Technology Works for Startups and Our Economy

We are proud to announce the launch of Technology Works today, a study demonstrating the pervasive and important growth of the tech workforce across the United States. Engine is committed to tracking the close connection between innovation and entrepreneurship. This new research, which we commissioned from the Bay Area Council Economic Institute, demonstrates the connection between high tech employment and overall economic prosperity.

Today’s study is an expansion on the data visualization we launched during the party nominating conventions that illustrates the geographically diverse nature of technology hubs in the U.S.

More than ever, startups harness technology to achieve their goals. This means hiring more people with skills in the science, technology, engineering, and mathematics (STEM) fields, the definitive factor in the Bureau of Labor Statistics’ defintion of high tech industries. Tech-focused startups tend to start small and grow rapidly, becoming the drivers of overall employment.

It’s easy to highlight startup success stories: Google, Facebook, Pandora, Twitter, and Yelp are just a few of the relatively young, tech-based companies that employ thousands of workers. As we better understand the multiplicative effects of hiring at these companies -- and the startups that will follow in their footsteps -- the case for supporting innovative entrepreneurs becomes apparent.

Communities experience significant benefits from high tech employment. We are able to estimate that the creation of one high tech job accounts for the creation of 4.3 other jobs in a local economy. How does that work? Technology workers tend to earn more than their peers in other industries, which they put back into the local economy by consuming goods and services. Tech companies companies also rely on local services and vendors, further driving local benefits.

So while many Americans may never work for a company like Google or a technology-focused startup, they still benefit from the impact these jobs have in communities around the country. About two-thirds of the U.S. labor force works in local services, ranging from healthcare to legal services to restaurants. As Enrico Moretti, Professor of Economics at the University of California, Berkeley, said about the study, “the dynamism of the US high tech companies matters not just to scientists, software engineers, and stockholders, but to the community at large.”

Our research with BACEI makes it clear that the economy increasingly depends on innovation. Explosive job growth isn’t likely to come from the established internet giants. It will bloom from driven entrepreneurs making the most of the technologies at their fingertips. Engine is committed to continuing analyses of startups’ impact on the economy and we’re planning further compelling research in the near future.

Disagreeing Doesn’t Mean Disengaging

Uber’s recent win in Washington DC over taxi regulations has sparked some debate about the approach startups should take to dealing with government. Working with state, local, or federal government is never a perfect process, companies often rightly feel that revenue, consumer access, or effective competition are threatened by new laws or existing regulations. Whether a process involves clash or compromise, results aren’t guaranteed.

At Engine, we have worked with policymakers on proposals that impact startups’ businesses, like Startup Act 2.0, and have helped to stage wide-scale protests, as was the case in confronting SOPA/PIPA. Both approaches brought results, though not perfect solutions, and moved things in the right direction for the startup ecosystem.

No startup should hesitate from playing hardball by harnessing user-advocates who are passionate about their products if they think customers deserve to be heard. Nor should an entrepreneur shy away from engaging directly with government where discussion might improve policy. Personalities, politics, and ideas will clash whether they are trumpeted in the public square or discussed behind closed doors. We need more, not fewer people involved in the lawmaking process.

This phenomenon isn’t limited to startups. Disagreements public and private occur constantly in DC, Sacramento, Albany, and Des Moines, and involve some of the largest companies in the world. When AT&T sought approval to acquire T-Mobile, more than 40,000 public comments were filed with

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the Federal Communications Commision and firey rhetoric was directed by and at many invovled.

Engine is building tools that make it easy and effective for entrepreneurs to connect with and influence government. In the end,

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whether you work with Engine, call on your users to tweet support, or meet with a representative one-on-one, as an entrepreneur, you should feel empowered to engage with your government. Our stories and experiences matter and should help guide these debates. Startups working with government -- choosing to engage and doing so in an effective manner -- go beyond simply creating debate, they foster a stronger ecosystem for our businesses and our community to thrive.

Continuing the Conversation: A Roundtable on San Francisco, Prop E, and Technology

The move by San Franciscan voters to approve Proposition E earlier this month was something of a coup for the tech industry. This shift in tax policy aims to encourage hiring and new business development in the city and saw support from the mayor, tech companies, and leaders in the venture capital community. While the impact of the reform will be evaluated over the coming years, the coordination of the tech and startup community around this policy is an encouraging achievement.

