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Scale Up™ Ecosystems for Growth

We provide regional economic development consulting services and educational programs to stimulate economic growth.

If more and more companies grow more and more rapidly in your region, your economy will grow.

Background. 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 five core elements:

Consulting services. We offer interconnected series of educational programs and consulting services to impact every domain of the Scale Up™ Ecosystem, including:

  • The Scalerator™ – teaches business owners ($1-$10 million) how to scale their ventures
  • The ScaleCorps™ – connects experienced executives with Scale Ups for mutual benefit
  • The CEO Forum – helps CEOs of $.3 to $3 billion companies stimulate innovative growth
  • Leader’s Language – teaches mayors (and other civic leaders) how to encourage growth
  • ScaleServe™ – engages professional service firms with Scale Ups
  • Financial Engagement – impacts the profitable deployment of capital

Platform. In each location we help you to create, coach and collaborate with a compact execution team to:

  • Execute the Scale Up™ programs;
  • Build and deliver a communications program;
  • Implement an industrial grade project management platform; and
  • Continually innovate new programs

Governance. Another core element to our Scale Up™ Ecosystems projects is a clear and comprehensive governance system that blends transparency and clarity with flexibility to continually innovate.

Professionals. Our Scale Up™ projects use some of the top entrepreneurship professionals in the world from Babson College, MIT, Harvard, and beyond including Daniel Isenberg, Vincent Onyemah, Elaine Eisenman, Kevin Mulcahy, Mary Gale, Candace Brush, and others.

Principles. Through experience with diverse environments, we have distilled a set of Scale Up™ action principles, for example:

  • Focus on specific regions
  • Align the leaders from different sectors around common growth objectives
  • Get quick wins on the board showing that Scale Up™ works
  • Build communications platforms to amplify the spillovers from success

Contact our team for more information.

 

[Babson logo used with permission]

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

Posted by on Jun 15, 2016 in Articles, Authored, Harvard Business Review | Comments Off on Do Startups Really Create Lots of Good Jobs – 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 as fact that startups create jobs. But do they? Here are five significant challenges to this widely-accepted policy “fact”: What do you mean by “startup”? The word “startup” has become TV-worthy, with the popular shows Silicon Valley, Shark Tank, and Apprentice purveying passionately pitched startups. But if you probe further, you’ll find that different people mean radically different things when they use the term. Researchers define startups as newly registered firms, sometimes with at least one employee (often the founder). This startup definition is not wrong, obviously, but when economists say “startup,” the vast majority of people think “WhatsApp” and “Snapchat.” Revered Silicon Valley investor Paul Graham says that “a startup is a company designed to grow fast.” Others disagree, arguing that “startups are a state of mind,” “a feeling,” or “a temporary organization designed to search for a repeatable and scalable business model.” This inconsistency is a problem for anyone using the term in an economic policy context. A related challenge stems from what is called the “survivor bias”: Since so many new companies fail in the first years, the few outliers who do jump successfully through the many hoops are by definition more robust as businesses, and so dramatically distort our views. Hence, you could say “startups create jobs” – as long as you ignore the large majority that don’t. Not all jobs are created equal. And as far as we know, jobs created by startups – at least the newly-formed-firm variety – are less equal, in two ways. One is that they pay less: A study in the UK has shown that on the average, a startup reaches only $180,000 in revenues after its sixth year, barely enough to pay salaries. A recent study in Denmark has found that indeed, startups create quite a few jobs, but that a disproportionate number of them are low-skilled service jobs. And keep in mind that even successful startup entrepreneurs work for low or no salary for months or even years after their company appears as a “startup” in census data. Consider this quick story. A few years ago, I met with the winners of the Nordic Startup Awards. While congratulating them, I asked: How many people are employed at your firm? We three just hired our fourth. Me: Interesting, would you mind telling me whether you four are drawing salaries? Oh, no salaries: We are bootstrapping (i.e. working for free to get things going). Me: Are all four of you registered as employees? Yes. The economic...

