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Is local entrepreneurialism in a recession?

I have always (ok at least more recently) tried to stay positive on my posts here to TechBoise. I try to not talk about all the layoffs and bankruptcies. I even try (really hard) and avoid criticizing local politics. It is in that light that I address this next issue. I truly hope this doesn't come across as negative towards anyone or any group but it is something that has me concerned, not as isolated events (which I hope is the case) but as a potential trend.
Many of you are familiar with the Kickstand speed dating event I've referenced here a few times. This has consistanly been a well attended event that has always received rave reviews. Last week Becky Gates, Kickstand board member, sent out the following email:
Dear Start-up Speed Dating Applicants,
Unfortunately, in order to put on Start-up Speed Dating this fall, we needed to have a minimum number of applicants to be beneficial for Kickstand, the companies and the judges. Unfortunately, we did not reach that number and will be canceling this round. We appreciate your interest and hope that you will resubmit your company information for the Spring, probably in April. So polish up your executive summaries and watch for a Kickstand announcement after the first of the year.
In and of itself this may not seem like a big deal but please keep in mind they were only looking for 10 companies.
YOU"RE TELLING ME THAT THERE AREN'T 10 BUSINESS PLANS FLOATING AROUND BOISE?????
Now there are several factors that are most likely at play here:
- Apparently there's this little financial slowdown happening right now.
- It is an election year, people were pretty distracted.
- Kickstand doesn't have the ability to reach everyone kicking around a new business idea.
- There are always far more people with ideas than there are with actual plans.
What has me scared.
We have more people on the market in Idaho now than we ever have before, in fact it's even higher at the moment in Boise than it is in the rest of the state, thanks to recent layoffs. It's hit us so quickly (although honestly it wasn't a surprise to many of us) that the Department of Labor has said there aren't enough jobs for everyone. (Side note to any outside companies looking to come to the valley - now's a great time to be expanding in Boise.)
Tech sector layoffs usually result in a spike in start-ups. This is my hope. As I've written before, I believe it's the best (if not only) hope for the area. The layoffs at HP, Micron and MPC are still fresh. Severance packages have yet to run out. Many may not yet have a clear plan of attack. I would like to reiterate to everyone: now is a great time to start a company!
At Highway 12 Ventures lately, we’re seeing more quality business opportunities than ever before in this region. The neighboring tech centers of Boulder, Salt Lake City and Portland are vibrant with exciting start-ups while Boise appears flat to down. Like Kickstand having to cancel it's speed dating event, our deal flow by itself is not an indicator to anything. Idaho entrepreneurs tend to bootstrap it longer than their regional counter part and probably the biggest factor is that we just don't have the critical mass the other regions do.
What still has me optimistic.
It is my sincere hope that the Kickstand event was just ill timed. Between the shock of recent layoffs, the overall economic climate and the presidential election, local entrepreneurs just haven't fully formed their ideas.
I hope that there are a few dozen (or more) people out there with the next great idea. With the abundance of well educated technically trained labor out there and a lack of immediate jobs I'm optimistic that many of you are contemplating starting your own gig.
In fact reports from SCORE, TechConnect, TECenter and even TECHelp are all seeing an uptick in early stage planning and ideation. This just hasn't translated into actionable plans...yet. If you have an idea I encourage you to start puting it on paper.
Even if you have an inkling of an idea, it's never too late to start getting feedback.
There are several of us that are willing to talk to you and help make connections. You don't need to have anything more than an idea. If you even think you may want to start a company please contact someone listed below:
- myself, tac@highway12ventures.com
- Rick Ritter at Idaho TechConnect, rick.ritter@idahotechconnect.com
- John Glerum at the Idaho TECenter or jglerum@boisestate.edu
- Kevin Learned at the Idaho Small Business Development Center KevinLearned@boisestate.edu
- Or anyone on Kickstand's board
Hopefully with a little help and time we'll start to see more of those ideas come to fruition.
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Recent comments
- Unreasonable
1 week 3 days ago - way to go!!!
2 weeks 8 hours ago - RE: is there another Kickstand Speed Dating planned
2 weeks 2 days ago - re: is there another kickstand speed dating planned
2 weeks 2 days ago - is there another kickstand speed dating planned
2 weeks 2 days ago - Great Question!
2 weeks 2 days ago - Is it an all day event?
2 weeks 2 days ago - I'm planning on bringing a
2 weeks 2 days ago - Grape iMac
2 weeks 3 days ago - RE: yes
2 weeks 3 days ago
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Comments
After reading this article &
After reading this article & another post by Jeremiah Owyang talking about the start-ups in Boulder, Colorado and how great & different they are than his S.Valley you have to wonder: where is the state of Idaho's role in our start-up success....or demise?
Let me start by saying I am not involved with nor do I know much about what the states role ACTUALLY is...I just listen a lot. What I gather is that if you are not a BIG company, *ahem*, you are not thought of as a viable resource for income here in Idaho and therefore not considered an important factor in the employment/development of the State as a thought leader.
I want to be proven wrong by my statements...I want our state to lead in the development of small tech companies that go into business (or have the thought) that nothing is impossible.
Colorado is expensive. California is expensive. Why can't we attract and/or keep world class thought leaders in tech in a community and state that has picket fences, kids riding bikes in front of your house a GREAT outdoor life & good-good people?
You tell me.
-jen
@jenharris09
This is NOT rocket science.
This is NOT rocket science. No amount of symposiums, tax credits, venture forums, relocation efforts, or funding mechanisms will hide the fact that there is far less innovation happening in Idaho than in other tech centers.
There is no disputing that everywhere that Tech has flourished has been around strong R&D, whether in research labs, universities, or corporate labs. R&D begets innovation, which begets patents, which begets investment, which begets tech start-ups.