The important question we face after the success of Prop E is how to keep the dialogue between government, citizens, and innovators moving forward?

Technology companies and other interested advocates including the San Francisco Citizens Initiative for Technology and Innovation (sf.citi) backed Prop E, arguing the reform would be a catalyst for job creation in San Francisco. A video released during election season by sf.citi highlighted the important role technology can play in improving local governance and day-to-day problems.

For years, licensing, policy, and regulation have pitted the tech industry against itself, seeing companies use government as a wedge against competitors. Working together with businesses and other stakeholders to address policy challenges will help our communities and country emerge stronger, more efficient, and more prosperous. The first step is coming together. Engine has been working in local communities across the country as well as here in the valley to make local startup policy a priority. We encourage you to join Engine to be part of future success stories in your own backyard.

Next Thursday, we are going to continue this conversation. Please consider joining Engine for a roundtable on technology, economic growth, and local policy at 10am December 6. For more information, email us at info@engine.is.

Photo courtesy of  MomentsForZen.

Tell Congress to Protect Startup Data

Today, Engine and a coalition of more than 20 organizations call on Congress to require law enforcement to secure a warrant before asking businesses turn over user data. Data plays an increasingly important role for startups. This week, the Senate Judiciary Committee is slated to vote on a proposal that would change the Electronic Communications Privacy Act (ECPA) rules outlining how the government can access digital data.

ECPA was enacted in 1986 and is in need of an update. Innovations like cloud computing are available to businesses of all sizes and have changed the way data is stored and transmitted. The government must set clear due process protections -- such as securing a warrant -- to access consumer data through businesses.

Startups and other innovative companies leverage all sorts of data to make products better, ranging from location data to make map applications more accurate, to transaction information that prevents fraud. A lack of clarity under the current law imposes problems for companies.

Uncertainty about compliance increases legal costs that most startups are generally unprepared to take on. Also, giving up customer data can erode the trust of users. Receiving a complex legal request from the government for user data can put startups in a bind, forcing them to decide between absorbing unforeseen legal costs or alienating current and prospective users.

Engine has joined with a coalition of technology, industry, and civil liberties organizations to call on Congress to reform ECPA in order to create greater legal certainty around user data. Today is your chance to get involved by telling the Senate Judiciary Committee to make data, privacy, and due process a priority.

Click here to tell Congress that your digital data deserves the same protections as your mail and phone calls. You can also tweet at any or all of the members of the Senate Judiciary Committee listed below to tell them that protecting data matters to startups.

Chairman Patrick Leahy @SenatorLeahy

Ranking Member Charles Grassley @ChuckGrassley

Sen. Herb Kohl contact form

Sen. Dianne Feinstein @SenFeinstein

Sen. Orrin Hatch @Orrin Hatch

Sen. Chuck Schumer @ChuckSchumer

Sen. Jon Kyl @SenJonKyl

Sen. Dick Durbin @SenatorDurbin

Sen. Jeff Sessions @SenatorSessions

Sen. Sheldon Whitehouse @SenWhitehouse

Sen. Lindsey Graham @GrahamBlog

Sen. Amy Klobuchar @amyklobuchar

Sen. John Cornyn @JohnCornyn

Sen. Al Franken @alfranken

Sen. Michael Lee @SenMikeLee

Sen. Christopher Coons @ChrisCoons

Sen. Tom Coburn @TomCoburn

Sen. Richard Blumenthal @SenBlumenthal

Startups Can’t ‘Give It A Rest’ on Software Patents

David Kappos, head of the United States Patent and Trademark Office, gave a presentation yesterday morning telling those claiming the patent system is broken to “give it a rest.”

Kappos approached the debate over software patents in context of smartphone lawsuits between large corporations like Apple and Samsung. He admonished detractors of the patent system to “get the facts.” Here at Engine, we’ve been following developments in the patent system closely; the fact is startups can’t afford to give it a rest under the current patent regime.

The economics are clear: startups fuel net job growth in the U.S. economy. Small, technology-focused businesses are developing innovative products and promoting competition. Software patents are a real challenge to young firms that don’t have the legal resources to defend themselves against non-practicing entities -- often called trolls -- that use patents for litigation instead of innovation.

