Last fall, after three years of running my own business, I took a job as Vice President of Marketing and Entrepreneurship with my local economic development council. It was an unusual decision. You don't hear about many successful entrepreneurs deciding to forego the independence and income potential that comes with owning their own business to enter the public sector.

My new role has also given me a better perspective on the disconnect between startups, entrepreneurs, and the public sector. Here are a few observations on the misunderstandings between government and startups, and what can be done to improve the relationship between the two.  

1. Government wants startups to succeed.

Since the early 1980s, there has been a commonly held view that government is the enemy of the private sector, and that bureaucrats everywhere are constantly dreaming up new ways to frustrate entrepreneurs. However, one of the primary ways the public evaluates its government--on the local, state, and federal levels--is by the availability of good jobs. In other words, public-sector officials really, really want startups to succeed. Economic development organizations like the one I work for are judged to a large extent by their ability to create a base of thriving employers.

We know startups are an important part of that, and we're rooting for the founders in our communities.

That said...

2. Even though government wants to help, it doesn't always know how.

When I was an entrepreneur, I cared about one thing: making sure enough revenue came through the door to pay myself and my employees. My sense of civic obligation was pretty limited.

Local economic and workforce development departments occasionally fail to understand that. For example, while the apprenticeship and mentoring programs agencies like these often develop are admirable, startups don't have time for community service. Everyone on a startup team--from the intern to the CEO (both of whom are often unpaid)--needs to be able to add value from day one.

That's a specific example that speaks to a larger truth: Most public-sector officials cannot understand the pressure and time demands startups face. Of course, government workers face pressure, too, and like their startup counterparts, they are frequently overworked and undercompensated.

Still, there's public-sector pressure, and then there's startup pressure. Public-sector pressure is an overflowing inbox and a city council meeting that's going to be contentious. Startup pressure is a product that needs to launch today because it was originally supposed to launch three months ago, and if it doesn't launch today you're going to fire a whole lot of people who sacrificed and turned down more-secure ways to make a living because they believed in you.

Both types of pressure are unpleasant, but only one comes with a guaranteed paycheck.

And that makes a difference.  

3. What can be done to strengthen relationships between startups and the government? Create more skilled workers, and have a beer together.

The lifeblood of startups isn't money.

It's talent. Money flows to talent, not the other way around. Local and state government play a crucial role in developing talent for startups--they just tend to approach talent development in a shortsighted way. Across the country, economic and workforce development programs are starting to offer courses in coding and basic programming to retrain displaced workers. That's great, but employees in transition aren't always an ideal hire for startups.

Instead, local (and state) governments need to take a hard look at the skills being taught in schools. Are the graduates coming out of local high schools and colleges prepared to work in a technology-based economy? For the record, the answer to that question isn't just more STEM education. Students also need to learn the critical thinking and creative skills that give human beings the ability to consider the "why" and not just the "how."

Last, personal relationships between startups and the government would help. Realistically, creating those relationships will require government officials to engage startups on their turf--which is far more likely to be a happy hour at a coworking space than a long meeting at City Hall.

The good news is that chatting up a founder over a beer at the local microbrewery is a lot more fun than attending meetings.

Published on: Jan 12, 2018