Last week Dan Berger interviewed me for Boise Startup Week and asked a great question: why is a strong startup community important for the local region? I’ve been thinking about this question ever since. Startups, and startup community building, has been a passion of mine for decades. Of course startup communities are important, but I take it for granted.
Here are a few ideas as to why it’s important to have a strong startup community:
- Job creation. The majority of new jobs are created by companies less than five years old. Large companies are in the business of outsourcing and off-shoring jobs. Local regions need good jobs to be healthy, and most new jobs come from startups.
- Wage growth through exports. The only way to increase wages in a region is to increase the exports out of the region. Having more flower shops on the corner, and restaurants down the road, is great for quality of life, but doesn’t help grow the wages in an area. Startups, by their very nature as inventors of new technologies, serve national and global markets, thus exporting their solution outside the region.
- Wealth creation. Similar to wage growth through exports, another benefit is wealth creation, which benefits non-profits, the arts, and many other quality of life functions in a community.
- Desirability for young people. Startup founders are 42 years old, on average, but the average age of startup employees is much younger. Startups are cool and desirable for young people, and without them it makes it much harder to attract talent to the region. Vibrant cities need startups.
- Second order benefits. Startups support the local economy by renting office space, engaging service providers like lawyers and accountants, and spending money. More startups results in more business for the rest of the community.
- Civic pride from local startup successes. Just like we cheer on our local sports teams competing on the national stage (go Braves!), and have resulting civic pride from success, we also have civic pride from local startup success. I enjoy telling people that startups like Calendly and Mailchimp are local.
Strong startup communities are important for the local region and entrepreneurs should lead them.