A June paper from Boston University showed that patent trolls cost companies $29 billion in 2011 in direct costs from litigation. While large companies pay more of the overall settlement and legal costs, the expenses make up a greater share of smaller companies’ revenue, according to the research.

Last Friday, we attended a conference aimed at finding solutions to the software patent problem. Hosted by the High Tech Law Institute at Santa Clara University Law School, lawyers, software engineers, and activists came together to discuss possible solutions. Legal, procedural, and economic ideas were floated, but investor Brad Burnham of Union Square Ventures made a critical point, saying that 25 percent of USV’s startups had been sued and that half had received demand letters. Suits like these don’t just cost companies revenue; they threaten the survival of startups and destroy jobs.

Policymakers like Kappos must recognize the existential threat bad patents pose to young companies. While he emphasized new review procedures available to PTO after passage of the America Invents Act, the fact is that the measures in place insufficiently protect small companies facing predatory patent suits. The last thing the startup community needs to do is to give software patents a rest. At Engine, our community aims to lead the discussion on how to move forward.

Picture courtesy of Alan Kotok.

Technology for Economic Progress

Nmachi Jidenma is an international development specialist passionate about using technology for development. She focuses on International Entrepreneurship at Engine. @nmachijidenma

Last week, I was at the Techonomy 2012 conference in Tucson, Arizona, where about 250 technology and business leaders gathered to explore how technology and innovation can accelerate progress in business and society. At the conference, various issues at the intersection of technology and the economy were explored in what proved to be an enriching, intellectual dialogue. From futurist Ray Kurzweil’s discourse on the merger of man and machine, to researcher Gordon Bell’s discussions on lifelogging and its impact on augmented memory, I left the conference with a stronger faith in technology’s role in improving society.

Among the various “techonomic” issues explored, what struck home for me was the impact a mobile world and big data can have in transforming economies in emerging regions of the world.

In recent years, the world has witnessed an explosion of data as billions of new devices connect to the Internet. By some estimates, in the past two years, ten times more data has been created than in all of human history. Though the privacy and security implications of this data remain issues of concern, its potential use cases are significant. When used for good, big data can be used to mine and model various social issues around the world from food shortages to the dynamics of global urbanization.

In regions like Africa, the impact can be tremendous. Already, the continent is experiencing paradigm-shifting growth. In the past decade, six of the world’s top ten fastest growing economies have been from Africa. With the current boom in mobile technology adoption, the potential of technology to enable the continent to leapfrog decades of economic progress and usher in prosperity for the populace is immense. From finance to healthcare, there is an opportunity to empower hundreds of millions of people through a confluence in the use of mobile technology and big data intelligence. The runaway success of M-Pesa in Kenya provides evidence of the sort of revolutionizing effect technology can have on emerging economies. The hope is that the next decade will usher in smarter governance through mobile data.

At the same time, the rising influence of robotics technology and its future impact on the face of unemployment and job growth both in the U.S. and abroad is of particular importance. As robotics ushers in more efficiency and just-in-time processes to a dynamic planet, how do these trends affect job growth domestically and internationally as well as the future of work? How do they affect the future of emerging regions of the world and their future roles in the global economy? How do they affect business processes such as outsourcing and the skill sets needed to compete in an increasingly automated world?

At Engine, these questions are important to us because they bring to the fore technology's important role in shaping the global economy. We are passionate about how things like mobile and big data can be used for good around the world, especially in emerging regions where technological progress can significantly fast track development. There is a unique opportunity for governments to use actionable information from data patterns to shape policy in a rapidly changing world. That way, we can build a smarter planet and a more prosperous future for all.

Why Open Wireless?

Wireless communication has fundamentally changed the way we use technology and do business. It’s easy to take for granted the ubiquitous nature of wireless services in the United States today, especially as LTE rolls out providing more robust options. The speed with which data-hungry devices are being adopted, teamed with a limited amount of available spectrum, has led to what some call a “spectrum crunch,” contributing to problems like dropped calls and stalled downloads as well as data caps and other pricing mechanisms aimed at limiting ever-growing data consumption.

