Wack: Entrepreneurs vital to sustainable economic growth

See this article as it was posted in the Carroll County Times.    

If you drive down Rt. 140 toward Reisterstown, you may see a billboard on the right showing the winners of the Chamber of Commerce’s recent Carroll Biz Challenge. Three McDaniel students put together a startup called BookSwap, and theirs is a success story for the future.    

IMG_20170831_101710743_HDR.jpg

Small businesses and entrepreneurs are the foundation of a healthy local economy. It’s a common sense idea that has substantial support in economic data. Nurturing a vibrant entrepreneurial culture is one step toward ensuring reliable economic growth.  

According to the U.S. Small Business administration, small companies employ just over 50% of the workforce, and more importantly, account for 2/3 of net new job growth. This is confirmed by U.S. Census data. It also shows that new small companies have a failure rate of 50% in the first five years, increasing to 70% fail in the first 10 years of operations.

These numbers have important implications. If most new jobs come from small businesses and start-ups, and half of new businesses fail in the first 5 years, continued job growth requires constant replacement of failed small businesses with new small businesses. That means supporting entrepreneurs and startups should be a very high priority for economic development.

Where do entrepreneurs come from? Are they born, or can they be made? Once you find an entrepreneur, what are the factors that increase their probability of success?

IMG_20170810_210608.jpg

The Kauffman Foundation is a non-profit devoted to researching, supporting, and promoting entrepreneurship, and they publish frequent white papers on these very issues. Although far from settled science, one thing is clear: entrepreneurs matter, and efforts to identify, recruit, nurture, and accelerate them can pay huge dividends for a community.

Locally, a new non-profit called MAGIC (the Mid-Atlantic Gigabit Innovation Collaboratory) conducts programming and projects to foster innovation, recruit and nurture entrepreneurs, and help existing startups increase their growth trajectory.

The BookSwap team started their journey toward entrepreneurship with MAGIC. Brandon Cortese participated in the first MAGIC Capture the Flag cybersecurity competition. He then recruited two more friends to participate in the MAGIC Hackathon last February, where they learned to design, build and pitch an app over the course of a weekend, with the assistance of MAGIC volunteers.

People can bring their creative ideas to life for the world to see with just some lines of code.
— Brandon Cortese

“People can bring their creative ideas to life for the world to see with just some lines of code,” said Cortese about the Hackathon experience. The team went through all the hardships and excitement of entrepreneurship, including long hours, loneliness, doubts, as well as camaraderie, inspiration, and confidence.

Failure isn’t actually failure; instead, it’s an opportunity for growth.
— Dajaun Price

“Failure isn't actually failure; instead, it's an opportunity for growth,” said Dajaun Price, another BookSwap team member. This is a valuable lesson difficult to teach without practical experience. The MAGIC events provide exactly that. Price continued, “MAGIC taught us how to be productive, even when unexpected adversity strikes.”

MAGIC taught us how to be productive, even when unexpected adversity strikes.
— Dajaun Price

On their third attempt competing in pitch competitions, the team won 1st place and $7,500 in the Biz Challenge and continue to push toward the commercialization of their app. They have to form a company, file for trademarks, and push hard for the first revenues. Cortese concluded, “I know the road is long and there are so many more steps we need to take.” The team is using their winnings to continue the development of the app and begin marketing efforts on college campuses.

Now we need to create another 20 new start-ups like BookSwap, and keep doing that every year, forever. It will take many years to get there, and it’s a lot of work, but worth it.

Written by Robert Wack. Robert writes from Westminster, where he serves on the board of MAGIC, and also serves on the Westminster City Council.