One of the conversations we’ve been having over the last few months is about more intentionally growing the startup and entrepreneurial community in our metro region. This is a meaty topic that comes and goes regularly. While it’s an important topic, and one I’m focused on, there’s a “why” component of it that needs to be addressed more directly. Yes, we want to grow our community but what are some of the benefits of a larger startup community?
Here are a few ideas:
- Regional Dynamism
Cities and metro regions that are growing are more dynamic. Infrastructure investments, quality of life improvements, and other livability factors get emphasized when there’s optimism and growth in an area. People want to be part of a winning movement, and growth, both population and investment, is the strongest indicator good things are happening.
- Job Growth
By definition, a startup is a business focused on growth. Growth creates jobs. More jobs provide more opportunities for both existing residents and for people to relocate to the area. While remote work has changed this equation slightly, it’s still easier and more fun to work with people face-to-face, at least some of the time.
- Local Headquarters
When the business is headquartered locally, a number of secondary benefits emerge like stronger engagement with community issues, more donations to local non-profits, and general caring about their city. A company that’s locally headquartered will have a greater impact than a company that has a regional office, everything else held constant.
- High Quality Jobs
Not only will more jobs get created, the jobs will be of a higher quality as startups are often in technology and other high paying fields. Raising the average salaries and household income of a region helps the entire community as well as creates secondary jobs across traditional industries.
- Wealth Creation
Startups, when successful, are enormous wealth creation engines. An important, but not often discussed, element of the startup industry is that there’s a pronounced power law where a tiny percentage of startups create the majority of the gains. Having just a few startups that hit it big can materially move the needle for wealth creation in a community.
Intuitively, it makes sense that more entrepreneurial activity in a community is a good thing. Only, it’s important to go up a level to think about why a larger, broader, and deeper startup scene helps the region, especially in the context of a long, multi-decade horizon.
Let’s grow the startup community.