Barack Obama Loves Startups: New Federal Office for Early-Stage Entrepreneurs

http://www.readwriteweb.com/readwritestart/2009/09/barack-obama-loves-startups-ne.php

by Anon84 • 17 years ago

48 69 17 years ago

readwriteweb.com

jdminhbg• 17 years ago

Retitled: Barack Obama Loves Federal Offices

mrshoe• 17 years ago

Or: Barack Obama Loves Green Tech/Alternative Energy Startups

I don't think he cares about your social-video-sharing-for-cat-owners startup.

ckinnan2• 17 years ago

Do we really think that the Commerce Department can run a venture slush fund without political influence and outright corruption? This is not the responsibility of the U.S. government, it is another avenue for the political class to expand their control of the economy.

heuristix• 17 years ago

I don't think the announcement of a new govt. office is something to be proud of in and of itself. But as a counterpoint to your argument, the SBIR program, also run by the govt. seems to be working really well for startups I personally know without political influence or corruption. I wouldn't say it's the most efficient funding source but it is definitely a net positive.

jhancock7• 17 years ago

Every adult U.S. citizen is a part of the "political class". The greater the involvement, the more you reduce corruption and even out influence. There is no other way for a Democracy to work properly. This is not limited to the paltry amounts being thrown at entrepreneur programs, but to the larger amounts in things like Social Security, Defense spending, etc...

Although I'm not a fan of excess Defense spending, you would be well advised to remember that the Internet would not exist without it.

known• 17 years ago

On the positive note, I believe this is the way to enforce http://plato.stanford.edu/entries/affirmative-action/ for the denied and deprived sections of society in America.

cma• 17 years ago

ARPA?

padmanabhan01• 17 years ago

This is basically taxing the citizens to pay for the expenses of a private company. High time someone defines how and how not a Government can use/abuse tax payer's money.

dschobel• 17 years ago

if only there were some document which explicitly lays out the responsibilities of the federal government.

darn those short-sighted founding fathers!

jhancock7• 17 years ago

Here's a link to 5 people you may want to tell this to: http://www.federalreserve.gov/aboutthefed/default.htm

Its my understanding they are buying out "assets" from private institutions in the trillions $$ these days.

JCThoughtscream3• 17 years ago

So, wait, the federal government will actually actively help and support startups.

...

No, drawing a blank. Can't find anything wrong with this at all. This is actually how federal money should be spent, after all - investing in capital. Even if you view this through a lens of cynicism, the fact still stands that companies'll probably survive and thrive a lot more with governmental help than without. Which benefits everybody - more people make more money, which means they pay more taxes, which means the government can fund more startups, etc.

I like it. I hope it works out as intended. This is definitely one of the few inarguable ways to get an economy moving along.

pelle2• 17 years ago

Europe in particular but also states, cities and regions in the US are filled with these types of programs designed to promote startups. When I was younger I've been in them both in Denmark and in England.

I'll go out on a limb and say that they have not helped one successful startup, who wouldn't have made it on their own.

The real benefit of these programs is that politicians get to say they are being proactive about helping startups. All we really need is less red tape and general meddling in what we do.

ryanwaggoner3• 17 years ago

I'll go out on a limb and say that they have not helped one successful startup, who wouldn't have made it on their own.

Out a limb is right...come on, this kind of statement has no place in an intelligent debate. It's not even anecdotal, just baseless speculation.

philwelch2• 17 years ago

Why is federal money--which is distributed based upon bureaucratic and political whims--better for investing in capital than private investment, which has incentives to invest as profitably as possible? Wouldn't it work just as well for the government to lower taxes (or to spend more on public goods, i.e. healthcare) and allow that money to do what it was going to do anyway, more efficiently?

JCThoughtscream3• 17 years ago

To put it simply, direct investment plays a lot better with business owners' incentives than lowered taxation.

It's a false corollary to expect lowered taxation to immediately equal greater spending - especially in times of economic flux, that sort of government action mainly encourages /hoarding/ behavior, which isn't good for the economy's health.

On the other hand, direct investment in startups gives an immediate incentive to spend - spend and grow.

