Launch Minnesota, an initiative by the Minnesota Department of Employment and Economic Development (DEED), is designed to boost the state’s economy by strengthening the startup ecosystem. The goal is to increase the number of statewide startups and amplify Minnesota as a national innovation leader.
Entrepreneurship is already exploding by itself. Numerous aspirants have specific ideas in mind and a deep interest in starting a business; most have no experience. Minnesota already has 50 incubators, many angel groups/individuals, hundreds of meetups, numerous events, and several universities. These incubators work with entrepreneurs with viable concepts to help grow them into successful businesses.
Most entrepreneurship support programs and policies engage an individual once they have already started a business or have gone far in the process of doing so. What is missing is mass-scale skill development and requisite competence building. These programs leave out people who want to start a business and have even taken some steps, but stopped because of lack of reasonable assistance at the idea stage—the initial step of preincubation support, of screening and polishing raw ideas into quality ones.
Lack of this piece leads to too many failures and missed opportunities. Remedying this problem will dramatically increase the number of quality business concepts.
Recent Kauffman Foundation reports, drawn from a nationally representative survey of U.S. adults, detail critical findings on why “leavers,” though interested, decide not to start a business or to wait. Key findings include:
- They are about 6 percent of the adult population.
- The most common action was discussing the business idea with a friend, colleague, or acquaintance.
- The most commonly cited reason for leaving was concern about business survival.
- More people became entrepreneurs in 2020 than in previous years. Good news? Not so fast. Kauffman says the percentage doing so by choice rather than economic hardship was the lowest in a quarter century.
Since the biggest impediments to entrepreneurial ecosystem development are at the preincubation stage, a complete economic development program must have an initial-screening support system to find and nurture ideas and advance those that show merit for further intervention by the existing incubators.
We are all familiar with a person approaching us with an underdeveloped idea and asking for investor help . . . We shake our heads but have no place to send them for preparation.
Many aspiring entrepreneurs, inexperienced in the complex process of building a successful business from scratch, believe that having an idea merits investment to grow it into a successful business. We are all familiar with a person approaching us with an underdeveloped idea and asking for investor help. And they expect this nurturing to be at little or no cost to them. We shake our heads but have no place to send them for preparation—not at scale, anyway.
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Launch Minnesota should provide a program of pre-incubation preparation on a large scale. Anyone with an idea should be able to participate; the initial screening would conclude by rejecting the proposed concept or suitably preparing it for the various incubators. An abandoned idea still equips the aspirant to evolve the next good one. Proper assistance at the early-idea stage is key to convert leavers into entrepreneurs.
Today’s pandemic circumstances bring about urgency. We have experience from previous economic downturns that the ensuing flow of ideas will be heavy, widespread, and from a broad set of business sectors. Though the upheaval has been difficult, we would be wise to follow advice commonly attributed to Winston Churchill: “Never let a good crisis go to waste.” A primer on orchard management advocates the importance of nurseries’ in propagating and growing trees to a usable size before planting. They provide a valuable service by sprouting quality seedlings from the plethora of seeds, saving time, money, and effort, and improving the orchard’s overall productivity.
Similarly, support for undeveloped ideas can yield more and higher-quality vetted concepts. Screening numerous ideas methodically and refining those that show promise can lift Minnesota’s economic development effort. A lack of a robust preincubation program will shortchange the state’s economic resurgence goals.