How to Build a Startup Economy

Like just about every city, Provo needs to build up and diversify its economy. One way to do that is to become a startup hub.

With a large university and a young population, Provo really ought to be the home of many startup businesses in multiple industries. Yet the city and the region could do better. Keep in mind that the archetypal startup hub is Silicon Valley.

So how can a city cultivate more innovative startups? Writer and venture capitalist Paul Graham offers some advice:

I think there are two components to the antidote: being in a place where startups are the cool thing to do, and chance meetings with people who can help you. And what drives them both is the number of startup people around you.

Though Graham’s website looks like it hasn’t changed since 1997, the explanation he offers is fascinating and was recently cited as a way to solve London’s problems. Graham continues,

Both components of the antidote—an environment that encourages startups, and chance meetings with people who help you—are driven by the same underlying cause: the number of startup people around you. To make a startup hub, you need a lot of people interested in startups.

Provo is growing, so it’s already starting to tackle the issue.

However, one key to turning general population growth, as well as basic job growth, into actual startup growth is making sure that many people and companies are concentrated in a single area. That’s more or less the same argument that came up in this post on the importance of putting many businesses in downtown, rather than scattering them throughout a region. It’s also a reason to promote dense neighborhoods instead of sprawling communities.

Downtown Provo already has many businesses. However, to create more startup companies, the city needs to cultivate a culture that makes startups "cool" and that brings a lot of hopeful entrepreneurs into contact with one another.

And finally, it’s important to remember that a strong startup culture won’t create itself. Graham even points out that most communities appear to be sprayed with “startupicide.”

But there are ways to reverse that. Smart Planet reported today on efforts in Durham, North Carolina, to bolster that city’s startup scene. The gist of the article is that the city offers incentives for startups, which in turn generate revenue and create vibrancy. In a separate article, Emily Badger notes that the strategy is paying off:

Downtown Durham has 70 startups located within five blocks of the Smoffice, including mobile app developershealth IT companies, and online marketing platforms. The coffee shop itself, Beyu Caffe, has long been an informal meeting place for the neighborhood’s startup set. It’s just three blocks away from the American Underground, the 26,000-square-foot basement of the historic American Tobacco Campus that’s dedicated to the kind of flexible, low-cost leases entrepreneurs are unlikely to find in more expensive cities.

Much like creating a strong arts community, a successful startup culture takes work, investment and creativity. But if done correctly, it has the potential to pay off handsomely.

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2 Comments

Filed under arts, Development, Downtown, economics, neighborhood, urban

2 responses to “How to Build a Startup Economy

  1. Pingback: You’ll Make More Friends in a City | (pro(vo)cation)

  2. Pingback: Provo: City of Startups | (pro(vo)cation)

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