In Wall Street Journal op-ed: New Business, Not Small Business, Is What Creates Jobs, Kauffman Foundation senior execs Carl Schramm, Robert Litan and Dane Stangler announce their latest report on small business job creation.
The report sorts out small business job growth fiction vs. reality.
It turns out that “nearly all net job creation since 1980 occurred in firms less than five years old.”
No wonder start-ups generate so much [intoxicating] fun. In fact, researchers report that “of the entire pool of new jobs added in 2007 (roughly 12 million), about two-thirds was generated by these young companies.”
While the report is exceptionally well written (and filled with terrific graphs for anyone—like me—who sells to small business), their policy recommendations are off-target.
Here’s a copy of my response and a call to arms for Geeked-out Salespeople…
Carl, et al: Terrific insight… that *new and growing* businesses are the real fuel of economic growth (cf., small businesses in general). Thank you for that important clarification.
Your conclusions, though, leave out the most critical element.
While you present good suggestions (welcoming immigrants, unleashing professors, access to capital, sarbox exceptions), they will do little to break the enormous inertia preventing entrepreneurs and their breakthrough ideas, patents and processes from ever reaching the point at which their [start-up] companies are able to create jobs.
Having worked for and with hundreds of venture-level firms and each of their entrepreneurs, the single biggest contributing factor choking the conversion from entrepreneurial idea to commercialization (and jobs) is lack of customers. Pure and simple, if you can’t create a customer (or in the case of Twitter: a registered user), your idea dies.
Without customers (and the revenue they create) investors won’t invest, IPO’s won’t occur and patents become worthless (fyi: 60,000 patents expire each year… so we really don’t need more patents).
No doubt, the ability to create customers (a/k/a selling) is critical to any firm. But for startups, it is their literal lifeblood.
But given this linkage, it is exasperating to find so little sales training or formal education available. At which institutions do engineers (and for that matter, professors) learn how to sell? I cannot list 5 institutions in the US that provide the kind of bare-metal selling necessary for taking early-stage products (i.e., working prototypes) to market.
Perhaps you’d consider moving this to the top of your list at the Kauffman Foundation. It would be consistent with the realities of entrepreneurial growth and be money and time well-spent.