In light of these issues, Engine has joined with the Electronic Frontier Foundation and 11 other groups to support the Open Wireless Movement, a coalition of advocates, companies, organizations, and technologists working to develop wireless technologies and to encourage internet openness. Strengthening the wireless ecosystem isn’t just about bad service on your iPhone or poaching your neighbor’s WiFi; effective, efficient, and secure wireless communication options will propel future innovation and economic growth.

The Open Wireless Movement is about more than wireless hotspots. It links service providers, businesses, and engineers to develop networks around the country that are free, secure, and reliable for everyone. By emphasizing the benefits of sharing, we aim to create new ways of thinking about the wireless ecosystem.

Now you might say, “The Federal Communications Commission is planning new spectrum auctions in the next few years. What’s the problem?”

Even with new blocks of spectrum up for auction, the demand for wireless data is projected to continue to grow rapidly. If we don’t change the way we approach spectrum through public policy and private deployment, we will limit opportunities for startups to create new products by harnessing wireless technologies.

Doing so will require not just forward-thinking policies, but a move toward open and shared technologies. Focusing on -- and increasing the success of -- unlicensed technologies like Bluetooth, WiFi, and RFID will be central to our success. These technologies have empowered innovators to experiment with and build low-cost, reliable devices and protocols that have led to the rise of successful segments of the technology ecosystem.

New auctions ought to continue the FCC’s track record of creating fair markets for commercial-use spectrum for wireless carriers. These auctions should increase their focus on access to spectrum for small and regional wireless companies that can push innovation in local communities.

We must also recognize that the use of auctions and unlicensed technologies is not a zero-sum game. WiFi and carrier-owned spectrum have proven to be exceptional complements. Moves to marginalize unlicensed spectrum allocations or artificially increase auction prices harm consumers, innovators, and businesses. Recommendations made by the White House in July that the federal government share some of its spectrum with commercial users may increase our access to the public resource, opening the door to even more technologies that will push innovation forward.

The Open Wireless Movement is one step in a broader rethink of how we access the internet. Engine is excited to be on board and we encourage you to read more about the project, learn how you can promote the cause, volunteer to help engineer new wireless solutions, or get updated on how to make your wireless network part of the movement.

Image via Wikimedia Commons

Don't Forget to Vote

After months of campaigning, political ads, and debate between candidates across the country, today is the day to vote. While at Engine we’ve been tackling issues and policies that affect startups, this is your opportunity to directly impact your local, state, and federal government.

How should you vote? And where? The Google Elections team has engineered a useful tool that helps you find your polling place, tells you what races will be on your ballot, and even links to candidates websites and social media profiles on Facebook, Twitter, YouTube, and Google+. What if you're in California where propositions are up for a vote? Don’t worry! The referenda on your ballot are outlined too.

The first step to better government is increased voter participation. Whatever hand we as a country are dealt, Engine will work with policymakers to make sure the issues that affect startups are on the agenda -- but today is your day to get involved at the ballot box.

Join us after the elections to build stronger connections between new lawmakers and the startups growing the American economy. You can check out some of the issues confronting startups here. 

Startups Assist Sandy Recovery

As the federal government moves to assist communities affected by Hurricane Sandy, startups are lending a helping hand to their neighbors and one another as well. Mashable’s Zoe Fox today reported on entrepreneurs opening their offices to other companies and providing relief services to their communities.

Engine joined with New York Tech Meetup at the NYU Stern School of Business last week, where people gathered from many different corners of the New York startup community to discuss not just the upcoming election, but also a blueprint to turn moments of advocacy into a lasting movement of tech companies and allies working together on issues that affect our communities.

Disasters like Sandy have devastating consequences for families, individuals, and small businesses. The New York Tech Meetup team has put together a Google Survey taking requests for technology assistance in the wake of the storm.

The Engine team encourages you to spread the word. If you are looking for assistance or opportunities to give or volunteer on the Lower East Side, Redhook, Staten Island, or Astoria, consider using Recovers, an Engine member that coordinates disaster relief.

National Entrepreneurship Month

This morning, the White House declared November National Entrepreneurship month. The introduction of the Startup America Legislative Agenda and the JOBS Act, which was signed into law by President Obama in February, has demonstrated the focus of policymakers on Americans who build new businesses.

The American economy depends on startups. Creating an atmosphere where entrepreneurs take calculated risks, investors help young companies grow and thrive, and technology facilitates the emergence of new markets and products will help lead our country out of the economic slump.

