Jonathan Ortmans - Economist Conferences - Greece...Jonathan Ortmans President, Global Entrepreneurship Week Senior Fellow, Kauffman Foundation Chair, Global Entrepreneurship Congress,

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Jonathan OrtmansPresident, Global Entrepreneurship Week

Senior Fellow, Kauffman Foundation

Chair, Global Entrepreneurship Congress,

Milan, 2015

email: [email protected]

twitter: @jortmans

THE GLOBAL STARTUP

REVOLUTION 3.0

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The Entrepreneurs Era:

A New Calling to Do Good & Do Well

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People: The Glass Half Full Generation

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Talent: “Let Us Be Global”

• Immigration: core to successful

ecosystems in the U.S.

• Silicon Valley: Kauffman

study found that over half

(52.4%) of Silicon Valley

startups had one or more

immigrants as a key founder.

• A free movement of risk-takers

from any city or culture

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Trends: The Science of Startups

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• Oceans Eleven: TeamCo-founder dating – importance of an

experienced co-founder with unique

knowledge of the industry to make a

disruptive idea into an innovation

• Networks:Relationships bring talent, mentorship, smart

money, markets

• Iterative and ScientificTest vision continuously - validate, build your

plane in the air, measure, learn…do it again

• Bootstrapping/Affording to FailBe lean as long as you can – and remember

venture capital is not the prime agent for

inducing entrepreneurship

Trends: The Science of Startups

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Ecosystems: A Renewed Human Spirit

Creating Value for Society

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Ecosystem Basics

• Entrepreneurial ecosystems are breathing

a renewed human spirit committed long-

term to creating value for society

• Ecosystems grow organically

• There is no recipe or formula

• You have to be in it for the long-term

• Communities celebrate the success of

anyone in the village -- all boats rise on an

incoming tide.

• We are all “feeders” (government,

university, non-profits, big companies, VCs,

angel investors) to entrepreneurs birthing

the new.

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Research & Policy:

The New Face of Government

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• Net job growth occurs only through startup firms. In the U.S. for example,

from 1980-2008, firms less than five years old accounted for all net job growth

• As older firms recede, high growth firms create the new wealth and jobs by

injecting dynamism

• The top 1 percent of all companies (measured by employment growth),

generates 40 percent of new jobs, and the vast majority of these firms are no

more than five years old

• While older companies lose 1 million jobs annually, new firms add an

average of 3 million jobs in their first year

• Of companies less than one year old, those with one to four employees have

created, on average, more than 1 million jobs per year over the past three

decades; those with five to nine employees have added, on average, half a

million jobs per year. - "The Return of Business Creation", July 2013

Startups and the Economy

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National Strategies: What to Do?

• Focus government on better ground

rules/incentives and fewer programs

• Promote the entrepreneurial culture by

legitimizing entrepreneurship as a worthy

career path

• Think strategies not plans – firm formation is

messy and grand central planning is

antithetical to innovation and organic

entrepreneurial activity

• Tolerate that entrepreneurship is

unpredictable

You can measure it but you cannot predict

outcomes

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“Beta Time” for Experimenting with

Different Policy Levers• Welcoming immigrant founders and

models for a more free flow of high

skilled co-founders

• Lowering barriers to entry and growth

and protecting new entrants from unfair

practices by incumbent market leaders

• Enabling new models for early stage

financing (e.g. JOBS act in US re

crowdfunding)

• Tax and other incentives (e.g. payroll

tax holidays) for new and young firms

• Policies to accelerate formation of new

ideas in their universities

• Other basic rule of law issues around

corruption, IP protection etc.

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Future Threats

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Performance and Hype:

Boom in Programs to Reduced Effect

Entrepreneurship

Programs and ,

Courses

Today

Overall

Rate of

Business

Creation

Number

1980

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• Myth 1: Small business plays the most important role in growing the economy.

• Fact: The age of the firm is a more important variable than the size of the firm.

• Myth 2: Most entrepreneurs are 23-year-olds starting tech companies in their local

coffee shop or their bedroom.

• Fact: The 'peak age' for starting a company is in the mid to late 30s, early 40s.

• Myth 3: Silicon Valley can be copied by other communities and countries looking to

create a hotbed of high-tech startups.

• Fact: Silicon Valley is a very unique place that's never going to be replicated.

• Myth 4: Business incubators play an important role in launching early-stage companies.

• Fact: Most research shows that incubators are not effective at all for actually

producing companies.

Myth-busting

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What is Next

• Better data – what data should

governments be collecting? How

should that data be used?

• Better intervention evaluation and

sharing of data around program

performance

• International collaboration on data

standards for new firm activity

• Increased attention on scale-up

• Mapping Startup Ecosystems – “the

first step in changing the ecosystem is

to know and understand what it is”