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What Schumpeter Got Wrong About Innovation and Entrepreneurship

Posted by on Jun 5, 2016 in Articles, Authored, LinkedIn | Comments Off on What Schumpeter Got Wrong About Innovation and Entrepreneurship

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 and need, in order to be useful, to remain distinct. There is a lot of innovation without entrepreneurship (think NASA, Manhattan Project) and lots of entrepreneurship without innovation (think copycat generic pharmaceuticals).  Some entrepreneurship leads to later innovation, and some innovation leads to later entrepreneurship. A good illustration of an investment in pure innovation, but not entrepreneurship, is the new $317 million MIT fabric and fiber innovation center, with involvement of government (DOD), private investors, many universities (not just MIT), large corporations, and startup incubators. As the innovations develop, I have no doubt that entrepreneurs will line up to take advantage of the innovative assets, as will larger and older corporations. Profit and risk are at the heart of entrepreneurship. I know – some of you are wondering, “But if it impacts a market, it must be innovative.” Not so: For over two and a half centuries entrepreneurship has been conceived of as an economic, profit-seeking activity involving a person perceiving economic opportunity and taking risk for potential (but not guaranteed) economic gain. Only in the recent 10-20 years have we seen the use of entrepreneurship drift amorphously to artrepreneurship, edupreneurship, policy entrepreneurship, parentrepreneurship, intrapreneurship, and social entrepreneurship. Books now tell us that nations can be entrepreneurial. Innovation is profit-agnostic. Even though in the macro and over very long spans of time, innovation does drive economies, at the micro level, innovation is economically indifferent: An innovation might make money (think Thomas Edison, who became very wealthy), and it might lose money (think Nikola Tesla, who died penniless after helping Edison and others to commercial success); whether it does or does not has no bearing on how innovative it was. “But that confuses innovation and invention,” some of you might think. Again, not so. For something inventive to become an innovation, it must be used. Being used distinguishes an innovation from an invention. All innovation is not created equal. Critical thinking can be applied to things said even by very famous and transformative thinkers. The great economist, Josef Schumpeter lumped five processes under a single innovation umbrella: (a) launch of new products, (b) application of new methods, (c) opening of new markets, (d) acquiring new sources of supply, and (e) creation of a new market structure. Yet is there anyone who seriously believes that, for example, developing a swallow-able camera to diagnose bowel disease (Given Imaging) is as equally innovative as selling that same pill in Denmark, and then selling it...

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Fostering Scale Up™ Ecosystems For Growth

Posted by on Mar 15, 2016 in Articles, Authored, Miscellaneous blogs, Other | Comments Off on Fostering Scale Up™ Ecosystems For Growth

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™ Ecosystem, including: The Scalerator™ – teaches business owners ($1-$10 million) how to scale their ventures The ScaleCorps™ – connects experienced executives with Scale Ups for mutual benefit The CEO Forum – helps CEOs of $.3 to $3 billion companies stimulate innovative growth Leader’s Language – teaches mayors (and other civic leaders) how to encourage growth ScaleServe™ – engages professional service firms with Scale Ups Financial Engagement – impacts the profitable deployment of capital Platform. In each location we create, coach and collaborate with a compact execution team to: Execute the Scale Up™ programs; Build and deliver a communications program; Implement an industrial grade project management platform; and Continually innovate new programs Governance. Another core element to our Scale Up™ Ecosystems projects is a clear and comprehensive governance system that blends transparency and clarity with flexibility to continually innovate. Professionals. Our Scale Up™ projects use some of the top entrepreneurship professionals in the world from Babson College, MIT, Harvard, and beyond including Daniel Isenberg, Vincent Onyemah, Elaine Eisenman, Kevin Mulcahy, Mary Gale, Candace Brush, and others. Principles. Through experience with diverse environments, we have distilled a set of Scale Up™ action principles, for example: Focus on specific regions Align the leaders from different sectors around common growth objectives Get quick wins on the board showing that Scale Up™ works Build communications platforms to amplify the spillovers from...

