When StartupBritain launched, there was a lot of grumbling. Most of the complainers had a their own definition of "startup", and didn't find StartupBritain useful to them specifically.
I later had a chat with Oli Barrett, one of the founders of StartupBritain, and he confirmed that in "startup", they included all new entrepreneurial ventures, whether technological or not.
We each tend to have our own definition of this word, and as Steve Blank explains (and has explained before), there are several types of entrepreneurial contexts, and each has different rules, different wisdoms, different goals and different methods to get there.
In this new article, Steve proposes that this is a major reason why governments fail to help startups - because they try to create a one-size-fits-all system and that never works.
He concludes with an example of a country that did successfully bootstrap their entrepreneurial culture through government funding: Israel and its Yozma program.
To date, Israel is only country that has engineered a successful entrepreneurship cluster from the ground up. It's Yozma program kick-started a private venture capital industry with government funds, (emulating the U.S. lesson of using SBIC funds.), but then the government got out of the way.
In addition, the Israeli government originally funded 23 early stage incubators but turned them over to the VC's to own and manage. They're run by business professionals (not real-estate managers looking to rent out excess office space) and entry is not for life-style entrepreneurs, but is a bootcamp for VC funding.
Unless the people who actually make policy understand the difference between the types of startups and the ecosystem necessary to support their growth, the chance that any government policies will have a substantive effect on innovation, jobs or the gross domestic product is low.
As someone who is directly involved in getting government funds to help startups, I agree that this would probably be the best way for government to help. In the UK, there is definitely a private funding gap, and although grants and tax credits do help, they don't compare to a healthy, vibrant investment community.
We have, in fact, discussed this with people, for example at the UK's Technology Strategy Board. However, I suspect this type of "let's just fund the VCs" approach is not going to happen any time soon in the UK.
For now, we'll have to make do with grant funding. If you need a hand with that, feel free to have a chat with us.
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