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Do Startups Really Create Lots of Good Jobs – Harvard Business Review

Posted on Jun 15, 2016 in Articles, Authored, Harvard Business Review

Cross-posted from Harvard Business Review, June 6, 2016 Eskimos have 50 words for snow. Humans only use 10% of our brains. We hear these types of “facts” all the time — but are they true? Scientists are now saying, “Not so simple.” We have all seen how repetition of a particular statement or idea tends to lend it legitimacy – the so-called “truth effect.” This effect is likely strengthened when the assertion is made in a serious context by intelligent people with authority. Consider the idea, increasingly an assumption of fact, that “startups create jobs.” Since President Obama exhorted Americans to create startups, and the U.S. government, the Kauffman Foundation, and other partners launched the Startup America Partnership (which launch I attended), startups have been increasingly put forward as drivers of economic growth, in large part because it’s become accepted...

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What Schumpeter Got Wrong About Innovation and Entrepreneurship

Posted on Jun 5, 2016 in Articles, Authored, LinkedIn

Which is entrepreneurial, and which is innovative: Venture A or Venture B (real but disguised)? Venture A, an eight-year old startup with patents, a vision to disrupt a large growing market (think big data in a basic industry), $3 million of revenues, a $20 million operating deficit funded by investors, and an implied valuation of $200 million? The founders have 40% of the equity. Venture B, the eight-year-old acquisition of a 35-year-old copycat business (think generic drugs), no patents, that has grown in eight years from $37 million of legacy revenues to $1 billion, $200 million of operating surplus, and an implied valuation of $2 billion? The team also has 40% of the equity. You can hardly say both because, except the equity stake, they are diametrically opposed. Most people confuse entrepreneurship and innovation. Entrepreneurship and innovation are distinct...

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Fostering Scale Up™ Ecosystems For Growth

Posted on Mar 15, 2016 in Articles, Authored, Miscellaneous blogs, Other

If more and more companies grow more and more rapidly in your region, your economy will grow. Since 2010 we have been pioneering new methods for using entrepreneurship to drive regional economic growth. Rather than focusing on increasing the number of new firms, we are catalyzing local ecosystems which increase the firms with new growth – Scale Ups. Scale Ups are companies that enter into new, rapid growth trajectories. Our experience is that roughly 10-20% of existing businesses in any region have the business experience, customer base and operational skills to double their growth rate. What they are lacking is an environment – the entrepreneurship ecosystem – that supports new growth trajectories. Our Scale Up™ Ecosystems projects have the following core elements: Program. We have created an interconnected series of programs to impact every domain of the Scale Up™...

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Fostering Scale Up™ Ecosystems For Growth – The cases of Manizales-Mas and Scale Up Milwaukee

Posted on Mar 15, 2016 in Articles, Authored, Miscellaneous blogs

Daniel Isenberg and Vincent Onyemah [1] To appear in MIT Innovations: Technology, Governance, Globalization March 8, 2016 The search for reliable and replicable strategies to stimulate regional economic prosperity is as old as the field of economic development itself. [2],[3] These strategies have included the encouragement of direct investment, business attraction and retention,[4] and sector-based cluster strategies.[5] More recently, the role of entrepreneurship has been explicitly recognized, descriptively and prescriptively. Glaeser et al. and others have shown that one essential element in sustained regional growth is the presence of significant concentrations of indigenous small and growing businesses. [6] On the surface, these empirical findings are consistent with the popularization of the entrepreneurship ecosystem metaphor and the subsequent launching by governments and civic organizations of a plethora of startup encouragement programs (e.g., the Startup America Partnership; Startup Chile) as a...

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Launch a Scalerator™ for New Growth

Posted on Mar 15, 2016 in Articles

One of the core activities in our Scale Up™ economic development projects is our innovative, growth driven Scalerator™ business training program. The Scalerator™ demonstrates how a surprising number of “post-revenue” companies can experience tangible new growth in sales, cash flows and increased growth capacity in just a few months. Not only does this new growth ignite a virtuous circle, we use the Scalerator™ to systematically align the local stakeholders around supporting more rapid growth, the way growth really happens in the real world: step-by-step, win-by-win. Who participates? Participating Scalerator™ companies have roughly between $2-$10 million in revenues (this can vary), a fierce ambition to grow, an ownership stake (not subsidiaries), a scalable business model, and willing to make the time commitment. Teams of 2-3 can participate. Who pays? The Scalerator™ so far is a “pay it back” model, and...

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An Invitation to Leaders to Learn How to Use Entrepreneurship to Drive Economic Growth

Posted on Jan 26, 2016 in Articles, Uncategorized

Original published on Linked In January 19, 2016 Babson College is an acknowledged leader in entrepreneurship education. What is less well known is that Babson, for example via the Babson Entrepreneurship Ecosystem Project (BEEP), has been innovating the use of entrepreneurship for economic development, but with a twist: Rather than increasing the growth of new firms, BEEP has been focusing on increasing new growth in firms, new and existing. The results of several years of work in Manizales-Mas and Scale Up Milwaukee have been very encouraging. The background. Until recently, regional[1] strategies for economic development have included encouraging direct investment, attracting new business and retaining existing business. Last week’s headlines of General Electric’s move to Boston are testimony to the fact that these strategies are alive and well [AND EXPENSIVE. See Richard Florida’s piece here]. More recently the role...

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