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

Posted by on Mar 15, 2016 in Articles, Authored, Miscellaneous blogs | Comments Off on Fostering Scale Up™ Ecosystems For Growth – The cases of Manizales-Mas and Scale Up Milwaukee

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 lead economic development strategy. Read more here.Fostering Scale Up Ecosystems For Growth GEC 2016 in press MIT Innovations March 8...

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Launch a Scalerator™ for New Growth

Posted by on Mar 15, 2016 in Articles | Comments Off on Launch a Scalerator™ for New Growth

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 it is funded by the Scale Up™ project. We are so confident about the results that we don’t charge Scalerator™ participants up front – participants donate back to the project based on the value they have received, whatever that is. That way we are always focused on delivering tangible value for the valuable time participants devote to the Scalerator™. What’s the value? Growth. It ultimately depends on you, the participants, but our real-life-experienced faculty- coaches can support you, like having a team of world class growth-fitness trainers nearby. No less important, you will form a unique business bond with like-minded growth obsessed entrepreneurs who live and work close by. Our Scalerator™ has four elements spread over about six months while running – growing – your business: Seven 1.5 day workshops focused on sales, people, and money, and how they work together. Six PPP (peer-to-peer-program) exercises to prepare you for the workshops. Two remote one-on-one mentoring sessions 10-15 EPIs (ecosystem plug-ins) where valuable ecosystem connectors (bankers, large buyers, government support agencies, service professionals) come meet with you to facilitate your growth. Go to Scale Up Milwaukee to see some of the Scalerator™ companies’ own...

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

Posted by on Jan 26, 2016 in Articles, Uncategorized | Comments Off on An Invitation to Leaders to Learn How to Use Entrepreneurship to Drive Economic Growth

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 of entrepreneurship has been added to the policy tool kit, with policy makers and civic leaders extrapolating from reports that startups create a lot of new jobs to launch literally hundreds of startup encouragement programs (e.g. Startup America and Startup Chile). The rapid rise of the entrepreneurship ecosystem metaphor, for which I am partly responsible, (see HBR, Forbes, OECD), has further fueled the belief that not only are startups important for economic development, but they can and should be systematically encouraged and supported. The problem. Surprisingly, given the public visibility of the startup movements (see Startup Nations) the leap from “startups create jobs” to “let’s create more startups” is more of an abyss than terra firma. First, very few startups create jobs, the jobs tend to be of lower quality and disappear steadily after the first year, and many of the jobs “created” in local startups come at the expense of jobs lost elsewhere in the region. Second, there is little evidence that increasing the numbers of startups stimulates job creation or any other indices of economic growth. To the contrary, the return on investment in startup encouragement, when measurable, is not strong (e.g. Startup New York; Startup Chile). There is evidence that startup activity in a country or state is negatively correlated with firm survival, negatively correlated with national competitiveness, and negatively correlated with the proximity of mid-market firms. Startup policy makers are beginning to feel frustrated. Fostering higher growth firms. BEEP’s premise is that regional prosperity is fostered when a critical mass of indigenous local companies grow more and more rapidly, and that an ecosystem (in the broader sense) aligned with this objective can accelerate reaching this tipping point. The modus operandi of BEEP has been to demonstrate how this can happen in specific regions. To this end, BEEP has developed concepts and methodologies to stimulate a broad range of ecosystem actors to recognize and support new growth, each in ways which are specific to those stakeholders, and each of which addresses those stakeholders’ idiosyncratic needs. Learning the lessons of growth. BEEP’s mission is to go beyond demonstrating that good ideas and good methods work. BEEP is further committed to codifying those methods and then disseminating them to regional leaders in the most practical way possible. To this end in 2014 we launched a three-day intensive program, Driving Economic Growth through Entrepreneurship Ecosystems (#DEGBabson), published a series of detailed practical cases from around the world, and recruited a...

