Connecting state and local government leaders
“If you start with institutions, you get an institutional response…”
LINCOLN, Neb. — Communities across America are looking to entrepreneurship to fuel job growth. As one rural mayor in Ohio told me: “It’s the only way we’re going to have a future.” But many communities start at the wrong place, and then the outcome isn’t what they want.
Successful strategies for entrepreneurship must create a culture of entrepreneurship—an ecosystem in which startups and job growth can thrive. Communities typically start by cataloguing their assets: location, local industries, key institutions such as banks and community colleges and cultural heritage.
But the most important asset of all, in my experience, is the landscape of local entrepreneurs, and starting there makes all the difference. That landscape consists of existing privately-owned businesses, however small or large, whether incorporated or unincorporated. And the reason that it’s vital to start there is that those entrepreneurs possess the expertise around which an entrepreneurial ecosystem can be built.
If you start with institutions, you get an institutional response, and often that leads too quickly to a solution that may not be appropriate. A university may want to build an incubator, for instance. A chamber of commerce may advocate for an accelerator. Lately, pre-accelerators are hot.
But it’s the entrepreneurs who are the ultimate customers in this business scenario, and it’s the customers who should be heard first.
A classic example of the value of this approach can be seen in ALLO Communications, a telecommunications company founded in 2003 in Imperial, Nebraska, population 2,000. The company now provides fiber telephone, long distance, broadband, internet and television services to more than 335,000 people in seven cities. It was started because Brad Moline, ALLO’s president, had experience in telecommunications when he returned to Nebraska with his wife to raise their family. Jeff Kuenne, ALLO’s vice president overseeing network design and implementation, similarly had telecommunications experience.
This rapidly growing company emerged not because Imperial, five hours west of Omaha near Nebraska’s border with Colorado, was the obvious place to start a telecommunications company but because the local talent was there. That talent has changed the local business environment and its future potential in a way that any assessment that had not started with the entrepreneurial talent landscape would have missed completely.
Start by looking at local business data. How many early-stage growth-oriented businesses already exist? Is there a nucleus on which to build? What are their strengths and weaknesses? Are they clustered in a way that’s significant? The Center for Rural Entrepreneurship has created a free tool for talent assessment that communities can use to get started.
Don’t wait for businesses to come to you. The most promising ones often do not have the time. By visiting with local business leaders, communities can discover what’s most exciting at each company, what passions are driving the entrepreneurs, and what needs are holding them back.
Once those needs are clear, solutions can be designed to meet them. Communities can focus on two or three challenges to address, creating solutions that make a real difference. And making a difference is vital, because that’s what proves the value of any resource provider network. Activity alone is not sufficient; it must produce results.
Fortunately, more and more communities nationwide are creating entrepreneurial ecosystems to support business and job growth. Last summer the Kauffman Foundation convened in Kansas City its first-ever ESHIP Summit of more than 400 ecosystem builders from 48 states, Puerto Rico and the District of Columbia, plus nine other countries. Their presence underscored the breadth of their efforts. The insights, ideas and solutions that emerged are available to all in a digital playbook.
Growing entrepreneurial ecosystems by maximizing local talent will be an ongoing priority when the Federal Reserve Bank of Kansas City co-hosts a national convening in April with a focus on entrepreneurship in economically distressed communities. The Kauffman Foundation will then host its second ESHIP Summit in July.
America is loaded with talent. It has always been our greatest strength. And that talent is spread across the country—in rural areas as well as urban.
Entrepreneurial ecosystems have enormous potential to unlock business and job growth. If they start by understanding the talent on hand, they will create solutions that entrepreneurs need and will help generate fast-growing companies in locations that you might find surprising.
Don Macke is co-founder of the Lincoln, Nebraska-based Center for Rural Entrepreneurship.