For a year that began with SOPA, a dark moment for internet entrepreneurs, 2012 has been a very positive for those of us championing innovation and entrepreneurship. After beating back SOPA, a new, emboldened constituency of innovators sought to improve the business climate for entrepreneurship. To that end, many of us fought for and won passage of the JOBS Act and started an important conversation on Startup Act 2.0, which we hope will become law early in the next Congress.

Though this entire month is dedicated to American entrepreneurship, November 16th is reserved in particular to be National Entrepreneurship Day as a celebration of America’s innovative prospects. At Engine, we are pleased that the President and his administration have singled out the promise of entrepreneurship, and look forward to continuing to work with policymakers on both sides of the aisle to champion the cause of entrepreneurship.

Photo courtesy of Trevor McGoldrick.

Detroit: Startup City

Over the last two days, I’ve been hanging out with some of the brightest young minds in a growing startup community, talking about strategies for growth, ways to strengthen the local startup community, ways to connect different silos of entrepreneurs, and much more.

And the best part is I did it all in the shadow of the home of winners of the American League Pennant.

Reports of Detroit’s renaissance have been premature before. The Motor City has gotten a lot of bad press for decades in the wake of crime, unemployment, widespread poverty, and more. This visit, though, has made me optimistic about the future of the city. While the auto bailout has helped turn around the seemingly endless string of bad stories coming out of Southeastern Michigan, another part of the economy is adding jobs and building community.

Detroit has always been an entrepreneurial city. The United States has an auto industry because Henry Ford had an idea and revolutionized manufacturing here in Michigan. Today, startups are taking root in Downtown Detroit like never before.

I met many local entrepreneurs yesterday at the M@dison Building, across the street from Ford Field and Comerica Park, where we gathered for Brand Camp University run by Detroit Entrepreneur and Engine collaborator Hajj Flemings. Flemings also joined Engine in June for Startup Day on the Hill. Brand Camp was a day packed full of interesting chats with a diverse group of entrepreneurs including Brad Feld, Boulder’s venture capitalist extraordinaire, Startup America COO Kathleen Warner, content strategist C.C. Chapman, myself, and others. Through all of the presentations based on the theme of “Build, Innovate and Grow Detroit,” young Detroiters gained insights and asked really excellent questions about how to start businesses and contribute to the city’s success.

I also had the opportunity to meet with many of the next generation of Detroit entrepreneurs this morning at the Startup Ventures event on the city’s East Side. More than 175 high school students focused on science and technology gathered at the UAW-GM facility along the Detroit River for a wide-ranging discussion of entrepreneurship, the importance of education in STEM fields, building business in a strong Detroit, and more. It was a powerful experience to be surrounded by motivated young minds keen to learn, many of whom pitched me on some great business ideas.

Overall, I’m leaving Detroit tomorrow with one pervasive thought: that this city, so long on the brink, has a road back to prominence. And with entrepreneurs taking the lead in building a new, stronger Detroit, they’re in good hands along the way.

Photo Courtesy of Patricia Drury.

reroute/sf: a New Model for City-Startup Collaboration

This weekend Engine, along with the City of San Francisco and friends in the tech community, will co-host reroute/sf, a hackathon in which engineers, designers, and business minded folks will form teams to build technology that aims to improve transit in San Francisco.

When our team met with representatives from the City of San Francisco and the SFMTA eight months ago, our message was simple: let’s work together to find technological solutions to overcome the transit challenges affecting the city. Access to transit is important for growing businesses aiming to establish and keep their headquarters in San Francisco.

The problem? Finding a constructive way to address San Franciscans’ transit frustrations in a way that works within the City’s infrastructure and resource constraints. To avoid the pitfalls of similar attempts and ensure real change, a new approach had to be taken -- we had to work closely with the City and local civic organizations to engineer immediately applicable and actionable solutions.

Mark Wills, a designer at Hattery, came up with reroute/sf, a hackathon that uses technology to address problems that citizens and the City agree need to be fixed. We worked together with local officials to determine the core challenges that technology might be able to solve, and we have energized the technology community behind the potential to make their city a better place to live.

This weekend, we’re ready to open our doors for reroute/sf, with the hope that our friends who code, design, and pitch will deliver interesting and useful inventions to help improve our City. The SFMTA has committed to working with the winning teams to make their innovations real, and Google Maps has generously provided grants for the winners to support this collaborative work.