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Scale Up Ambition Leads to Scale Up Results

Posted by on Jan 26, 2016 in Articles, Uncategorized | Comments Off on Scale Up Ambition Leads to Scale Up Results

Original appeared on LinkedIn January 11, 2016 Share on LinkedIn Share on Twitter Scale Up mindset and Scale Up ambition are important. I recently read an important study reporting a meta-analysis of many studies in a variety of countries. The researchers from the ERC in the UK looked at the relationship between entrepreneurs’ expectations for their upcoming growth, and their actual subsequent  growth. The conclusion: actual subsequent growth (revenues) is predicted by intentions or expectations of growth, in particular when the motivation of the entrepreneurs is to generate wealth, that is, be successful as a business (as opposed to becoming one’s own boss). In other words, those entrepreneurs who want to and expect to scale up, have a higher probability of doing so, all else being equal. The predictive correlation is in the .25-.35 range. I have little doubt that there are mediating variables (such as awareness of one’s own skills and assets) which may lead to both ambition and outcomes. But it is an intriguing finding, particularly as it is a summary of numerous studies. By coincidence we just happened to have completed a mid-term survey of the growth expectations of our current Scalers in the Scalerator program (this is one of the many programs in our Scale Up Milwaukee initiative).  The current cohort of Scalers consists of 18 companies with combined revenues of about $100 million, and median revenues of about $5 million. They started Scalerator3 in October 2015, and will finish in March 2016. 33% of the Scalers expect to have increased their run rate by 25% or higher by the end of the Scalerator. 72% expect to increase their run rate by 25% or more by the end of 2016. The qualitative feedback we are getting from the Scalers is that the Scalerator program, including the co-Scalers, has been an important stimulus of their ambition. By the way, this is all reminiscent of work done 50 years ago by one of my Harvard teachers, David McClelland, a pioneer in the use of motivation theory. McClelland showed that it was possible to measure and, more importantly, to intentionally stimulate peoples’ need for achievement, or nAch. In other words, people could learn to be ambitious. He also showed that achievement imagery in children’s stories in a given country (think: The Little Engine That Could) predicted economic growth a generation later (not surprisingly, there were healthy debates about the research’s general applicability).  But the more general point is worth noting, that psych0logy does impact economy. Takeaway: Stimulating ambition is in the critical path to economic...

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Using Supply Chains to Scale Up Your Business

Posted by on Dec 4, 2015 in Articles, Harvard Business Review | Comments Off on Using Supply Chains to Scale Up Your Business