Spending more on public goods like health care helps - the money we'd save with a public option is obvious to anybody that isn't a far-right ideologue. But that's /saving/ wealth, not /creating/ wealth. When you finally snip away all the excesses and waste generated by the current model of health care coverage, you still need something to pay for the cost of the improved system itself.

anigbrowl2• 17 years ago

http://www.commerce.gov/NewsRoom/PressReleases_FactSheets/PR... (...) Office of Innovation and Entrepreneurship The mission of the Office of Innovation and Entrepreneurship is to unleash and maximize the economic potential of new ideas by removing barriers to entrepreneurship and the development of high-growth and innovation-based businesses. The office will report directly to Locke and focus specifically on identifying issues and programs most important to entrepreneurs. Working closely with the White House and other federal agencies, this new office will drive policies that help entrepreneurs translate new ideas, products and services into economic growth. The office will focus on the following areas:

  Encouraging Entrepreneurs through Education, Training, and Mentoring
  Improving Access to Capital
  Accelerating Technology Commercialization of Federal R&D
  Strengthening Interagency Collaboration and Coordination
  Providing Data, Research, and Technical Resources for Entrepreneurs
  Exploring Policy Incentives to Support Entrepreneurs and Investors

It doesn't sound much like a fund to me, more like a clearing house or head start program for the self-employed.

The National Advisory Council on Innovation and Entrepreneurship will ... include successful entrepreneurs, innovators, angel investors, venture capitalists, non-profit leaders and other experts (...)

They have been influenced by this detailed and somewhat surprising report produced for the Small Business Administration in 2004 ('A National Assessment of Entrepreneurship and Regional Economic Growth and Development'): http://www.sba.gov/ADVO/research/rs256tot.pdf

arithmetic2• 17 years ago

Let this new office get serious about founder's visa and immigration issues, and then we'll see if there's any truth to all the startup love.

tptacek5• 17 years ago

Why is that? There appears to be nothing resembling unanimous support for "founders visa" among entrepreneurs.

arithmetic2• 17 years ago

I'm a little suprised by your reply - I haven't seen an entrepreneur say "We don't really want a founders visa" either.

We've seen several threads on news.ycombinator on the need for a "founder's visa" and immigration reform. The current H1 visa system is cearly busted. If there is going to be a new office set up for early-stage entrepreneurs, this is certainly one of the important tasks at hand for the federal office.

pg5• 17 years ago

There's pretty near unanimous support among people who care about the issue at all. Startups that have immigration problems mostly would like such an option. And to those that don't, what difference would it make if another few thousand (mostly smart) immigrants were allowed to come to the US?

btilly2• 17 years ago

In http://www.paulgraham.com/5founders.html Paul Graham brings up the testimony at http://app.cypress.com/portal/server.pt?CommunityID=201&... for why another attempt by the Federal government to direct money towards high tech innovation was counterproductive. That testimony is as relevant today as it was in the early 90s.

I do not fully agree with that testimony, but I completely agree with the point that if taxing the private sector to raise money to fund startups only works if the public sector is better at predicting success than the private sector. And I think the public sector is worse at that.

How should this affect government policy? Let's take green energy for my example.

First I accept the proposition that basic research benefits from government funding. Why? Because commercialization timelines from are long, research benefits from sharing knowledge, and free sharing of knowledge causes economic benefits to accrue to different people than the ones who did the research. Therefore capitalistic incentives don't work so well. So I'm behind NSF grants into basic science.

Second I accept that carbon fuels have significant externalities and cause global warming. By all means have some kind of carbon tax, or a cap and trade system to make oil more expensive to use. Economic theory is solidly behind this method of making private companies properly account for externalities.

And that is where the government should stop. If the price of gas is high enough, consumers will demand that companies meet strict fuel standards. Additional fuel standards regulations are an admission that the incentives are wrong. If the economic returns are guaranteed to be there, then the free market will throw up solutions. Direct investment in green technologies is an admission that the economic incentives are not there for alternative energy, and breeds companies that are dependent on that direct investment.

jbarciauskas• 17 years ago

"I completely agree with the point that if taxing the private sector to raise money to fund startups only works if the public sector is better at predicting success than the private sector. And I think the public sector is worse at that."

