White House craft a public / private partnership to shine a bright light on entrepreneurship and help accelerate it across the country. I’ve never worked closely with Steve but have always admired him from afar and love the leadership team of Steve and Carl heading up the Startup America Partnership.

As David Cohen and I talked about the idea for the TechStars Network over the past few quarters, it became obvious to us that it would be a natural part of the Startup America Partnership as we both strongly believe that mentorship is a core attribute of growing entrepreneurs and entrepreneurship. We both believe that TechStars like programs can existing in over 100 cities in the US, covering many different industry segments (not just software and Internet), and the value of coordinating the mentor, entrepreneur, and investor activity across the entire country is extremely powerful. We had already identified over 100 different accelerator programs in the US that were modeled after TechStars and had helped a number them get started, so as we put together the original members of the TechStars Network, we were psyched that 16 high quality accelerator programs joined us at launch.

It’s important to realize that each of the TechStars Network member programs will be locally owned and operated. We strongly believe in the power of a network model in the construct of expanding entrepreneurship, not a hierarchical centrally owned and controlled one. We think entrepreneurship across the US is not a zero-sum game and we want to play our part in expanding it. TechStars will still run programs that it owns and operates in Boulder, New York, Boston, and Seattle, but we’ll continue to aggressively expand the overall network across the US as well as the world.

I’m extremely excited to play my small part in the Startup America Partnership. For those of you out there questioning how government and entrepreneurs intersect, I encourage you to give the Startup America Partnership a chance. Start by looking at the 27 private organization commitments to the partnership. And, if you want to engage in any way, just email me and I’ll try to figure out how to get you plugged in.

  • Chris Schultz

    Brad, thanks for all your work on Startup America. We are proud to be a part of it through Launch Pad Ignition. I appreciate you initiating that email with David Cohen and Don Hazell about the guys doing stuff down in New Orleans last fall. We’re excited to be part of the TechStars Network and the entrepreneurship initiative in this country. Thanks for your leadership.

    • http://www.feld.com bfeld

      Psyched to have you and I’m looking forward to a visit to Launch Pad Ignition!

  • http://www.artificialignorance.net anandiyer

    +1 – I’ve been a “lifelong” fan of TechStars and StartupVisa. Plug me in, Brad.

    • http://www.feld.com bfeld

      Awesome Anand – look for some neat opportunities coming.

  • http://twitter.com/sardire Steve Ardire

    >I’m extremely excited to play my small part in the Startup America Partnership

    Hi Brad – I had to chuckle on this comment because of all the sponsors listed here http://www.startupamericapartnership.org/commitments Techstars and perhaps New Market Venture partners are the only ones true to being startup accelerators.

    Nonetheless well done ;)

    • http://www.feld.com bfeld

      Actually, it’s much more than just startup accelerators. Programs like
      the Deshpande Foundation and the Blackstone Foundation LaunchPads are
      awesome programs. I’m familiar with almost all of the specific
      commitments – they are all substantive.

  • http://blog.sixstringcpa.com/ Geoffrey, the SIX STRING cpa™

    Mr. Feld,
    I appreciate your post. While my initial reaction to Startup America overall is positive, there are components that raised some cynicism and skepticism. My initial concern is/was the potential for too much concentration in the hands of a few select mentors/investors/leaders and the potential result might end up being a skewed focus on certain industries (software & internet). So, while I realize you are not the entire embodiment of Startup America, I appreciate getting a glimpse into the minds of one of the leaders of Startup America (you) via your post comment “We both believe that TechStars like programs can existing in over 100 cities in the US, covering many different industry segments (not just software and Internet),…” I happen to be a passionate person about small business and entrepreneurship, I would very much like to see this effort go beyond just internet & software (I love them both but there is more to the economic engine then just these two).

    A passing thought, while I completely understand the focus on high growth companies as an engine for job creation, I hope the leadership team of Startup America uses this opportunity to focus on LASTING job creation. From my, albeit limited experience, high growth companies can rise and fall quickly. It is part of the natural cycle. As a result, the engineer at today’s growth company may experience a job loss (failed enterprise) and be back at another engineering job at a high growth company the following year – no net job growth necessarily (I realize this is a BIG oversimplification). Lasting job growth is what I hope we are shooting for with Startup America, and all our economic policies. At least as long lasting as the natural course of capitalism allows an enterprise to remain a viable concern.

    You mention both Kauffman Foundation and Paul Kedrosky in your post. Here are some comments and quotes by Robert E. Litan of the Kauffman Foundation related to a Kauffman Study developed by Dane Stangler and Paul Kedrosky.