While we aspire to produce new transit technologies this weekend, we also hope for reroute/sf to be a model for future partnerships between the City and the startup community.

Put Your Mark on Our Innovation Map

A few weeks back, we posted the first version of a simple tool to connect startups to incubators and accelerators in their communities. Created in association with our friends Luke Pelican and Marvin Ammori, we’re aiming to build out the map further. We’re looking to you -- investors, mentors, and entrepreneurs -- to tell us where these innovation hubs are to better connect with entrepreneurs.

Startups are critical to economic growth and job creation. Connecting entrepreneurs to resources that will help grow their businesses will be critical to keep this trend going. By submitting information about your group, startups can more easily find the spaces that will help them thrive.

How does it work? Go fill out this survey and we’ll populate your information on our map (we’re a bit obsessed with maps lately). Before we do so, we’ll send a confirmation email to make sure you’re cool with being included. Then sit back and watch as your incubator or accelerator pops up on our map.

Simple, right? As adoption grows, we hope to build out and design this map into a more robust tool, but first we need the data from you to make it possible. So drop us a line and we’ll get back to you straight away. The country can’t wait for more startups to take off and you may be the group that mentors the next big startup success story.

At Austin Startup Week

I’m excited to be in Austin for Startup Week. I’m here to meet with local startups and key players in the startup community as well as to tell Austin’s story of entrepreneurial growth. Local hubs for tech and for entrepreneurship are dotted all across the country, and each one is vital to the continued growth of the American economy as a whole. Engine is partnering with local organizations committed to growing the startup community here in Austin, including the Austin Technology Council and the Austin Chamber of Commerce.

On Wednesday, I spoke to a group of about 50 local entrepreneurs on a panel titled “Policy vs. Pitch” outlining some of the issues on the horizon in which the startup community can have a voice. There was consensus that while entrepreneurs tend to and ought to prioritize building their product above participating in policymaking. Their participation through platforms like Engine will be crucial in moving debates and helping the startup community grow. Issues like immigration reform, STEM education, and patent were highlighted as leading concerns to which the startup community should lend its voice.

And yesterday, I spoke with representatives from three congressional offices on startup policy, along with local entrepreneurs Mitch Jacobson from Austin Technology Incubator and Eric Overton, chief executive of Focus Embedded. We discussed ideas for better high-skill immigration, small business growth and other issues as part of the Austin Chamber’s involvement with Startup Week. I’m particularly happy to have had the opportunity to discuss Startup Act 2.0, a great idea we’ve touched on here many times before, and learn more about its prospects in the new Congress. All of the participants were confident about the prospects for entrepreneurship legislation in the new Congress and left the meeting eager to continue working to make these changes a reality.

I’m glad to be having these conversations in an environment as vibrant and engaged as Austin’s tech scene. Like many other entrepreneurial communities, Austin is showing how cities can grow based on investing in the startup community. I’m hopeful we can take the successes and the experience that Austin has had and translate it to help other communities grow throughout the country.

KC Startups for Open Internet

The Internet 2012 Bus Tour stopped off the campaign trail in Kansas City on Sunday, to participate in a panel hosted by the Kauffman Foundation on the future of entrepreneurship.

The internet bus tour, making its way from Denver, CO to Danville, KY, started its route after the first presidential debate last week. The aim? To show that a free and open internet isn’t a partisan issue or one restricted to small areas of the country. The bus, which will carry a group of reporters and Reddit co-founder Alexis Ohanian among others, will travel through the heartland to meet with people and collect stories of how they use the internet.

The event on Sunday was an opportunity for the Internet Bus riders to hear from the Kansas City startup community about how the internet has enabled their businesses to thrive. Kauffman’s Cameron Cushman told Engine; “The future of entrepreneurship is going to involve technology in some fashion. We need to make sure the internet remains a medium that entrepreneurs can use.”

Panelists included local entrepreneurs from AgLocal,Leap2, and Neighbor.ly. Jase Wilson from Neighbor.ly, a civic engagement platform that allows people and companies to invest in civic projects they want to see carried out in their cities and neighborhoods, spoke to Engine about the importance of campaigning for an open internet: “Open internet enables us. Neighbor.ly along with countless other e-commerce systems would be a non-starter if the internet were beholden to interest groups. We're able to try out ideas and provide a valuable service for next to nothing thanks to the open internet. The cost of participating as a platform in a non-open internet would skyrocket, removing lean startups like ours from the ecosystem.”