By Daniel Isenberg and Timothy Coates   This article appeared on November 20, 2015 in the Harvard Business Review. Until a few years ago Steve Cronce’s Raphael Industries did $1 million dollars a year of specialized industrial painting for customers within driving distance of their plant in Milwaukee, Wisconsin. One of them happened to be GE Healthcare, which sent Raphael “dead” X-Ray tube parts for re-coating and re-commissioning. Challenged by other entrepreneurs in Scale Up Milwaukee’s Scalerator program to come up with a plan for rapidly ramping up his business, Cronce wondered: “What if I redefined Raphael as a strategic link in the global medical imaging supply chain, rather than as a paint shop?” This supply chain epiphany is taking Raphael toward $10 million of work a year by burrowing into GE’s global network as well as serving its competitors. He is poised to become the leader in this segment of a multi-billion dollar market. “By serving as GE’s and other equipment makers’ supply partner, the whole world is now my scope. I am no longer limited by geography.” This story leads us to a question: Which sounds sexier: sassy Silicon Valley startup or nose-to-the-grindstone supplier? No doubt the tech startup wins the popularity contest hands down. But let’s change what we’re asking: Which has the better potential to scale up and create long term value for customers, owners, investors, and employees? According to a study by the Center for an Urban Future, small businesses that win large supply contracts report average revenue growth more than 250% in the two years after their first sale. The reality is that the vast majority of successfully scaled ventures are not mythical unicorns with billion dollar paper values, but workhorses that plug along, steadily producing results year after year. Although big, global supply chains certainly have their own dynamism, they mostly evolve incrementally through minnovation rather than disruption – and thus get short shrift in the business media and amongst aspiring entrepreneurs, hungry to create successful ventures. But entrepreneurial know-how and energy can work very effectively in the context of plugging-in as a supplier, as Steve Cronce and thousands of others are learning. Taking this path isn’t a cake walk, however. Corporate procurement processes are opaque, secretive, and can be influenced by political pull as well as pure performance. Here is some advice on how to tap into supply chains for successful scale-up: Reveal more than is comfortable. Like it or not, the reality (in supply chains, as elsewhere) is that power is asymmetrical – large customers typically have more clout than you do, and they know it. One result is that they keep their cards close to their chests about what they are looking for (at first), while expecting you to reveal everything – your finances, pricing, ownership, human resources, production processes, quality assurance, customer service procedures, KPIs, and existing customers. Not only does this take time (corporate customers in IBM’s free Supplier Connection portal require advance answers to over 140 questions before they will even consider you), frankly, it is downright frightening for most of us. Jorge Rodriguez-Gonzalez, founder of PACIV in Puerto Rico, flipped this dynamic on its head. Compliance is crucial for pharmaceutical makers such as Abbott and Amgen – a “Form 483” warning from an FDA inspector can shut down a drug facility in...

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The Right Way to Plan an Innovation Tour

Posted by on Dec 3, 2015 in Articles, Authored, Harvard Business Review | Comments Off on The Right Way to Plan an Innovation Tour

This article by Daniel Isenberg first appeared in the Harvard Business Review July 7, 2015. Innovation tourism: it’s a thing. The tourists are entrepreneurs looking for the right economic microclimate to start a business; corporate scouts looking to expand their company’s reach or improve their supply chain; policy makers trying to figure out the right balance of rules and infrastructure to create a thriving economy; investors searching for the next crop of opportunities. These well-intentioned professionals travel the world in pursuit of the secret sauce of innovation. Typically, tourism involves guided tours, pitch events, conferences with lots of panels, and well-planned visits to companies, universities, and government agencies tasked with increasing entrepreneurship and innovation. The problem is, all of these good people are often guided to see a distorted reality. Not that more formalized presentations and assessments are necessarily Potemkin villages, but they often miss what’s really going on. It’s just that these actors naturally tend toward self-promotion. (If you ask the director of a government innovation agency how influential or effective they are, what answer do you expect, other than “extremely?” Have you ever encountered a university tech transfer office director who says, “Sorry, we are a drain on the university’s cash?”) But an innovation tour can be valuable, as long as you know what to look for and think about. Entrepreneurship and innovation ecosystems aren’t simple, easily graspable objects; they are a construct we use to make sense of an exceedingly complex reality. And they are indeed important to be able to see and understand. To get at their essence, you need to think and act like the anthropologist doing field research by observing, questioning, and listening to many different parts of the land you are visiting. Here are some tips for a useful innovation tour: Tip 1: Look for the “software,” not the “hardware.” Many people, including business experts, misconceive entrepreneurship and innovation ecosystems as consisting of the activities and structures which are easily visible – what I call the entrepreneurship ecosystem “hardware”: startup incubators, angel investor meetings, tech transfer offices, innovation centers, entrepreneurship courses, business plan competitions. Yet the most important drivers of entrepreneurship are often the more subtle “software”: the networks of trust going back to high school or military service, the belief systems or values at the root of people’s resilience in the face of setbacks, or the social norms which encourage thinking out of the box. So try to find networking events, engage in conversations, or participate in the programs that shape that software. In 2009, I took 42 Harvard Business School students to Israel for a week of entrepreneurship exploration. I first had them meet with an Israeli army signal corps general (who was in the midst of overseeing a military operation); then we headed to a beach to engage in team building and camouflage exercises with young Israelis preparing for elite military combat units. Since military service is mandatory in Israel, this provided useful insights into the culture and mindsets of Israelis. In addition, we also went to the discos to experience the culture’s youthful exuberance. And we spent time at Kibbutz Ein Shemer’s field house for ecological initiatives and experimentation. This helped underline the idea that cultural and social “software” is every bit as important as business and economic “hardware” in assessing a region’s business ecosystem. Tip...

