Startup America: The Good, The Bad, and The Missing-Part 3

April 29th, 2011 by hoha Leave a reply »

After a small dramatic pause we’ll conclude the Startup America: The Good, The Bad, and The Missing saga. Many people jump to the lack of a Startup Visa when asked what is missing from the Startup America initiative or simply point to this as a another government bailout for the VC firms (both which are interesting ideas that I’ll have to explore in another post). However, I think what is missing is that we’re fooling ourselves that we have the answer.

The Missing

When it comes to changing something I tend to view it through a framework I encountered in grad school and found in a book by one of my professors, Influence: The Power To Change Anything (amazon affiliate link).  A fundamental assumption in this line of reasoning is that changing results is largely driven by a few vital behaviors (also known as tricks, secrets, or hacks).

In order to get those vital behaviors you have to model them in a credible and powerful way (think Everett Rogers’ Diffusion of Innovation and the Heath Brothers’ Made To Stick). It is based off of Bandura’s Theory of Social Cognition which basically says people won’t change unless they can see that their chances of succeeding are pretty good and that it is worth it. Do they have the ability and the motivation to make the change?

The book or framework in the book indicates that for lasting change to occur these two questions have to be answered on multiple levels (Individual, Social, Environment / Structural). Most change initiatives fail because they either don’t know the right behaviors or only attempt to influence or answer this question on one or two levels. The Startup America initiative is no exception.

Do we know the vital behaviors that can be repeated in order to produce the results Startup America is trying to achieve (more jobs via more companies)? How do we know they’re the right ones? Well you identify the right ones by looking for positive deviance or circumstances where others are having success.

So everyone looks at Silicon Valley saying, “We’ll take one of those please.” They even try to give themselves a similar nickname like Silicon Forest, Silicon Slopes, Silicon Alley, Silicon Prairie, etc. While there are some behaviors and things we can learn from Silicon Valley but they may not be repeatable (a key criterion). So where else can we look? One that came to my attention recently was The Ciputra Quantum Leap: Making Indonesia an Entrepreneurial Nation while I was skimming Kauffman Thought Book 2011.

They started with education and then moved to partnerships and capital. So let’s pretend these are the vital behaviors: people that have an entrepreneurial education, supportive community, and investors. Okay, so how do we now get those vital behaviors?

The following list of questions is paraphrased from a worksheet used to assess change initiatives. I believe this can help us to understand what is missing from the Startup America initiative. For the sake of demonstration we’ll use learning how to create and start a business but the same could be done for the other vital behaviors.

When trying to convince yourself or others to change minds, do you create ways to experience the need to change (For example: field trips, pilots, trial runs, or other hands-on experiences) rather than simply trying to talk yourself or others into changing through presentations, lectures, pep talks, or other verbal means?

Do you use powerful and credible stories as a way of touching people’s hearts and minds with the need to change?

Personal Motivation

Do individual entrepreneurs take satisfaction from learning how to create startups or dislike failing?

When the going gets tough, does learning help with long-term goals and align with individual values?

Personal Ability

Do individual entrepreneurs have all the skills or knowledge to perform what is required?

Social Motivation

Are the people around entrepreneurs actively encouraging learning how to create a company or discouraging failure?

Are current entrepreneurs modeling how to learn or succeed in creating a startup in an effective way?

Social Ability

Does the entrepreneurial community or Startup America Partnership provide the help, information, and resources required, particularly at critical times?

Does the community hold entrepreneurs accountable for learning or successfully creating a startup?

Structural Motivation

Are there clear and meaningful rewards (such as with pay, bonuses, or financing) when entrepreneurs learn to create a successful startup?

Are short-term rewards in alignment with the desired long-term results and behaviors wanted?

Structural Ability

Are there aspects in the environment that make learning to start a successful startup convenient, easy, and safe?

Are there enough cues and reminders to help entrepreneurs stay on course?

 Startup America is trying to address mostly the ability side of things on the structural and social level though it is also having an impact on the social motivation. The structural motivation, however, is unclear and largely in the hands of other players in the world of capital. It requires its own diagnosis to determine how to change things in that eco-system.  Personal Ability is trying to be addressed through the use of mentor networks and programs like NFTE.  But where is the university level education (not to mention tech transfer reform)? Steve Blank at Stanford is experimenting with a Lean Launch Pad Class to provide an experiential classroom about how to build real companies. Other than a few other smattering of pilot programs university education is focused on writing a business plan.

Unfortunately, I think entrepreneurial education is lacking and doesn’t yet really know what or how to teach how to be a successful entrepreneur—especially a bootstrapping entrepreneur which makes up most of the businesses that are started each year. That is what I think is primarily missing—good education around how to create a startup without investors. These businesses are not just lifestyle or small businesses but are also high growth companies. In fact, the more successful you are as a bootstrapping entrepreneur the easier it is to get funding.

The Startup America Partnership is a step in the right direction but like most startups needs to pivot to better solve the customers’ problem. So like most sagas there is still room for some prequels.

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2 comments

  1. Gerard Peregrin says:

    Here are some ideas about the structure for a national entrepreneurial eco-system. http://bit.ly/h7iIEI

  2. hoha says:

    Thanks for sharing those slides, great ideas! It would be interesting to see the how the details would play out. Can you tell me more about the education and training programs? Would those who are unemployed be required to attend classes? If so, how would you decide who takes what? Or would it be more like an Amazon-Mechanical Truk/job board with a bunch of tasks that need done by the incubator companies?
    It does provide a way to track which startups would qualify for tax breaks-I just worry that they wouldn’t ever be able to stand on their own two feet-always relying on cheap labor. Thoughts?

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