I can think of a number of flaws in this logic - for one, the public sector may not be as good at predicting winners and losers, but public investment can still be valuable if the overall level of investment is too low. The comparison is not strictly with the same amount of money being invested by the private sector - it is also the same amount of money being used in non-startup investment ways in either the public or private sector. Additionally, while the private sector will exclusively target companies with the greatest potential return on investment in cash terms, opportunities will be lost where the social benefit of the startup does not translate directly in to revenue, cash and profit.

That's assuming that the private sector is in fact better at picking winners, and as I allude to in my last point, that their definition of a "winner" is the most beneficial, neither of which are proven.

btilly2• 17 years ago

If you're measuring success by GNP, then it is trivial that the government taxing then spending on something is only worthwhile if the government is making more effective decisions on that something than the taxed people would have through the free market.

You're right that that reasoning ignores social benefits other than GNP. However my experience suggests that it is easier to claim social benefits than measure them. And when you can't reliably measure a benefit, delivery tends to be very inefficient.

That isn't to say that government can't meet that bar. Economic theory says that private enterprise deals poorly with externalities. It is hard for a private enterprise to recoup the value provided by national defense, police, clean water supplies, public health inspectors, etc. For that reason it is economically efficient for us to be taxed so that the government will supply us those services.

However startups are a case where a person who is good at picking then nurturing entrepreneurs recoups the value from doing it well. Therefore there is every reason to believe that free enterprise does that job well, and so no reason to believe that the government is likely to do it better.

In that situation underinvestment is a signal that the market doesn't believe that the returns are there. Artificially improving those returns therefore should stimulate investment. And I believe would do it more efficiently than attempting to directly pick winners and losers.

jonallanharper• 17 years ago

Seeds of fascism, my friends.

Let me guess... after I receive funding from GovCo venture fund, they get to strong arm my company with infinite stipulations and rules about diversity, salary caps, mandatory participation in government sponsored community service, or whatever the vote-buying scheme du jour is.

parse_tree• 17 years ago

Why'd this get down voted? What he describes in paragraph 2 is not far from what happens with a lot of the current government ventures into the economy.

E.g., private company's wishing to get in on government contracts need to publish their "diversity policies" to ensure they are diverse enough (I guess):

http://www.personneltoday.com/articles/2008/06/19/46401/priv...

kingkawn3• 17 years ago

because he started with inane shit; "seeds of facism"

dejb• 17 years ago

There are countless first world countries that have programs like this and you'd have to be batshit insane to start calling them facist nations. Maybe the people doing the voting down are from some of those countries. In Australia we have a programs like this.

ColemanF• 17 years ago

A bureaucracy meant to increase entrepreneurship...maybe he should make an Office of Government Non-Intervention, too.

lehockib• 17 years ago

Just out of curiosity will this program fund the artists in America? I ask because as a ceramic artist I work out of my studio in my barn. I give an "Art for Kids Program" that was created to be affordable to children in the Myakka City, Florida area. And, even still at the price of $10.00 per 3 hour class, they still cannot afford the program.I started the program because Myakka City is approximately 30 miles away from the nearest business establishment a child can go to for entertainment. The program is meant to get children off the couch, away from video games, and up from the computer doing something creative. I have been lucky enough to get a few businesses to donate clay, glazes and tools for the kids to work with, but the problem still remains that they can not afford the $10.00 to attend with today's economy. There are programs out there for artist, but an artist has to be nominated for the award, or the awards are so small that it barely pays for studio equipment. It is a worthy program of sponsorship, but then the problems remains as to, how do I afford to pay employees, and provide insurance for them, if the grants available to artist are so small. Read more about the "Art for Kids Program" at http://www.ladyhawkofheartland.spaces.live.com. Or am I off my rocker, for wanting help with a program that would open the minds of young children, and cause them to challenge themselves to do better and achieve more. I am thinking that the program shows Entrepreneurship, or am I incorrect in my thinking. Blondell Lehocki.

Barack Obama Loves Startups: New Federal Office for Early-Stage Entrepreneurs

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