David B. Lerner

Dave Lerner, 3x Entrepreneur, Angel Investor, Host of Venture Studio
Entrepreneur, Angel Investor, Director of Columbia University Venture Lab, Blogger, Community Organizer, Golfer-in-Exile.

Startups, Not Bailouts Create New Jobs? Wait, So the Emperor Has No Clothes?

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This is part of my Series on Entrepreneurial Culture.

People in the start-up and investment community understand from first-hand experience that when it comes to job creation- start-ups are where it's at. It's also great to have organizations like the Kauffman Foundation, (that actually study, support and promote entrepreneurship), around to back this up with some hard stats. Below, for example, is the staggering reality about new job creation in this country:

“Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less...” (Kauffman Foundation)

But here's the problem: People who are not in the start-up, investment or tech scene, (read: the majority of the American electorate), through no fault of their own, do not for the most part realize this fact. This is probably because much of the mainstream press does not focus on or cover this reality.  I see very little emphasis on how critical talented entrepreneurs are to the growth of our economy and to job creation.

I was therefore amazed and delighted to finally see someone from the 'mainstream press' actually step-up on the big stage and bellow-out a big unqualified YAWP for the need for our government to focus on policies that support start-ups and entrepreneurs instead of hurling taxpayer billions at bailouts. G-d bless Thomas Friedman! How often do you see a NY Times columnist writing stuff like this:

"Good-paying jobs don’t come from bailouts. They come from start-ups. And where do start-ups come from? They come from smart, creative, inspired risk-takers. How do we get more of those? There are only two ways: grow more by improving our schools or import more by recruiting talented immigrants."

I couldn't agree with Tom more and I've covered some aspects about how I think we can improve entrepreneurial culture in our universities here and here.

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I have seen a news episode last weekend, here in California, about outflow of well educated immigrants with US start up experience. Too much negative sentiment toward business and uncertainty about political stability and political corruption - there is plenty of that in the world, why stay or come to America?

I have no confidence that government programs are likely to increase entrepreneurship, because they simply cannot artificially increase creativity and personal energy. My personal notion is that the best thing we can do for the entrepreneurial people who self-identify is to show them how to reduce risk by avoiding classic mistakes.

We are acting on this general notion in Blacksburg, Virginia; and you can look it over at www.vtknowledgeworks.com. If you want more, check my blog, www.startwithmoxie.com.

I agree with the "programs" piece as this word seems to connote massive, bureaucratic efforts that never seem to work. I do think that local government can do a lot- as I have seen lately in NYC, by providing cheap incubator space and seed investment programs...
But in the larger sense- I think the "government", whether it be local or national, should, as a baseline: do no harm! That would be refreshing...

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