Silicon Valley, Research Triangle, Boston, Seattle, Portland, Boulder, Pittsburgh, the list goes on and on. Look where technology has flourished and you can trace the roots to well funded R&D there.
Until we better fund our engineering schools with a program like the UStar program in Utah, we will continue to only see one-off successes.
What can you do? Talk to your legislator about the need to fund R&D in the state. At Highway 12, we're working on a white paper showing the ROI of a R&D dollar to present to the legislature. We need to work with and educate our legislature on the need to fund this critical component.
You identify numerous issues
You identify numerous issues there, Tac. As for the speed dating ill-timing has little to do with the failure of the event. This is now the second time that speed-dating has failed and in my mind the reason is quite clear: it's an exercise in futility. There is no early stage/angel funding to be had in this town, and everyone knows it. So why go through the motions?
Mark is dead on with his assessment of the macro economy here. The legislators labor under the impression that the Treasure Valley (and Idaho) is chock full of innovators and entrepreneurs - and nothing could be farther from the truth.
This is a government town, pure and simple. This started as a military town to protect the fur-trade routes. It morphed into a military town that protected mining interests and commerce - almost all of whom came from out of state.
The next big boon was federally sponsored reclamation projects, and irrigation projects financed by out of state bankers. There is a reason the New York Canal, which irrigates all of the Treasure Valley, is called the "New York Canal" - Boiseans wouldn't/couldn't finance it.
Our greatest entrepreneur - Jack Simplot - became wealthy for two reasons - 1) federal reclamation projects, and 2) WWII - he sold onions and potatoes to the Army.
We have all the seats of government here in Boise. Government is the largest employer and landowner by an overwhelming margin. Micron limps along on life support such as federal tariff protections, and BSU supplying workers.
All this is important because the "pat-ourselves-on-the-back-we're-such-great-entrepreneurs" myth sends the wrong signals to policy makers and economic development types. To whit: if we are already such great entrepreneurs, then there's no reason to develop any more capacity in that area. So we/they haven't.
The legislature deferred on College of Western Idaho - never seeing that it had any value. There still isn't an early stage venture fund here. The Governor disbanded STAC, and cut TechConnect by 2/3. BSU only gets 33% of its budget from the state. With 2.5% across the board cutbacks this year, money for research initiatives (R & D) isn't in the cards at the State House.
Instead, the legislature has tried tax cuts, worker training, "Albertson's Bills" and other incentives to lower the costs of doing business and NONE of that has worked to grow the economy? Why? Because the entrepreneurial culture that we tout doesn't really exist at the level we think it does.
Sure we have some great successes here, Keynetics comes instantly to mind (and Metageek, etc.). But even Keynetics is only 1/10th the size Trus Joist was. Where is the next Alberston's? MK? Boise Cascade? TJ? They haven't appeared and likely won't until we dispense with the notion that we don't need help with the entrepreneurial leg of the stool. Mark's white paper and a little simple history will hopefully get some much needed information to the decision makers at all levels of government so that they will finally realize that we absolutely must get away from incentives that reduce the cost of doing business and redirect that spending toward human capital - all the things that Mark Solon indicated.
Good points Mark. Something
Good points Mark. Something similar to USTAR could really jumpstart R and D and the transfer of that R and D to good companies.
I would also add that another key ingredient that seems to be missing in Boise is 2nd and 3rd generation success stories and exits that enable a large number of entrepreneurs to grow their concepts and companies with internal seed money before they look for angel or venture funding.
When you look at markets like SLC, Austin, or Boulder some of the most promising companies are started by serial entrepreneurs that are able to gain significant traction in many parts of their business before they seek outside funding. In the end I think that this is beneficial for both the company and their funding partners as the chance for ultimate success is better.
I believe even one exit or liquidity event in this market that created investible wealth for more than just a few people could have a tremendous impact on the not only the immediate entrepreneurial activity in this valley, but also the long term viability of our local tech sector.
Success will breed success.
First let me say I’m very
First let me say I’m very new to this form of community communication (its becoming very addicting) so please be patient with me.
I think Tac is right it’s a bit of what I would call the perfect storm (down turn economy, layoffs and overall negative/bad attitude media…which I think is more of the problem then the latter). I think we'll see people waking up from this “concussion†with great ideas and we just need to be ready for them. So I would ask other than the “speed dating†what is out there for resources….how do these entrepreneurs learn about what is available to them?...again new to this.
There are many fronts in this battle and the legislature is one of them however even with all the best information if we wait for our legislators to listen and do something it will be to late…it’s much like leaving the outcome of a championship game to the official and hoping the right call is made.
So while Highway 12 works the legislative front how can newcomers like myself and rest of us help make resources more visible to the entrepreneurs?
Chris Ubie
Perhaps the challenge is to
Perhaps the challenge is to define the innovation dividend (how much, when, what does it look like) in a way that speaks powerfully to the legislature.
Ron Price tells a great story about shopping for a car. Ron said the salesman came up to him when he was looking at a car and started listing its amenities - power locks, power window, great stereo, etc.
Ron then said, "The salesman never asked ME what I was looking for and how I defined a great car - perhaps I was looking for a car that only had a sun roof."
So far I think the legislature hears tech noise, but I would argue no one has pitched the innovation education argument in a way that moves people to action.
In fact, for Idaho as a whole, outside of roads (I could be wrong), no one has recently and successfully argued for increased investment in Idaho on a broad scale. Perhaps this is an absence of vision? No one has that powerful shared vision of what Idaho should look like and what the future dividend looks like?!?
Thanks Tac (and Jen) for starting this discussion!
Gee, you guys are starting to
Gee, you guys are starting to get a little angry (er...passionate?) about this theme...better be careful, Bishop Tac will ban you from his 'happy cult'.