`Startup Common' needed in Worcester.
COLUMN: WALL & MAIN
If Worcester has any hope of spurring high-tech startup activity, it needs a "Startup Common."
The idea of the common originated near an English village, in a field, where everyone brought their animals to graze. If the community did not over-consume the grass and kept it fertilized and fresh, then it was a useful resource for generations. If a few farmers let their animals eat too much, the whole thing died and the community fell apart.
That unpleasant outcome was dubbed the "Tragedy of the Commons." In Silicon Valley, there is a Startup Commons. Instead of grass, it consists of various ingredients - capital and skills like product development, managing teams, sales and marketing - needed for startups to get off the ground and grow. First-time entrepreneurs network to tap those ingredients, and if they are successful, then they give back to the common to benefit the next generation of startups.
I have been conducting research on Startup Commons and have interviewed about two dozen experts on the topic in Silicon Valley, Boston and Austin. When it comes to Startup Commons around the U.S., Worcester has far to go to get on the map.
In a Nov. 9 interview, Mark Rice, dean of WPI's school of business (and a former teaching colleague of mine at Babson College), told me that he thinks the success of a region's Startup Commons should be measured by "the number of new startups, rate of startups, growth rates of startups, failure rates. In aggregate, this would reflect economic impact. In addition, if creating fast growing companies is the key objective, then it's useful to see where venture capital is invested."
Mr. Rice has concluded that Worcester is not in the first or second tier of American Startup Commons. Using these metrics, he told me the most successful Startup Commons in the U.S. "are Silicon Valley/San Jose, Route 128 (Massachusetts), and New York Metro area. I believe the next on the list would be Los Angeles and Washington, D.C./northern Va./southern Maryland."
Mr. Rice explained that these top performing Startup Commons share certain characteristics. As he said, these include, "High levels of intellectual property productions (often tied to universities, and government/corporate labs); strong talent pool of entrepreneurs; availability of risk capital - and a culture and infrastructure that supports fluidity and connectedness."
Worcester is strong in some areas and needs improvement in others. According to Mr. Rice, Worcester has strengths in "IP (intellectual property) and access to risk capital." However, he believes that Worcester needs a "larger pool of entrepreneurial talent - including success stories and serial entrepreneurs with lots of experience that act as role models, and mentors." Worcester also lacks "the culture and infrastructure that supports entrepreneurs and their ventures. This reduces barriers and resistance, making it easier for entrepreneurs to succeed and making them want to stay in Central Mass instead of migrating to a `friendlier' environment."
With the right process, Mr. Rice believes that Worcester can bolster these elements. One way to do this is to assemble and lead a group of community stakeholders. In his view, these stakeholders include, "Universities (leaders, alumni and students/faculty/staff): local and state government; foundations; mentors investors; the local know-how network (service providers including lawyers, bankers, accountants and so forth); and the media."
Mr. Rice argues that Worcester should partner with others "beyond Worcester - to include MetroWest and all those people who don't want to trek into Cambridge; and it needs to have strong connections to Boston and NYC Metro area."
Mr. Rice notes that WPI is seeking to boost Worcester's Startup Commons through the recent launch of its Tech Advisers Network. "The Tech Advisers Network provides advising and networking to internal and external resources for the innovators and entrepreneurs who are engaged in applied research, tech transfer and startup activities occurring on campus or that are affiliated with WPI," according to Mr. Rice.
He sees an opportunity for WPI to connect with alumni and friends who support entrepreneurship through its WPI Innovator of the Year Celebration and the school of business Strategy Summits. He also wants to "double the amount of research funding" WPI attracts and to make student and faculty more aware of WPI's entrepreneurship capabilities to "grow the entrepreneurial talent pool."
My research suggests that local Startup Commons are jump-started by creating a venture in the region that becomes a pillar company - attracting talent from inside and outside the region and generating substantial wealth for those talented individuals. This is what happened in the 1970s in Silicon Valley when Fairchild Semiconductor went public. Several of its leaders went on to found Intel and its success spurred all sorts of others. If Mr. Rice's efforts spur the creation of such a pillar company, Worcester could realize the potential inherent in its high student population and access to risk capital.
Peter Cohan of Marlboro heads a management consulting and venture capital firm, teaches business strategy and is the author of 10 books. His column also runs Mondays and Wednesdays on telegram.com. His email address is email@example.com.
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|Title Annotation:||BUSINESS MATTERS|
|Publication:||Telegram & Gazette (Worcester, MA)|
|Date:||Nov 25, 2012|
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