    “Consistency of firm formation from year to year still means that hundreds of thousands of Americans are poised to become entrepreneurs at any given time. Policies and economic conditions will affect this number at the margins, but the most important thing we as a nation can do to encourage entrepreneurship is to provide a hospitable environment that helps more startups become fast-growing, job-creating companies.” So, if I boil this down, to me it basically says, culture needs to be created not necessarily policy because policy may only impact at the margin. I am all for creating a culture. And hence my initial worry about only a few being able to imprint what it means to be a part of Startup America. A culture cannot be created by a few; it must be fostered by many, in my opinion anyway.

    This same research study also indicates “that entrepreneurship education and venture capital, two indicators that have received heightened attention in recent years, had no appreciable impact on entrepreneurial activity in the United States.” In concluding comments on the research study Mr. Litan finishes by saying “but we should enact policies, provide education and make available capital and technologies that will enhance the possibility of success for every new company.” My hope is that the “every new company” portion of this comment does not get lost.

    Finally, if you have any influence I wonder if you could have someone clarify the role SCORE might play in Startup America, if any. It has an existing infrastructure in place and I am curious how it is going to be utilized. Again, thanks for sharing some of your thoughts. I personally am happy to see at least one of the mover & shakers of Startup America state that it is not just about internet & software (again, BIG LOVE to the techies – no hate here just want as broad a focus as possible).

    A link to the research report and summary comments about same can be found here:

    http://goo.gl/swM4W

    • http://www.feld.com bfeld

      Awesome comments. I’m in a car on my iPhone so I’ll give you a longer
      response that addresses each point later.

      And no, I’m not driving – I’m the passenger!

      • http://blog.sixstringcpa.com/ Geoffrey, the SIX STRING cpa™

        Great …. texting while driving is bad …. mmmkay.

        • http://intheme.wordpress.com/ Roland Haddad

          Used to be bad with texting only…now it’s worse with texting, surfing, chatting, youtubing, tweeting,…

    • http://www.feld.com bfeld

      1. “I would very much like to see this effort go beyond just internet
      & software (I love them both but there is more to the economic engine
      then just these two).” I completely agree. I’m a software/Internet guy
      so that’s where I can help, but the TechStars Network will have
      accelerators in other fields and I expect there will be a number of
      Startup Network Partnership partners that will have deep domain
      expertise and interest in fields other than startup / Internet. If you
      look at the folks already committed to the partnership
      (www.startupamericapartnership.org/commitments) you’ll see some.

      2. Lasting job growth. Absolutely. In fact, the cycle is a well
      understood one. Many high growth companies fail at relatively early
      ages (20 to 100 employees). But the ones that get past 100 employees
      tend to continue to accelerate and create long term permanent job
      growth, even if they end up getting acquired by other companies. And,
      many of the entrepreneurs and employees of the failed companies simply
      start or join other high growth companies, giving the cycle another
      chance. The cumulative impact of this is a strong net positive job
      growth number over a long period of time.

      3. Startup America is intended to be as inclusive as possible. There
      are all ready lots of different people and organizations involved.
      There is no barrier to many more being involved and I believe the
      White House and OSTP understand clearly the need for a diverse
      perspective, frame of reference, and involvement.

      4. “Every new company” – the more people that engage, the greater the
      change of there being real support and opportunity for any
      entrepreneur.

      5. SCORE – so far, I don’t think SCORE has engaged, but I’ll check.
      It’s a good idea.

      • http://blog.sixstringcpa.com/ Geoffrey, the SIX STRING cpa™

        Mr. Feld,
        I appreciate you taking the time to respond to my post. I understand and appreciate how busy your schedule is and want to say thanks for engaging. I look forward finding ways to follow along and support this initiative where I can and look forward to learning more as time passes.

      • Pat

        @Brad,

        I would echo that SCORE ( http://www.score.org ) must be involved. SCORE has a focus on SMB that are NOT VC-fundable. In particular, they teach how to create a business plan in order to get a bank loan, how to get an SBA grant, how to run a franchise, and other basics for non-tech, non-high growth companies.

        You should also check out http://www.e-myth.com/ . They have a product to sell but they have a free book that will open your eyes. Most business owners are not entrepreneurs but rather people with a hobby and a store front. In their first book, they use “Sue”, as character in the story. “Sue” loves to bake cakes and is convinced to open a bakery. What “Sue” quickly discovers is that running a bakery involves way more than just baking. It involves taxes, employees, people who order but don’t pick up, unreliable suppliers, cleaning ovens, getting up at 6am every day, marketing, etc.

        You should really read it to understand the mind of a small business owner. They need the basic grounding in accounting, local marketing ( not internet marketing ), networking, location selection, etc.

        Talk to the Subway corporate people involved in Subway francheeing. Subway has the most franchisees in the US. Subway also has a good bottom-up communication mechanism. The $5 meal deal was a franchisee innovation that Subway corporate picked up and spread through out the chain.

