

Startup America -- Dead on Arrival - terrisv
http://steveblank.com/2011/02/08/startup-america-dead-on-arrival/

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bhousel
Steve is absolutely right that government doesn't understand the challenges
facing startups.

For example, I'd put "access to affordable health care" above "access to
capital" as a barrier to getting a small business or startup off the ground.
10 years ago I paid $75/month for comprehensive health care, today I pay about
$1000/month for bare bones coverage. I can't even think about expanding with
those costs. (For anyone wondering, this is in the NYC area).

I think it's time to stop talking startups being "Ramen profitable". My
cofounder and I are stuck in our consulting day jobs until our startup becomes
"health care" profitable.

~~~
sachinag
I've said it before - it's insane that more startups don't locate in
Massachusetts in the early days. The Mass Connector can get you pretty decent
coverage for around ~$250 a month. Live there, take the Megabus down to NYC
for NYTM and funding, and come back. Sure, it's cold, but it's not the worst
place to be otherwise.

~~~
bhousel
Yeah, I have thought about that, Boston and Philadelphia aren't that far.

But stop for a minute and think - we are seriously talking about commuting 2
hours to save a few hundred dollars a month on health care. Why?? Why do we
even need to have that conversation? That's how broken things are.

I'm a non-smoking 34 year old _marathon runner_.. I go to the doctor once a
year, if that. Companies should be fighting over the opportunity to insure me.
It shouldn't be the #1 reason I can't grow a business.

~~~
dpritchett
Parent poster wasn't saying to live in Mass. and work in NYC, just that NYC is
a bus ride away for important things like meetups and funding trips. Live in
Mass., work in Mass.

It's great that you're healthy but business growth is going to involve taking
_other_ people on and I for one am not taking a job without health care while
I have two other people depending on me. A single major health issue could
bankrupt me!

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shmulkey18
“The curious task of economics is to demonstrate to men how little they really
know about what they imagine they can design.” -- F. A. Hayek

The best thing that the US government could do to help start-ups (and other
American businesses, for that matter) is to stop trying to help and get out of
the way.

Everyone is influenced by incentives. The primary incentive of politicians is
to get re-elected and the primary incentive of government bureaucrats is to
protect their jobs and increase their power. This is natural and does not make
either group evil; they are simply trying to do what's best for them. However,
there's very overlap between these incentives and those which promote wise
economic policies.

Even if we assume a selfless government guided only by some desire to do what
is best for the economy, there is no reason to believe that government can
wisely guide the anarchic and Darwinian process of market competition, and
much reason to think that they can not.

For a profound analysis of the underlying knowledge aggregation problem which
dooms attempts to guide the economy, see Hayek's "The Use of Knowledge in
Society" (<http://www.econlib.org/library/Essays/hykKnw1.html>).

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trustfundbaby
I look on government _programs_ to help startups with cynicism for exactly
this reason ... the guys who put things like that together often have little
idea what the guy on the frontlines is dealing with.

Personally ... if Obama announced that Startups would only pay 10% in taxes
(or something like that) for x amount of years and gave us access to (heavily
discounted healthcare plans) ... I'd be content.

As it is currently structured, Startup America doesn't factor into my life one
bit ... and I'm working on a startup.

~~~
rdl
SBJA pretty much does this -- accelerated expensing AND 0% capital gains if
you hold for 5 years. I think they've done a bad job marketing it, but it's
amazing.

All they need to do to encourage some kinds ("scalable") startup activity is
to get out of the way. For supporting random small business startup, I think
enhanced loan packages, education, etc. can help -- maybe partner with
organizations like SCORE. I'd also like to see "start your own business"
assistance for separated military personnel.

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damoncali
I've read several articles about Startup America, and I still don't know
exactly what it is or how I can use it.

~~~
mildweed
I've searched their website high and low, and I can't find how either.

~~~
clare
One example I ran into is "techstar network" hosted by techstar
(<http://www.techstars.org/network/>) which is a partnership program of
Startup America. It is still a little bit vague. But my understanding is that
the startup America is a loosely connected network of orgs each working on its
own ways to nuture entrepreneurship in US.

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watchandwait
"public/private initiative" == "crony capitalism"

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wheaties
The biggest fear people should have is that in order to promote that they're
doing a good job, funding will be made available to non-viable companies. You
know the type, the kind that didn't pivot, poke, prod, or explore the
marketplace in a way to ever become profitable.

~~~
pjkundert
What? A government program that encourages malinvestment?

Say it Isn't So!

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petenixey
Whilst Steve Blank's cynicism about this programme may well be very valid I
don't understand why he wrote this post.

I can understand the frustration of a disempowering mandate but it's
guaranteed that nothing will change if people like Blank do not inject their
influence.

I feel he should have either accepted the role and made what difference he
could or not done so and kept quiet. Rejecting the CEO role and badmouthing
the project from his own soapbox seems churlish.

~~~
yummyfajitas
I disagree.

Criticizing the government when it is implementing a program poorly and
wasting OUR money, is an important part of democracy. Blank is performing a
valuable public service: telling the people that our money is being wasted,
and giving the government a suggestion on how they can improve their efforts.

Steve Blank has done his part. If the government ignores this (as you suggest
they almost certainly will), they are failing to do their part. Steve Blank
doesn't owe the government his leadership.

~~~
GBond
Second this. Specifically he is pointing out that without the proper
definition of a startup, this is merely lip-service that hits the right amount
of buzz words for the media to regurgitate.

Why is he posting this? My guess, he _genuinely_ cares to see entrepreneurship
thrive in America and can't bare to see halfhearted attempts with hidden
agendas.

My reaction was the opposite when I read his post. I thought it is pretty
ballsy for someone like him to to go against the grain like this as he is
likely speaking out against peers and colleagues. Status quo for Blank as he
has written posts critical of VCs when deserved.

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damoncali
Another big one that isn't getting attention: the tax hell that you find
yourself in when you exercise your options.

It's absolutely insane that people must endure a tax bill based on paper gains
that in many cases will not materialize.

It devalues options and therefore increases the cost of starting a company.

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joelandren
I have trouble believing that anything that has Steve Case's leadership will
be a failure.

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stretchwithme
The last thing startups need is help from the government.

Innovation is an iterative process involving understanding needs, what people
will pay for and what technology can do.

It involves real risk for the innovator and ultimately the customer decides
success.

Many things government does hide the true costs of some things and this leads
to distortions and products and services that may work in the distorted
environment, but won't sell abroad.

Truly successful products don't need "help" getting started, help that often
stays in place for decades. All this sort of help does is bleed resources away
from things that just might be viable if non-viable technologies had to
compete on a level playing field.

For example, the electric car. Can't make it on its own without lots of
subsidies. Its too early. Someday batteries will be there and it will win, but
its a waste of resources now to put it on life support.

If government decides who gets investment, entrepreneurs will be replaced by
lobbyists. I can't see how thats good for America.

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wslh
I love Steve Blank, because he is a sincere, no bullshit and no hype guy.
There is anybody like him?

I don't like the general entrepreneurship mantra, feel like lemmings jumping
from the mountain.

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mildweed
I am interested in hearing more about these four types of entrepreneurship and
analysis on each.

~~~
arrel
Steve Blank has a lot of blog posts about entrepreneurship and the different
types - searching through his old posts would turn up good info. I also
recommend reading his blog from the beginning. It's a great read, not too long
(a longish book, total), and covers a lot of ground about entrepreneurship.

