This guest post is the first in a series by Kauffman Foundation grantees and other partners sharing insights on entrepreneurship diversity and inclusion. These timely topics will be discussed at this year’s Mayors Conference on Entrepreneurship, Dec. 1-2, in St. Petersburg, Florida.
There has been a lot of pressure in recent years for cities to emulate Silicon Valley. If you Google “the next Silicon Valley,” you will find hundreds of articles listing different cities as the next Silicon beach, desert, forest, etc.
Being the mayor of a city is like being the CEO of a startup in a constant cycle of iteration, failure and success. Just like business leaders, mayors have to look at market trends and high impact opportunities while adapting to constant change, stakeholder pressures and unexpected crisis.
Yet, any good startup CEO knows that the only way to ensure long-term success is to align unique assets with market demand. How does that philosophy convert when you are the mayor of a city that aspires to become the next Silicon Valley?
Stop trying to become the next Silicon Valley. While Alicia Keys may be the driving voice behind the “do you” mantra these days, there is truth in owning what is uniquely yours. Silicon Valley has a corner on the capital market, but money alone does not build strong companies. A strong business model is key, and more cities should be helping entrepreneurs to find gaps and see them as opportunities. Phoenix has a compelling case to make to solar innovators just as Sacramento does for sustainable agriculture. Attracting and retaining brilliant minds to solve problems with assets that are unique to a region should be a focus for all civic leaders.
In 2015, 40 percent of new entrepreneurs were African American, Latino, Asian or non-white, and 36 percent were women. With an aging population, 25 percent of new entrepreneurs last year were individuals aged 55-64. When did you last read about the 60-year-old African American woman who raised a series A? Right.
Last year, companies with at least one female founder received a mere 10 percent of venture capital funding. Many startup competitions, angel network pitch nights and big wins in the local newspaper do not reflect these growing demographics. At SEED SPOT, we have launched several women-only programs, partnered with the International Rescue committee to serve refugee entrepreneurs, and launched “Véndeme tu Sueño” in partnership with Univision to serve more Latino entrepreneurs. Each emerging population is a huge asset for the entrepreneurial ecosystem.
Many cities compete for the relocation of Fortune 500 companies while simultaneously ignoring the small startup that has knocked on the door for support. Stop slamming the door. Big companies start small. Small companies grow big. All companies matter. Whether an idea is on the back of a napkin or generating revenue at scale, companies in the product, service and technology sector need support to better understand their customer, ensure product-market fit and scale a viable revenue model. Incubators and accelerators have played a critical role in providing such education, but more work can be done to democratize the education and training that early-stage entrepreneurs receive at all stages of growth.
The world does not need another frivolous iPhone app. The world needs more entrepreneurs solving real problems. Operating in the startup ecosystem under the social entrepreneurship banner often incites comments of being “soft”, “naïve” or “cute” for valuing the solution to a problem equal to financial returns. It seems to me that solving the problem of how to feed 7.5 billion people and make a financial return with an agricultural technology is a hell of a lot harder, more sophisticated and badass than a face-swapping app. For social entrepreneurs, it is not about an exit or liquidity event, it is about solving a problem in the world. Elevating the stature of social entrepreneurs who are tackling real problems with market driven solutions is what every city should aspire to build density around.
There seems to be a general misperception that if you are an early-stage entrepreneur, it is grounds for people to take advantage of you. A community that maintains an inclusive approach to entrepreneurship must ensure that local attorneys coach entrepreneurs through legal terms; local bankers engage in fair deal-making; and seasoned startup executives help entrepreneurs negotiate fair term sheets for their next raise. At SEED SPOT, we have seen this model work by building a safe space for both entrepreneurs and community members to contribute to the rising tide of entrepreneurship in the nation’s fifth largest city.
Civic leaders empower entrepreneurs from all backgrounds at all stages to solve real problems in your community. Be brave and bold in your pursuit to build startup ecosystems that are inclusive of your city’s greatest assets, and diverse human capital to define a new era of what it means to be a truly great startup city.
Nothing new comes through doing the same thing. Stop trying to become the next Silicon Valley; own a new and better version of what’s possible.
Cedar Rapids Talks Diversity and Inclusion in Entrepreneurship at Mayor’s Summit
Chutes and Ladders: the Relationship between Entrepreneurship and Inequality
Courtney Klein is the cofounder and CEO of SEED SPOT, a globally ranked incubator that focuses exclusively on supporting entrepreneurs who are building solutions to social problems.