        Other ideas include standardize mechanisms to do partnership, sole prop., C/S corp registrations for all 50 states. A federal level starting point that can gather the needed information and help the person with starting their business in any state is a good idea.

  • http://www.professionalyou.com Eric Brooke

    Hey Brad,
    I don’t know if you have every read ‘The next 100 years’ by George Friedman pg 133-134.. In his book he talks about that at some point America will have to start creating incentives to get bright people to move to the US to maintain the number of highly skilled people it needs to stay competitive. Of course the US will not be only country to do this.

    http://tinyurl.com/5wzywvh

    I am a Brit who moved to Vancouver, BC, Canada because I wanted to start up a new tech company to reinvent the resume. I wanted to get out of a risk adverse culture to one that celebrates risk. Moving to the US was way too difficult, but Canada was possible, within 6 months I was here and a year later I founded my startup.

    Learning from ’your’ example there is a campaign group in BC, Canada now leading the charge to do the same in Canada. Already the US has competition to modernise the startup visa. If the good old US cannot get this done, its very likely that Canada will pick up the slack and the entrepreneurs ;-)

    http://startupvisa.ca/blog

    • http://www.feld.com bfeld

      Yup – I know the folks behind the Canadian Version of the Startup Visa
      and I’m glad Danny and crew are putting pressure on the US to show
      that even though we can’t drink as much beer as Canadians can or
      consistently beat them in hockey, we can eventually pass logical
      immigration legislation to help entrepreneurship!

  • http://www.SiliconPrairieNews.com/ Jeff Slobotski

    Brad – great job on Monday and excited to see where things go over the next several months, as well as years.

    We’re committed here in the greater Omaha, Des Moines and Kansas City region to get involved and play a role in changing and developing the landscape over the long term, so count us in!

    Keep up the great work!

    • http://blog.sixstringcpa.com/ Geoffrey, the SIX STRING cpa™

      Jeff, I am just getting back into the start-up & entrepreneurship landscape. My efforts are limited but focused at the moment. I am in your target area mentioned above. I believe we have untold riches in our area that need more water & fertilizer to grow. We can talk more offline.

  • http://twitter.com/billmcneely Bill McNeely

    I think what you and your colleagues are doing at Startup America is a great thing but seems to be focused on younger, college educated, tech focused individual.

    I would like to see you reach out to recently separated veterans who have the capability to start a growth business.

    I think Steve Blank (Air Force Vet) has done a pretty good job in the Valley.

    Thank you for responding to my tweets requesting startup info in the past.

    • http://www.feld.com bfeld

      Our goal is to cover many industries and all ages. I said that
      specifically during my comments. I’m a software / Internet guy so
      that’s the industry I know, but the TechStars Network won’t be limited
      to just software / Internet and I expect you’ll see plenty of things
      in other areas soon. And, I’m a huge believer in “no-age-barriers” for
      entrepreneurs so I support your view there and will make sure I put
      energy into it.

  • http://twitter.com/jad714 Joshua Davis
  • Joe

    Hi Brad – as always, interesting post. I’m a medical student in NYC (at Columbia), with a background in tech prior to med school (Stanford, then 2 startups). I’m in my final year of med school and my major frustration/observation since entering healthcare & academic research is that there are many people who have great ideas and might make talented entrepreneurs (fellow med students, attending physicians, researchers), but they rarely take that next step of branching out of their focused track to start a business – almost certainly at a much lower rate then in most other fields. I think this is due but a combination of lack of mentors/training/resources to take this “non-traditional path” combined with many years of training to be a good, risk averse clinicians or researchers too focused on “getting that next grant”.

    All that said, as I move on to residency, I am looking to do something about all of this with some fellow Columbia med students, who have similar interests & backgrounds. We have considered a number of ways to create an environment in the NYC healthcare community to accelerate R&D commercialization/entrepreneurship and met with many NYC stakeholders about our ideas. Who would we contact at Startup America to tap into its expertise, entrepreneurs, and partners as we move forward.

    Thanks,
    Joseph

    • http://www.feld.com bfeld

      Joe – I dont know but send me an email (brad@Feld.com) with your full
      contact info and I’ll use that to try to figure out something
      relevant.

    • http://twitter.com/billmcneely Bill McNeely

      Check in with Ben Walker at Tech Wildcatters in Dallas. He started a firm,sold it and then attended medical school. He is on a 1 year break and maybe able to assist you.

      • Joe

        Bill, thanks for the tip. I will definitely get in touch. Joe

  • Elliott

    A simple question – is any government money going to TechStars ? Will TechStars receive either money directly or with co-investing by the US government ?

    • http://www.feld.com bfeld

      No.