And that ecosystem is vital not just to the health of the entrepreneurial community in Kansas or any other individual community in the United States. Entrepreneurship is driving job growth across the country, and a thriving and open internet is vital to the continued recovery and growth of the economy. We’ll be tracking the bus as it rolls across the country campaigning for the internet, hitting the innovation hot spots in the heartland and further amplifying the voices of entrepreneurs and internet users from coast to coast.

Startups, Privacy & the FTC

Derek Parham is a startup advisor and a member of the Engine steering committee. This is an opinion piece and should not be construed as legal advice. @derekparham

Too few startups understand complex compliance requirements and the government could better communicate guidelines and regulations to entrepreneurs. This was the consensus reached at a roundtable meeting with Commissioner Maureen Ohlhausen of the Federal Trade Commission and members of the San Francisco startup community Wednesday morning.

The Commissioner joined members of San Francisco startup community at Engine to speak about the agency’s outreach to entrepreneurs and small businesses. Discourse between the startup community and Washington is critical to bridging the divide between the two groups. This kind of hands-on information sharing is invaluable to making sure policymakers gain technical experience with the real-world application of new technologies that they are regulating.

The FTC is eager to get startups involved in its consumer protection process. The problem is, small startups may not have the resources -- or the wherewithal -- to focus on compliance with FTC regulations. They are directing their resources toward growth and dealing with regulations is sidelined until the company gets big enough or successful enough. Often the compliance department of a company doesn’t exist until the startup is thinking about going public. But there are simple ways for startups to meet basic requirements. FTC regulators care a lot about the statements in privacy policies. So making a concerted effort when creating it, as well as checking it monthly to make sure it is still accurate is a super easy way to make regulators happy -- not to mention your users.

We need our community to become educated on FTC regulations that impact them. Privacy policies do matter, no matter how big your company is right now. And the FTC in turn needs to continue the open discourse with our community that we saw yesterday with Commissioner Olhausen at Engine. The FTC maintains a website, and a very active twitter feed which provide an avenue for keeping up on regulatory changes that are likely to impact your company. And of course, watch this space.

The First Presidential Debate: Will Startups be on the Agenda?

Tonight, former Massachusetts Governor Mitt Romney will take the stage with President Barack Obama at the University of Denver, for the first of three debates between the two candidates as we edge ever closer to election day. Tonight’s debate will focus on domestic policy. We’re hoping to see startups and entrepreneurship prioritized in the debate, as both are a vital and growing force in the American economy.

Both the President and Governor Romney have taken positions in their campaign platforms that would impact the startup community -- from investment in STEM education to reforming high-skilled immigration and others.

President Obama has laid out much of this vision with his Startup America legislative agenda, promoting policies such as granting green cards to the recipients of advanced degrees from U.S. universities, expanding and making permanent capital gains tax exemptions for small businesses, and championing crowdfunding and other financial regulation reforms passed in the JOBS Act in February of this year.

Governor Romney has backed similar proposals, and others that include programs to attract more high-skilled immigrants, strengthening the research and development tax credit and proposed amendments for Sarbanes-Oxley.

But will the candidates elevate these issues and others to the national stage of tonight’s debate?

America is in need of bold leadership. Our economy is still on the road to recovery, but startups are leading the way in creating jobs and pulling us up out of the recession. Government should pay attention to the potential for growth in reforming areas like immigration, education, and financial regulation, in order to give America the opportunity to reclaim our strong economy and cement our position as a global leader.

We hope that both candidates prioritize these important issues in tonight’s debate. Whatever the outcome of the election in five weeks, we look forward to working with the President and Congress on behalf of our community to make a better regulatory environment for startups reality.

Image from Creative Commons

Engine Welcomes Reps. Chaffetz and Goodlatte

Last week, Engine hosted Representatives Jason Chaffetz of Utah and Bob Goodlatte of Virginia. The lawmakers, both Republicans, joined a host of startups to discuss issues involving copyright, patents, and other intellectual property issues critical to entrepreneurs developing technology products for consumers.

