No, we’re not talking about that. What we’re talking about is the tendency of old-school economic development to ignore companies (or even industries) that have been in existence for only a few years. Seriously.
To those unaccustomed to the ways of group serial Entrepreneur culture, it may seem implausible. Many old-school economic developers, then, buy wholeheartedly into this myth:
Startups (and, hence, Entrepreneurs) Haven’t Been in Business Long Enough to Prove Their Worth
The corollary, with economic development spin, is this:
New Companies in New Industries Create Good Buzz But No Economic Value
Here I’m going to share a personal example, having heard first-hand the excuses of old-school economic development as to why Entrepreneurs weren’t worth pursuing (well, beyond lip service since no one really ever says “we’re not going to pursue entrepreneurs” - got close in one instance, but that’s another story). Going back to comments alluded to in the previous myth - such as Entrepreneurs not providing “quick wins” or a “short timetable”, I’ve been saddened to see opportunities to attract rapid growth companies (and clusters of companies) to regions such as the one I live in, solely on the basis of not being able to generate a significant number of jobs in a 2-year window.
I thought I wasn’t hearing the criteria right at the time, especially since companies like Google didn’t exist five years ago but now have proven to be key recruits for other areas in our super-region, so I decided to test the resolve of not chasing Entrepreneurs by setting up meetings with key serial entrepreneurs and market makers in Silicon Valley, to showcase what we could look forward to if we set our minds to attracting some of these people to move to our area (yes, the key point here is proactive recruitment of key, proven individuals).
While the test yielded the same non-interest in pursuing a better understanding (and possible next-company recruitment), I was happy to note that all the companies chosen have turned out to be winners, with one of the companies recently being sold for $380 million, after only 32 months of operations. Try to fit that into a 2-year timetable! It’s like picking red or black on a roulette wheel in the dark and then arguing over who’s won. The game’s over long before the lights come (back) on.
So what’s a way to turn the myth into truth? Try this instead:
Entrepreneurs have an higher chance of creating a diversified job base (both in size and in new industries) than 99% of most large businesses.
Sometimes it takes doing real research - and even a bit of faith once the research is done - to see the trends that will grow a diversified region.
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