It’s now been twelve days since the election, and the media has been squarely focused on the differences between the President and Congress, and why it will be so hard to accomplish anything over the next two years. We know that this frustrates all Americans, including those who are active Democrats and Republicans. And it is true that there are tough issues on which there is legitimate disagreement about policy, such as immigration and the Keystone pipeline. But there are also things, like greater support for research commercialization, and crowdfunding, that have been languishing for two years now without substantive opposition.
Washington has become maddeningly frustrating for entrepreneurs. Why? Because entrepreneurship is an area where this is actually far more agreement than disagreement between Republicans and Democrats. And yet, they still can’t seem to get things done. Across America, innovation continues to flourish in America’s labs, universities, startups and large companies in such important areas as life sciences, technology and energy. Participation in startup accelerator programs continues to grow year-after-year, even while entrepreneurship overall has been stagnant, according to the US Census Bureau. While elected officials are almost required to talk about innovation and entrepreneurship in their speeches now, they have actually left much to be done on the table.
Right before the election, on October 29, I saw proof that the energy and excitement of entrepreneurial America remains strong. At the annual awards dinner for the Boston-based accelerator, MassChallenge, over 1200 people from around the world celebrated the completion of the MassChallenge 2014 accelerator season. The audience included Boston’s traditional startup and venture community, as well as visitors from across New England, America, Canada, London, and Tel Aviv. The event celebrated the 128 startups that participated in MassChallenge and featured remarks from Eric Schmidt of
At a time when Washington leaders are nickel and diming important federal programs, MassChallenge is providing more and more prize money to its startups every year. At the awards ceremony, nearly $2 million in prize money was announced. MassChallenge itself, gives $1 million in unrestricted prize money to its top-performing startups – selected by some of Boston’s best-known entrepreneurs. In recent years, outside organizations like Microsoft, Verizon, Boeing, the John Henry Foundation, and the Commonwealth of Massachusetts have also used the MassChallenge platform to give prizes for targeted technology products and startups. This year, outside groups provide nearly $1 million in cash and critical partnerships to supplement MassChallenge’s funding.
One of the top prize winners, receiving $100,000 was Disease Diagnostics Group, which “utilizes magneto-optical technology to provide accurate malaria diagnoses in less than 60 seconds at 1/10th the cost and 100x the detection level of current solutions”, according to its website. And two of the winners, receiving $50,000 each, were Drinkwell, which is creating technologies to treat water in arsenic-laden areas; and SQZ Biotech, which is commercializing technology platform to get “virtually any material into a cell with a gentle squeeze”. All three reflect a trend for startups participating in MassChallenge to be more and more technologically sophisticated. We are not talking about kids building social media on laptops, but serious entrepreneurs addressing some of the world’s toughest challenges.
The other grand prize winner, also receiving $100,000, was Catie's Closet, a Dracut, MA-based nonprofit that provides clothing and basic necessities to students who are homeless or severely financially challenged. Their success marks the second year in a row that a top winner of the Mass Challenge competition, which attracts over 1000 applicants from around the world annually, came from Entrepreneurship for All, a non-profit accelerator focused on revitalizing the older gateway cities of Lowell and Lawrence, Massachusetts. The selection of Catie’s Closet reflects the importance of having feeder systems for entrepreneurship - the way EforAll is feeding MassChallenge; and more importantly, that high-growth entrepreneurship doesn't just come out of top universities and hip East Coast/West Coast cities, but can be found everywhere.
Over the next two years, Congress and the Administration can actually do a lot for the entrepreneurs coming out of Mass Challenge, and those everywhere. All they need to do is finish the work they already started. For starters, the SEC needs to complete the rules surrounding crowdfunding. How long does it take? I was at the White House when the America JOBS Act was signed in the spring of 2012, and yet two years later, crowdfunding remains in limbo and has yet to achieve its potential because of the regulatory hold up.
Secondly, Congress needs to re-authorize the America Competes Act. Simple re-authorization helps federal agencies to use prizes, challenges and fund innovation projects like the i6 Challenge. But there were also some important ideas in the Competes reauthorization that could have a profound impact on American entrepreneurship. For example, allowing federal research grant recipients to use a small percentage of their research funds for commercialization purposes. This strategic change, to create more economic value for our research dollars, has little opposition, but has not gone anywhere.
Finally, the Administration also has the chance to finish a project that will have long-term ramifications on the efficiency of government – the migration to the cloud. It may be the least sexy thing to discuss in the media, but every technologist understands the impact of moving the federal government to the cloud on efficiency, data analytics and the opportunities to use open data for entrepreneurship.
I would like to see Silicon Valley spend the next two years learning to participate in the political process and pushing to make these, and other policy objectives, happen. While every politician wants his/her hometown to be the “next Silicon Valley”, we really haven’t seen Silicon Valley use its abilities or mythic status to drive policy change. We need its leaders to be more astutely involved on the national stage on issues like the role of the National Security Agency and immigration reform. Silicon Valley needs to hire better lobbyists, run better advocacy campaigns, and use its incredible clout to create change. It can even start in its backyard of California - where transportation systems, schools and infrastructure continue to struggle and don’t seem to benefit much for the innovations coming out of Silicon Valley.
Given Washington’s obsession with elections, we have 12-18 months to get substantive work done on the innovation and entrepreneurship agenda. It means that Washington needs to get to unfinished business first, and the entrepreneurial community needs to prioritize its needs and advocate for them vigorously.
