How do you create the next Silicon Valley?
Don’t focus on finding the venture capitalists on Sand Hill Road — instead, look to build college campuses like Stanford University or the University of California, Berkeley. So says a new study from the Kaufman Foundation which looked at new businesses in 356 metro areas.
“Their results — the fact that you have lots of educated people in the places where there are a lot of start ups — is absolutely right,” says Steve Kaplan, a professor of entrepreneurship and finance at the University of Chicago’s Booth School of Business. Kaplan notes the research doesn’t prove graduates will fuel more start-ups, only that the two tend to show up in the same cities.
“You also need accelerators, co-working space, active angel investors, organized early stage venture capitalists,” says Brad Harrison, a managing partner with Scout Ventures, who adds that new graduates alone can’t create a tech hub. “Especially if you take unseasoned first, time entrepreneurs. If they’ve never worked before, it’s a learning curve in just having them understand what it takes to build the company.”
Kaplan says that requires other local ingredients: a government that supports business via regulations and taxes, and successful previous start-ups, like Google, Microsoft, and Groupon, to lead by example and create an entrepreneurial mindset and culture, and also, to provide one last critical component — money.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.