The conversation revolved around a number of subjects. Entrepreneurs expressed concern about a second coming of bills like SOPA and PIPA as well as an interest in fixing the patent regime to keep trolls from harming young companies. We also discussed Rep. Chaffetz’s Internet Radio Fairness Act of the 2012 -- introduced with Democratic Senator Ron Wyden of Oregon -- which would level the playing field between radio broadcasters online and off.

Rules changing how startups can use and display content will be critical to the evolution of the technology industry. At Engine, we will continue to get entrepreneurs involved in the debate on intellectual property as it affects their businesses.

Colleen Chien Patent Research: Startups Paying the Price

Patent lawsuits create big problems for small companies and startups which pay a larger share of their revenue and resources fighting them than larger companies, according to research published by Santa Clara University Professor Colleen Chien.

In July, Chien testified before the House Judiciary Subcommittee on Intellectual Property about the need to change a patent system that harms entrepreneurs and innovators more than it helps. Afterward, Engine sent out a call for startups who had been affected by patent litigation to share your stories with Chien to assist with a study into the impacts of patent litigation on startups. Chien listened to your stories, tabulated the survey results, and used them concurrently with her comprehensive analysis of patent litigations from 2005 to present. The findings:

• Small companies are more likely to experience “significant operational impact” due to patent demands.
• Monetization of software patents is an iffy investment. Few software patents are actually valuable, and the patent market is a risky lottery type situation rather than something investors or companies can rely on. 
• Most startups don’t patent anyway because of the expense.
• Startups are often targeted because they are users of technology -- like retail or hospitality outlets that have WiFi.

Startups and small companies are among the most negatively impacted by patent litigation. The need to protect America’s startups, and to create an environment that isn’t chilling to new firm establishments, is vital to our continued economic growth and job recovery.

Chien notes that existing proposals, like the SHIELD Act, may work differently for startups than they do for larger and more established companies, who are more constrained by time and resources and thus cannot bear even the lessened drain on resources that these reforms provide. The SHIELD Act functions on a “loser pays” system in which the costs of invalid suits or non-infringed cases are paid by the bringer of the case. However, in the case of a small startup, the resources and time drained in order to prove that the suit is invalid or prove non-infringement may still be too high.

Policymakers need to be aware of the high costs patent litigation imposes on startups under the current system and under proposed reforms. The entrepreneur community should guide policies that lessen potential negative effects on startups and young businesses. Startups are the key to economic growth and global competitiveness in this country, and government regulation needs to reflect this.

Mapping Innovation and Entrepreneurship

Startups are flourishing across the country as we can see from the interactive map Engine released last month. What you may not know is that a network of incubators, accelerators, and other resources are available to entrepreneurs in these communities. Along with my colleague Marvin Ammori, we undertook a research project to catalog some of the important innovation hubs. With the help of our friends at Engine, we now have a tool to map these hubs for the benefit of entrepreneurs, job seekers, and policy makers. We welcome your help in continuing to build out this map for startups around the country.     

Startups are important: they drive economic growth and technological innovation, representing the best of entrepreneurialism and perseverance. However, finding assistance when launching a startup and building a business can be very difficult. Fortunately, there are organizations that help entrepreneurs turn a kernel of an idea into a thriving business: incubators and accelerators. These innovation spaces are a crucial ingredient for entrepreneurial success.

Generally speaking, incubators provide entrepreneurs with a place to set up shop, business resources, seed funding, networking opportunities, and other tools to get their companies started. Accelerators are similar in that they provide resources to young companies, but they also work with startups that are more established and help them to take their business to the next level. Together, these organizations play a critical role in the innovation ecosystem.

With Engine, we’ve created a map of incubators and accelerators that are helping startups throughout the country. Click on a pin to learn more about an individual innovation space. We show organizations that work with internet-focused companies -- app developers, software designers, and other related organizations -- but they may also host many other types of businesses.

The maps shows the innovation spaces that exist from coast-to-coast, in all 50 states. If you’re a startup looking for help launching or growing your technology company, check out the incubators and accelerators in your region. If you’re an incubator or accelerator but don’t see yourself on the map, fill in your information so we can add you.

Innovation Spaces Map

Survey  

Luke Pelican is an associate at The Ammori Group