11 Aug Entrepreneurs Don’t Require…Venture capital, high-tech or government programs
RACINE — Developing entrepreneurial eco-systems — where the seeds of start-up and early stage ventures take root and bloom — does NOT require venture capital, high technologies, and new government programs. It can happen anywhere if three ingredients are brought together, a national expert on entrepreneurial development told an audience here last week.
Dr. Erik R. Pages’ presentation, “Building a Community Entrepreneurial Culture,” is one in the Sustainable Community Series sponsored by SC Johnson and the Center for Advanced Technology and Innovation (CATI).
The next presentation in the series, free and open to the public, is Thursday, Sept. 18, and features Joseph Pink, author of the book, Free Agent Nation, about the rapid increase in recent years of those working full time or part time as entrepreneurial “free agents.”
CATI was established two years ago to bring together private and public resources to help the development of new products, services, and businesses in southeast Wisconsin, focusing on technology transfer, workforce development, and entrepreneurism.
“And an entrepreneurial strategy for communities really can be cheap,” Dr. Erik R. Pages claimed in a presentation open to the public and sponsored by the Center for Advanced Technology and Innovation (CATI) and the SC Johnson Company.
“It can be done in Racine and throughout Wisconsin. Anywhere. And kids are ready,” he said, citing a survey of U.S. high school students that found 70% of them say they want to start their own business.
“But the strategy takes time, a whole business cycle. There are no silver bullets or shortcuts. I can tell you that from personal experience from my early days in economic development,” Pages explained, referring to his work economically depressed northeast Pennsylvania, as well as years of other work. “The only way is to grow your own.”
Pages said these ingredients are needed:
1) Networks and organizations where entrepreneurs can learn from each other and are no more than two phone calls from locating the expertise or help they need.
2) Openness and receptivity to, better yet encouragement of, new ideas and different ways of thinking. He titled this “diversity…but not in the simple, commonly known, affirmative-action sense of the word,” even though the metrics involve ethnicities and lifestyles. Instead, he said it has everything to do with “communities being open to…the natural innovativeness of entrepreneurs and outsiders.”
3) A business culture where local media cover entrepreneurial activities, where business people engage in “active mentoring,” where sons and daughters are encouraged to start ventures or work for start-up or early stage ventures, and where business failure is accepted as part of the overall process and is not so stigmatized as to discourage ventures.
“When these come together, it’s in the air. You just feel it,” Pages said.
Damning myths about high tech and VC
Pages, founder and head of EntreWorks Consulting, an economic and policy development firm focused on helping communities and organizations achieve their entrepreneurial potential, explained why usually perceived needs — venture capital, high technologies and government programs — are not requirements. He called the first two, about venture capital and high tech, “damning myths.”
Two-thirds of companies on INC. Magazine’s latest list of 500 fastest-growing companies were started with less than $50,000 and among the tens of thousands of start-ups each year, venture capitalists fund no more than 3,000 per year.
Entrepreneurs are innovators, but most also are low tech, citing Starbucks and Jiffy-Lube. “Coffee used to come 95 cents and it was fine. Starbucks has given us all kinds of choices and has convinced us to SPEND $3. We all can’t be Silicon Valley.”
Government programs come and go in two-year cycles, often are created and overseen by non-entrepreneurs, and aren’t nearly as important as two other things. Government officials should operate like entrepreneurs to save money and to “get out of the way” of ventures, such as de-regulating. Government officials also need “a new mindset…because most places are adrift. The big institutional players in communities are gone, bought out or declined,” Pages said, citing such entities as locally owned and community-minded banks, big corporations and cohesive, homogenous chambers of commerce. (“SC Johnson Co. here in Racine being a very rare exception,” he added.) These collapses of community anchors have created opportunities for new leaders to come from a much wider variety of sources and to collaborate in new ways.
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Tim Cowling is an independent consultant on growth and development to small businesses and other enterprises, with particular expertise in finance and communications. A former daily newspaper reporter and editor, small business owner, and investment broker, he also is a free-lance writer. He can be reached at EGSTim@Hotmail.com.