Sprinkle - Screw the valley : a coast-to-coast tour of Americas new tech startup culture : New York, Boulder, Austin, Raleigh, Detroit, Las Vegas, Kansas City

Copyright 2015 by Timothy Sprinkle

All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles or reviews.

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First e-book edition: January 2015

Library of Congress Cataloging-in-Publication Data

Sprinkle, Timothy.

Screw the valley : a coast-to-coast tour of Americas new tech startup culture : New York, Boulder, Austin, Raleigh, Detroit, La s Vegas, Kansas City / by Timothy Sprinkle.

pages cm

Includes bibliographical references and index.

ISBN 978-1-940363-30-1 (hardback)ISBN 978-1-940363-54-7 (electronic) 1. High technology industriesUnited States. 2. New business enterprisesUnited States. 3. Computer industryUnited States. 4. Entrepreneurship United States. I. Title.

HC110.H53.S69 2015

338'.040973dc23

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To Kristin, for making this happen,
and Harold, for convincing me it was
worth doing in the first place.

Introduction

Entrepreneurs embody the promise of America. The idea that if you have a good idea and are willing to work hard and see it through, you can succeed in this country. And in fulfilling this promise, entrepreneurs also play a critical role in expanding our economy and creating jobs.

President Barack Obama, January 2011

S HORTLY BEFORE his scheduled State of the Union address in January 2011, President Barack Obama, Treasury Secretary Timothy Geithner, and a group of leaders from the private industry set off on a road trip through the hard-hit upper Midwestthe socalled Rust Belt. The trip was part of the kickoff for the administrations new small business development program, Startup America. The idea was to focus attention on high-growth, high-potential startup companies in areas like information technology, clean energy, and software by publicizing a series of new Small Business Administrationbacked loans that were being offered to startup founders to help get their companies off the ground.

It was an auspicious way to kick off this new initiative, but the White House had a lot on the line at the time. With the wounds from the 200809 recession still raw, job growth and economic development were critical issues for the administration heading into an election year, and the Obama team was prepared to go all in on the promise of Americas entrepreneurs.

This mission to promote entrepreneurship is a core component of President Obamas national innovation strategy for achieving sustainable growth and quality jobs, the White House wrote on its blog at the time. Not only do startups bring a wealth of transformative innovations to market, they also play a critical role in job creation across the United States. Those entrepreneurs who are intent on growing their businesses create the lions share of these new jobs, in every part of the country and in every industry. Moreover, it is entrepreneurs in clean energy, medicine, advanced manufacturing, information technology, and other fields who will build the new industries of the twenty-first century and solve some of our toughest global challenges.

Northeast Ohio was a particularly effective place to kick off this new push. The manufacturing sector has been a key part of the Cleveland-area economy for generationsthanks to local companies like Procter & Gamble, Sherwin-Williams, Hoover, the NCR Corporation, and othersand was particularly hard hit by the downturn, leaving many in the region out of work. Whats worse, these former manufacturing workers often found themselves underskilled and unable to compete in the new, technology-based economy. The numbers dont lie. According to the Bureau of Labor Statistics, there were nearly 15 million people working in manufacturing in the United States as of 2003. By 2013, that number had tumbled to less than 12 million.

Clearly, manufacturing centers like those in Ohio needed new jobs in new industries, and they needed them fast. High-growth tech startups were viewed then, as they are now, as a large part of the solution to this shortfall.

Because the new businesses created by entrepreneurs are responsible for most of the new jobs in our country, helping them succeed is essential to helping our economy grow, Obama said in 2012, when announcing November as National Entrepreneurship Month. That is why my administration has fought tirelessly to invest in entrepreneurs and small businesses so they can do what they do besttake risks, develop new ideas, grow businesses, and create new jobs.

The effort was far-reaching. Since 2010, the Obama administration has signed into law eighteen tax cuts for small businesses, partnered with the private industry to launch the Startup America Partnership, which made more than $1 billion worth of business services available to the nations entrepreneurs, worked with federal agencies to streamline the public-private partnership process for new businesses, and launched an online portal called BusinessUSA to better enable all businesses to leverage the federal resources they need.

As long as Americas daring entrepreneurs are taking risks and putting themselves behind new ideas and innovations, the federal government will serve as a partner to support their endeavors and catalyze their success, Obama said. This month, and during Global Entrepreneurship Week, let us renew the spirit of innovation that has fueled more than two centuries of American progress and promises to drive us in the years to come.

AOL founder Steve Case, a key private industry supporter of the startups are our future effort and the first chairman of the Startup America Partnership, agrees, citing the fact that the US economy has been forged in large part by entrepreneurs throughout history, from the nations earliest days as a global power to the recovery from the Great Depression that took place in the 1940s and 1950s. Our nation once again looks to these creative risk-takers to unleash the next wave of American innovation, Case said when he was appointed as chairman, and I am pleased that President Obama has made supporting and celebrating entrepreneurs a major priority of his economic strategy.