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Want jobs in Athens? Fix our culture.

We talk a lot locally about creating more, and better paying, jobs in Athens, yet it feels like we are going in circles to find a solution when the answer is clearly right in front of us.

Luring big companies to a city is a zero sum, shell game. It does not create net new jobs. If you want to create jobs in Athens, startups are everything. A recent study by the Kauffman Foundation found that most net new jobs in the United States since 1977 have been created by startups.

So, what is Athens doing to support startups?

Even with overwhelming data that startups are the economic engine of job creation in the United States, Athens spends all of its financial resources and energy focused on strategies that are proven not to work over the long term in a repeatable fashion.  Why do we do this?

It would seem the simple answer is that focusing on big company job growth is measurable.  You spend $X dollars and create X jobs.  But it’s not enough to measure.  We need to demand results.  If it is taking thousands (or hundreds of thousands) of dollars to lure big companies locally, wouldn’t that money be better spent on organic initiatives? Particularly when all the data available proves that startups create net new jobs.

Available data proves that startups create net new jobs, unlike wooing big corporation, but the results of supporting startup communities are not linear.  As a city, if we’re going to support entrepreneurs, risk takers, and innovators, we need to take a long-term view.

In his Boulder Thesis, Brad Feld claims a city should look at least 20 years into its future. Based on the successes that Boulder has achieved, it would be smart to listen.

If results are not linear, what needs to happen locally to show more local support for startups?  It starts with changing the culture.

A startup community needs leaders and feeders.  The leaders should always be entrepreneurs. But, more importantly, we need feeders that play an active and engaging role in supporting startups.  Feeders are everyone from government officials, to lawyers, to accountants, to landlords.

Paul Graham, founder of Y Combinator, analyzed why startup hubs work and came to a simple conclusion: The default stage of a startup is death. To overcome this, a city must have a culture that normalizes risk and is willing to take chances.  Simply put, we need to create an environment of risk for both the leaders and feeders in the startup community.

Since starting Four Athens three years ago, we have seen a rapid rise in the number of people undertaking entrepreneurial endeavors (startups and otherwise).  Daily, these founders connect with one another to help each other find talent, funding, customers, and answer the simple questions that plague the launch of a company.  The risk of failure is still incredibly high, but having created a support network of other entrepreneurs has allowed each of them to incrementally improve their chance of success.

Unfortunately, the culture of risk is not pervasive in Athens.  As Paul Graham says in his post, “In most places, if you start a startup, people treat you as if you’re unemployed.”  This is certainly true in Athens.  

Worse, many existing businesses (lawyers, accountants, landlords) in Athens are set up to discourage new business growth.  If you don’t have the money to pay full fees, many service providers simply won’t deal with you.  This shortsightedness not only stunts new business growth, it prevents those existing businesses from sharing in future success, simply because they are not willing to take a calculated risk.

Not all feeders in our system are risk averse.  At Four Athens, we work with phenomenal lawyers, designers, accountants, developers, and landlords who have taken risks to support the startup community.  Some of them are already reaping benefits of more, and higher paying, business.  Most understand that it takes time.  And all those that we continue to work with have given without the expectation of something in return.

It is this point that is most salient and lacking in Athens.  To quote Paul Graham again, “one of the most distinctive things about startup hubs is the degree to which people help one another out, with no expectation of getting anything in return.”

I’m not arguing for an unrealistic utopia where everyone gives their services away for free, but if we, as a community, collectively decide to devote 5, 10 or 15 percent of our time, energy and skills to helping others get started, imagine the number of jobs that could be created as a result.  All of us can support risk takers, and no special skill sets are required. With a minimal sacrifice on all of our parts, we can fundamentally change the size of the pie, instead of arguing over how to slice the existing pie.  The $100/hr discount a lawyer gives to help a startup launch will pale in comparison to the fees that same lawyer may collect from a company with $50 million in revenue.

This model has worked elsewhere.  Large law firms in Silicon Valley routinely discount, defer, or otherwise minimize fees for early-stage companies.  Landlords in Chattanooga have given space to companies just getting started at discounted rates – those startups are now sparking a renaissance in Chattanooga, driving millions in capital, jobs, and acquisition offers into the city.  The city of Birmingham teamed up with the University of Alabama – Birmingham, to create a space for startups which annually drives hundreds of millions in economic impact.

If we want to create jobs in Athens, the solution is right in front of us.  Start finding ways to take risks that support entrepreneurs at startups.  Entrepreneurs can’t just figure everything out.  They need your help to succeed.  Mark Suster, a prominent venture capital investor in LA, recently wrote, “If a society shuns people for TRYING you discourage people from creating truly breakthrough innovation out of fear of failure.”

The underlying culture of Athens – a creative, exploratory community – is ripe for innovation. We have all the talent we need to create big companies.  It has not yet come to the fore because we have shunned our risk-takers.  Those who take risks have unlimited opportunity.  If they are not supported in their existing environment, they will move.  We should be doing all we can as a community to fight to keep the risk-takers here.

Ultimately, they are the ones that create jobs.  And if, as a community, we want to solve our issues of poverty, underemployment, and stagnation, we need more jobs.

jim
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