Friday, June 24, 2011

Talent And Cities

When looking to attract or retain talent, regions strive to make life in the community more appealing and/or tolerant. This strategy doesn't make any sense. Making a go of it in New York isn't easy. I'd bet most newcomers lived in a shithole and found, at best, people to be indifferent. You put up with a lot to stay in Big City.

The same goes for would-be entrepreneurs. Policymakers take the same approach to address perceived shortcomings in the local startup culture. Flood the market with venture capital. Mitigate risk. Seek diversity.

I think this paradigm generates expectations that inform policy failure. When the going gets rough, blame the Good Ole Boys network. That assumes that in Boomtown, there are no backroom deals. In Austin, there is meritocracy. Hogwash.

Yet we continue to believe that we can legislate an environment that will bring out anyone's inner Michael Jordan. The United States already prolifically produces entrepreneurs. That's not the result of tolerance or a cool image.

“They want to see that you believe your story enough to risk everything for it,” said Julia Hu, who left MIT when she got funding to build her sleeping device company, Lark. “They don’t like to fund non-committed entrepreneurs. In that sense, it’s in their interest not to deter you when you say you are dropping out of school.”

Harj Taggar, a partner with Y Combinator, an incubator founded in 2005 that funds young entrepreneurs, said applications from students were rising. He noted that there was strong interest from angel investors who were “willing to fund these 18 and 19-year-old kids”.

Part of the reason, he said, was that it was a lot cheaper to start an internet business today than during the internet bubble of the late 1990s. Laptop computers have become less expensive and web-based companies do not have manufacturing costs. Young people without families or mortgages were also willing to live in cheap apartments, eat noodles and work long hours, he said.

Reads like a branding campaign for the next Indianapolis. Let's add high-speed rail to the mix and get out of the way. Risk it all and stay ... Indiana.

Starting your internet business is easier than ever. The same constraints still apply. You have to endure a lousy quality of life. The same goes for migration.

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