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Judge an Economy by the Number of Scale Ups, not Start-Ups

Posted by on Oct 2, 2014 in Authored, Harvard Business Review | Comments Off on Judge an Economy by the Number of Scale Ups, not Start-Ups

Originally published in Harvard Business Review on October 1, 2014. Co-authored with Fernando Fabre. More new businesses are better for society, right? That’s a common assumption. For instance, take this recent Washington Post piece, headlined, “More businesses are closing than starting. Can Congress help turn that around?” Sounds ominous at first. But wait a minute – is starting more new businesses always a good thing? Isn’t it a basic economic tenet that well-functioning markets will have many entrancesand exits, that weak businesses (including thousands of one-person enterprises) will get recycled quickly (fast failure) and that over time, vigorous, well-regulated markets will support strong and growing companies, which in turn provide dignified jobs and prosperity? This conflation of startups with entrepreneurship, and more broadly with “business dynamism,” has become so widespread it can muddle even the most serious research. For example, the admired Brookings Institution recently purported to explain an apparent decades-long decline in American entrepreneurship. The supporting evidence? More and more American companies are surviving and growing beyond 16 years. The implicit axiom here is that robust companies that have sustained and grown over the longer term are somehow less innovative. The authors of this study, as well as othercommentators, imply or even proclaim explicitly that these dead weight dinosaurs are dampening American society’s entrepreneurial spirit. (It should be noted that amongst this group of apparently innovation-barren 16-somethings are: eBay [19], Google [16], Starbucks [43], Netflix [17], Apple [28], Cisco [30], Boston Scientific [35], and Dell [30].) In attempting to explain the root causes of the decline, the Brookings report also points to the parallel decline in the number of new companies registered during the same period. Their solution: “America needs more startups.” The danger here lies in our unquestioning acceptance of the assumptions built into these reports, i.e. that having more growing, sustaining companies is somehow destructive of entrepreneurship in the economy; and that the decline of newly registered businesses, in and of itself, is a bad thing. (Note that Germany has witnessed an almost identical “decline” in dynamism over the past thirty years and most experts would agree their economy has been quite strong. And Alibaba is a 16 year-old company, and no one is claiming it is sluggish or un-innovative.) Indeed, empirical evidence showsthat the decline in new business formation is associated with increased per capita income, and the more new businesses countries have, the lower their GDPs are. Most of us who have built or invested in sustainably growing business ventures (as we have) would be thrilled at their survival and growth. Anyone who has successfully built a company knows that it typically takes 15-20 years or more to take root. The WhatsApps are the rare exceptions. These growing businesses – which we call “scale-ups” to distinguish them from start-ups – represent exactly the kind of long-term entrepreneurship that improves societies, jobs, quality of life, and innovation. Entrepreneurial scale-ups are companies – young or old – which are run and owned by growth-driven leaders, and which at any stage of their lives may launch a new growth trajectory. Study after study shows the following: Relatively high-growth ventures are often at least 16 years old, and are disproportionately high drivers of jobs, growth, value, and sustainability. New company starts are easier to count, but they alone don’t have the positive impact on economies that growing a company does. In the coming eight weeks, we are engaging in a global effort to focus more of the entrepreneurship conversation on scale-ups and their positive impacts on societies and economies. This effort is primarily...

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