Richard Florida
by Richard Florida
Fri Jun 12th 2009 at 11:15am UTC

Startups Are Spiky

Paul Graham speculates that startups may herald a new era of political economy:

Startups may represent a new economic phase, on the scale of the Industrial Revolution. I’m not sure of this, but there seems a decent chance it’s true. People are dramatically more productive as founders or early employees of startups–imagine how much less Larry and Sergey would have achieved if they’d gone to work for a big company–and that scale of improvement can change social customs.

He notes that startups are highly clustered in certain cities:

Startups are a type of business that flourishes in certain places that specialize in it–that Silicon Valley specializes in startups in the same way Los Angeles specializes in movies, or New York in finance.

And he’s concerned about what this means for society:

If so, this revolution is going to be particularly revolutionary. All previous revolutions have spread. Agriculture, cities, and industrialization all spread widely. If startups end up being like the movie business, with just a handful of centers and one dominant one, that’s going to have novel consequences.

The spiky nature of our era – evident in everything from startup clustering to rising economic and geographic inequality – is among the most critical issues of our time. The crisis creates the opportunity to address it. But for some reason, U.S. and global policy-makers are unable or unwilling to take it on. The consequences will surely come back to haunt them sooner or later.

3 Responses to “Startups Are Spiky”

  1. Jarie Bolander Says:

    It is true that startups are more productive. This comes, in large part, from the focus they have to have. Focus is the critical ingredient that allows for more productive employees. Along with focus, is trust in the individual. When employees are trusted to focus on getting their job done, they excel. Big corporations don’t and can’t necessarily do that. The burden of multiple focal points makes it impossible to truly trust an employee with capital and resources.

    The problem with trying to spread the startup culture is the critical mass it requires. You have to have the right mix of culture, capital (human and money) and education. Not all places can commit, nor do they have access, to all of these critical resources. Figuring that out will allow it to spread.

  2. Jim Roberts Says:

    Here is an article/op-ed I wrote about helping startups in your community.

    Admittedly, it is not rocket science but does require some infrastructure, tolerance for risk/failure and ambition.

    I have started two successful entrepreneur councils in North Carolina.


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