Wednesday, July 29, 2009

What Do Outside Entrepreneurship Experts Think About Idaho?

I think the discussions about where Idaho needs to go has been circling the real questions. Back in April, Utah was referenced as a great model for us, though skeptics point to the top-down support they received (including hefty financial support.)

HOWEVER, there is a great deal that we can learn from them. Yes, they had some terrific advantages that persist today, but what we need to focus on is: What they DID with what they had. The heart of what made them so effective had everything to do with making their culture more entrepreneurial and making their system remarkably entrepreneurial.

Strategy , not Tactics
I've been able to get observations from outside experts (a fair subset of the experts) about what Idaho is doing. One key observation of direct relevance here is that we have focused far too much on tactics – throwing out ideas that we'd like to see happen. However, they do not see that we have started with first principles, that we have not done a good job of looking at the strategic level. Part of that is that we don't have much expertise that understands the key strategic-level phenomena at the heat of a truly entrepreneurial economy. The Dept of Commerce's 'Project 60' is a nice first step and the entrepreneur-heavy makeup of the Idaho Innovation Council is another.

Step One: Understand what characterizes a successful entrepreneurial economy.
Step Two: Identify the key policy levers that help us grow an entrepreneurial economy
Step Three: Only then can we begin looking at ground-level tactics.

Here's a 'big picture' item that we should focus on: Knowledge Spillover. To be of any value, knowledge must 'spill over' into the marketplace. How does knowledge get turned into something of value? We have policy levers at our disposal to cost-effectively reduce barriers.

Another: Entrepreneurial economies grow bottom-up, one entrepreneur at a time. Technology commecialization is not driven by top-down institutions, Institutions can faciliate & can remove barriers but it's encouraging the entrepreneurial spirit of Idaho that will make or break the effort.

Think Strategically (not tactically)
Let me ask the question a different way - we seem fixated on tactics (what worked or not in a specific setting) when we really need to step back and look at the big picture.

The big question is: “How do we get more ideas to market?” (Jason Stolworthy noted back in April that it need not even be "Idaho" ideas.) This is more than just developing new technologies, this is about changing mindsets. Ideas we have, but that's not remotely enough to grow innovations – you need entrepreneurs. The real question is how do we do THAT.. and we do know how to do that. Yet, that has rarely been on the table. Why not?

Creativity + Entrepreneurship = Innovation
The best way to promote Idaho innovation is to grow a more entrepreneurial Idaho. A more entrepreneurial climate is almost always the scarce commodity. The dirty little secret of innovation is that the invention part is never the bottleneck, it's the entrepreneurial side where most places fall short.

60 Spinouts in Under 4 Years
At the April meeting, mention was made again about the Utah model. If you want a primer on what they've done, couched within the bigger picture, please look at - you can see the implications for Idaho. It's easy to dismiss what the U of U did because of their blessings - especially the budget surplus that enabled a major cash influx. However, what made Utah so successful was that they changed the climate to become much more entrepreneurial.

What that required will be very difficult for Idaho, but not because of any great cognitive complexity. It will be difficult because it requires a sea change in how the whole system operates. In a nutshell, here's what they did that WE could do. However, that also means we CAN change more quickly than we realize!

The Bully Pulpit - have all the top leaders beat the drum for making the system more entrepreneurial. Idaho's leaders will do this but only if/when they have faith in the key players. Do the things below and Idaho's leaders *will* step up. You heard Butch at the initial IIC meeting being very clear that he sees entrepreneurs as the answer. Legislative leaders agree completely. Why aren't we building on this?

No More Amateur Night - DIY is great for building your deck but not for building a state innovation system. Expertise from outside the state is likely necessary (and local wannabes need to let the experts drive the bus.) Outsiders look at Idaho & wonder why we've allowed local pseudo-experts to have any say at all. Just because they have the job title doesn't mean they get it.)
A huge part of any successful development effort is to start with strategy. It feels like 99% of what talk about are tactics. Strategy first, then tactics. (My next posting will address the key strategic elements that we must consider.)

Focus on Applied Research - commit to putting new dollars into applied research. The fetish for basic research is a hindrance (and I'm a basic researcher myself).
Look at the example of Ireland... and New Mexico and Utah and North Dakota and...

Put Entrepreneurs at the Heart of the System - make it not just entrepreneur-friendly but that having entrepreneurs heavily engaged throughout the system needs to become the norm.
* Open every door imaginable to the entrepreneurial community; make it clear they are more important.
* You will need to grow entrepreneurs - in the system and throughout the state (in Idaho, we'll need to grow entrepreneurial communities as well.)

Grow Entrepreneurs Everywhere – entrepreneurial citizens, entrepreneurial organizations (nonprofits too) and entrepreneurial communities. Why else would youth entrepreneurship programs be the #1 no-brainer in economic development these days?
* Grow entrepreneurial human capital – we know how to do this... cheaply.
* Grow entrepreneurial social capital – we know ho to do this...cheaply.

Signal Persuasively that the Climate HAS Changed
* Show that we fully understand that market pull always trumps technology push. No matter how cool and sexy the features of a technology might be, if features don't translate into customer benefits... we will never make progress.
* For example, Utah signaled the new culture by banning the phrase "tech transfer" - henceforth they want to say "technology commercialization".
* Don't go piecemeal - develop and deliver multiple best-in-class programs so that every member of the ecosystem will see credible evidence that things are indeed different.

Align Resources to a Strategic Road Map
* What makes an economy entrepreneurial? What are the critical characteristics? Once we have that, we can ask what are the policy levers available to us? Experts, national & global, can and should help us with that. Then and only then does it make any sense to talk tactics. But that's actually the easy part IF we listen to the experience & expertise available to Idaho.
* Once we have the strategy & likely tactics in place, then we have the tricky part: Aligning the resources to the road map. Odds are that most 'players' will not be doing what they want to do or feel entitled to do.. but they WILL be doing what adds the most value to the process. (Think 'distinctive competence' not 'core competence.')
* INL led the charge years ago when Idaho developed its initial list of competencies and harped on the need for alignment. We need to honor that strategic intent and make all of this happen.
* This might be a good place to start as Idaho is already working on a 'summit' with 8 key industries.

** Most important: Demonstrate that we "get it" - that everyone involved in designing and delivering programs understand how entrepreneurs think. Doing all of the above will send that signal - to the experts we want (and need) to help us AND to Idaho's entrepreneurial community.

Let me add my usual plaintive cry: How can I help? How can I help Idaho to "Entrepreneur Up!"


Blogger Frank said...

Sounds challenging, but your commitment comes across loud and clear. I like the sounds of listening to outsiders, to get outside the box, but outsiders could miss some key points. When I was a young mgmt consultant I learned that the lessons you learn on one project won't even apply to the next. So much for accumulated wisdom in that context.

And what about returns for investors? Can entrepreneurship scale as you envision during such trying times for angel investors and VCs? Goldman Sachs and Visa are making it hand over fist, but the rest of us are waiting longer for exits; risk capital is under stress. Yet I can hear some say, press on anyway and when the economic pendulum starts swinging the other way you'll be well prepared.

12:08 AM  

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