  • M2

    Just one thought to share, regarding the $2 billion in SAP matching funds for VC firms in (1) underserved geographies and (2) those focused on early-stage companies. I was dismayed when I learned that it would be allocated via the Small Business Administration’s SBIC program.

    I would strongly suggest that SAP seek alternate ways to allocate capital. SBIC is way too bureaucratic, way too cumbersome for the fund manager, and ultimately will limit the utility of the $2B. Not to mention the fact that it will take 1-2 years before entrepreneurs see any of that $$$.

    See more info in private email. Thanks for your leadership, and stay warm out there!

    • http://www.feld.com bfeld

      Mike – I’ve passed on your thoughts and concerns about this, which I share.

    • http://blog.sixstringcpa.com/ Geoffrey, the SIX STRING cpa™

      I have similar concerns that I raised on a reply I made on a GigaOM article on Startup America. Thanks for shouting this out too.

      • http://www.feld.com bfeld

        I just communicated this concern with Sean Green which is an
        ex-entrepreneur now one of the senior SBA folks. He understands the
        concern, has been working hard to address it, and just set up a call
        with me to talk more about it next week.

  • Wayne Cluff

    Brad, here at http://www.enterprisesolutions.net we have a charter to mentor, partner, JV, etc with other young (and in many cases minoritiy owned) businesses. 90%+ of our current book of business is providing IT and management services to the goverment, and most of that is federal agencies. Happy to help anyone who needs resources to advance serving the government. As many of you all know, there is significant mandate (and political presssure) to advance small businesses. The hardest part for the startup is proof of past performance- you have to partner in my opinion. In fact, ESI has found that its growth and survival is interdependant on mentoring other startups. To that end, having some form of legislative affairs relationship, and a strong proposal response team, is critical.

    Best, Wayne

  • Wayneathomas

    Putting the matching funds in the hands of the SBA assures the failure of the Program.
    The motives are noble and there is no question that the only way we are going to create jobs is with Start-Ups

    But the 2 billion or more needs to be a tax credit for Accredited Investors. They will move quickley, they have the risk, no red tape. $100,000 credit for every new job the Start up will create in the first 12 months. This is a bargain compared to the cost of jobs in the Stimulus.
    Get Government bureaucracy out of the way and let free enterprise fix this mess

  • http://twitter.com/timflint Tim Flint

    This is an amazing opportunity. It is great to see a network like this evolve and for the government to be spending their time on true long term job creation. I wonder if the matching funds might be a bad thing. How often in venture backed companies is undercapitalization the hard problem? I could see this as funding more companies, but giving companies too much money could be a problem.

  • Pat

    Since apparently I “hate” tech entrepreneurs, I will let Steve Blank say it for me ( http://steveblank.com/2011/02/08/startup-america-dead-on-arrival/ ) :

    “I hope it succeeds. But I predict despite all of Washingtons’ good intentions, it’s dead on arrival.”

    “There are three problems. First, an entrepreneurship initiative needs to be an integral part of both a coherent economic policy and a national innovation policy – one that creates jobs for Main Street versus Wall Street. It should address not only the creation of new jobs, but also the continued hemorrhaging of jobs and entire strategic industries offshore.

    Second, trying to create Startup America without understanding and articulating the distinctions among the four types of entrepreneurship (described later) means we have no roadmap of where to place the bets on job growth, innovation, legislation and incentives.

    Third, the notion of a public/private partnership without giving entrepreneurs a seat at the policy table inside the White House is like telling the passengers they can fly the plane from their seats. It has zero authority, budget or influence. It’s the national cheerleader for startups.”

    As steve points out, SMB (hair salons an the like), you know those “lifestyle” businesses, constitute 99% of the entrepreneurial business activity.

    • Pat

      (P.S. I don’t “hate” tech nor the tech startup community — but VC fundable businesses are in their own little bubble and don’t understand that the rest of the world is not at all like them.

      A program geared to only VC fundable businesses is a waste. A better idea is expanding http://www.score.org/ )

  • Jake

    Hi Brad (met you in Durham), I hope this is the push that SBA needs to move beyond loan-based programs. I work every day with potentially high growth ventures that are an important source of jobs – and none of them can access SBA funding. When our angel group funds these companies with personal funds, we are at one and the same time making an investment that may benefit us financially – AND we are also accomplishing a public purpose: namely, that innovative, entrepreneurial firms get launched and nourished at the point of greatest risk during start-up. The concept of deploying public funds to match our private investments is outstanding – the challenge will be to come up with an implementation mechanism. Skipping the SBA and working directly with the nation’s organized angel investor organizations might be a workable alternative. Jake Halliday, Missouri Innovation Center and Centennial Investors. (If I can help in any way, let me know.)