Friday Mar 18, 2011 by Don Dodge - Developer Advocate at Google
Over the past few weeks I have seen over 300 start-ups at Stanford Startup Labs, Launch Conference, DEMO, and SXSW. StartupAmerica is a great new program to encourage more entrepreneurship in America. There are startup incubators sprouting up everywhere, and venture capital is plentiful. Is the problem not enough startups, or not enough "finish-ups"?
Venture Capital firms invested $21.8 Billion in 3,277 companies in 2010. Angel Investors invested another $16B to $20B in 50,000 more early stage startups. Many other companies startup with no funding from VCs or Angels. In fact, there are over 500,000 new companies started EVERY year according the the US Small Business Administration (SBA).
Most startups don't finish. Thirty percent of new companies fail in the first year, and 50% fail within 5 years. Second time entrepreneurs have a higher success rate than first timers. Programs like Ycombinator, TechStars, Stanford Startup Labs, and other incubators greatly increase the chances of success.
Failure is Experience - When I travel the world speaking to entrepreneurs I tell them that in America we don't use the word "failure", we call it experience. At Google we believe that "achieving 60% of the impossible is better than 100% of the ordinary". We set impossible goals and shoot for them because it creates a whole different mind set. Think about the trajectory required to hit a target at 1,000 feet versus a target at 100 feet. That difference in trajectory, and thinking, will create a much better result than aiming for 100 feet. That is a fundemental difference in philosophy that drives us towards success. Failure is not viewed as shameful, and will not prevent you from achieving future success.
Mentorship matters - Maybe Startup America should devote some of their program to mentorship programs and incubators that convert more start-ups to "finish-ups". Just increasing the success rate of existing startups by 10% would create millions of jobs and stimulate local economies. We should encourage experienced entrepreneurs to help new startups through programs like SCORE (Service Corp Of Retired Executives) and programs like Ycombinator and TechStars. We should celebrate and honor people who take the time to mentor startups and help them succeed.
Why isn't there the equivalent of The Oscars or Emmys for entreprenuers and mentors? The closest thing we have is The Crunchies. Great, but lets take it to the national stage, and even international stage and celebrate entrepreneurship everywhere. Aim high! Hey, Steve Case and Scott Case, are you in?
Don Dodge is a Developer Advocate at Google. You can find this post as well as additional content on his blog called: Don Dodge on The Next Big Thing. You can also follow Don (@dondodge) on Twitter by clicking here.