Innovation for All: Kicking Off a Series Celebrating Diversity in Tech

You can also read this post on Medium.

The fact that not enough women work in tech is a serious problem that has been well documented. But this predicament is meaningful well beyond our industry. If women and other underrepresented minorities aren’t creating the technical tools that benefit our society writ large, then those tools simply won’t address the problems faced by those groups. And we will all suffer as a result.

The numbers are bleak: only three percent of startups are founded by women, and women represent fewer than 13 percent of employed engineers. Across the United States, women hold fewer than 25 percent of science, technology, engineering and math (STEM) jobs. In 2010 (the most recent year that data is available), only 17 percent of computer science graduates are female, down from 28 percent in 2000, according to the NSF.

It’s not just women, of course, but all underrepresented minorities. Last year there were eight states where zero Latino students took the Advanced Placement exam in computer science, and 11 states where no black students took the test. In three states, not a single female student sat for the exam.

This is significant.

Many of today’s technology companies — whether they make hardware or software — provide tools to a broader society. Those tools might be a tablet or a smartphone; a health tracking app or a game; a word processing program or a document management tool. The majority of these projects are widely available to anyone who can afford them. And this is particularly true given the widespread adoption of smartphones, which, among other things, serve as a revolutionary way for developers to share their applications.

In the best instances, these products also solve problems. Many at least make life easier, some fundamentally change the world. Take GPS mapping apps and WiFi. Or apps that let users monitor their health information or compare prices for consumer goods. In many instances, one can see how technology developed by women might then be best suited to meet the needs of women.

This is not to say that every woman or underrepresented minority who works in tech will — or needs to — create technology that primarily benefits women or those minorities. But if we fail to give a real cross section of society the tools and the platform to make things, then they surely won’t. This is not even to mention, of course, the proven benefits of having a diverse workforce.

But even when women do work in the tech industry, it turns out they leave tech companies at twice the rate of men, according to the Center for Talent Innovation. They report being frustrated about their lack of advancement, the long hours and the lack of flexibility. These women report serious problems with their companies’ cultures.

That’s the bad news. The good news is that everyday we hear of new promising initiatives that will help fix the problem. Take Etsy’s developer program, organizations like Black Girls Code and university initiatives like one at Harvey Mudd. Each has come up with a creative approach to narrowing this gap.

There is more work to be done, of course. The so-called pipeline problem — not enough women and minorities getting the necessary education to work in tech (in both technical and non-technical jobs) is very real. Potentially even worse is the cultural problem, which shuts women and minorities out and continues to propagate itself.

Neither of those problems will get fixed without strong examples of how the community can raise itself up. Which is why we’re going to highlight those programs here as part of our Innovation for All series. Watch this space for inspiring stories of industry, government, and individuals coming together to fix this problem and make sure that everyone who is qualified has access to careers in the booming tech industry, no matter sex, race, or creed.

Alice Ruling Not Enough to Stop Patent Trolls

This post originally appeared in Roll Call.

The House and Senate bills were both carefully crafted to shift the playing field just a bit — to make it easier for small companies and individuals to defend themselves against patent threats while holding patent holders accountable for the lawsuits they file. Despite loud complaints from the traditional patent holder community, the bills’ provisions were actually quite modest, such as a requirement that patent holders set forth the basic framework of their case — who owns the patent, what product allegedly infringes the patent, and what parts of the patent are at issue. Or reasonable limits on discovery, usually litigation’s most burdensome and expensive phase that hits an operating company much harder than a non-practicing entity who has little to no information about its so-called business practice to share.

To be honest, I didn’t think the proposed legislation went far enough. But it represented an important compromise to fix a very serious problem.

Perhaps, most importantly, there was nothing in either bill that would prohibit a patent holder with a strong patent and a legitimate claim of infringement from bringing a lawsuit. Ownership of a patent alone should not be a blank check to, as President Obama said, extort money out of an operating company. This is not to say that patents do not have a place in today’s economy or to condone infringement. It is to say, however, that the current system is skewed way too heavily in favor of patent owners and this has to change.

We will only see this change through legislation. Strong champions of real patent reform — President Barack Obama, Sens. John Cornyn, R-Texas, and Charles E. Schumer, D-N.Y., and Rep. Robert W. Goodlatte, R-Va. — know this. So do the countless victims of patent trolls. Which is why the prospects for reform look especially good in the 114th Congress. It can’t come soon enough.

Every City Can Be a Startup City: The Promise of Entrepreneurship Across America

You can also read this post on Medium. 

This summer and fall, we rode a bus to cities in the Rustbelt and the Midwest, visiting communities where startups are thriving. The Rise of the Rest bus tour, organized by Steve Case, was inspired by the premise that great ideas, and great companies, can and should start anywhere. The cities we visited were vibrant examples of this belief, and the tour celebrated their successes in building startup communities and we hope, will help accelerate their growth.

Along the way, we also learned what it means to create and enhance the right ecosystem to facilitate emerging businesses in cities not traditionally considered hotbeds for startups.

That ecosystem is a powerful thing. “A community’s entrepreneur support network […] is critical for new firms to succeed,” wrote Yasuyuki Motoyama, Ph.D. and Karren K. Watkins in a recent report for the Kauffman Foundation. They examine the connections among entrepreneurs and organizations that make up this network, many of which were on display during our tour. In Des Moines, for example, one startup founder inspired another to take off. In Minneapolis and Cincinnati, long-established Fortune 500 companies are offering mentorship and other resources to new entrepreneurs.

What else does it take to form a startup ecosystem? Rise of the Rest sponsor UpGlobal, an organization that promotes and coordinates networks of startups around the world published a recent report entitled “Fostering a Startup and Innovation Ecosystem.” They point to five essential ingredients for a healthy startup ecosystem: talent, density, culture, capital, and the right regulatory environment. These ingredients are not geographically specific, and each city or region has the power to uniquely cultivate them in ways that complement and build on local resources.

Talent: Many of the cities we visited are within miles of major universities with talented, ambitious students who may have a vested interest in building businesses in their college towns. In Madison, at least two of the founders we visited were University of Wisconsin-Madison graduates and in Pittsburgh, Carnegie-Mellon University has spun out dozens of local startups through collaborations among students, professors and the local business community. And talent doesn’t just come from universities. Take Minneapolis, which has a high concentration of health professionals. It’s no surprise that health-tech is a growing sector there.

Density: Bringing people together can enable great things. Through business clusters in downtown areas like Kansas City’s Crossroads district or Nashville’s Trolley Barns, home to the Nashville Entrepreneur Center, entrepreneurs find space, support, and ideas. City planners and neighborhood associations are integral in facilitating the development of spaces like these.

Culture: In each city we visited, there was palpable excitement around entrepreneurship from the local political leaders, to the university representatives, to the business and investor community. Fostering a culture that prizes openness and creativity, accepts some level of risk and failure, and promotes opportunities at startups as well as their leaders is essential to supporting the startup ecosystem.

Capital: Access to capital cannot be underestimated. As we toured the country, it became more and more clear that raising money is one of the biggest challenges startups face. In some cities, like Nashville, we’ve seen local governments really commit to the startup community, which helps drive capital. But far and away the most important way to increase the flow of capital is to engage local investors and bring in more non-local investors, including those form the coasts. In each city we visited, this remained a major roadblock to the growth of the local startup ecosystems.

Regulatory Environment: As we know well here at Engine, good policy is critical for fostering the startup ecosystem. In some instances, local governments have recognized this by creating tax incentives for new businesses. Yet at the national level, there’s still a lot of work to be done. Many of the factors laid out here — especially talent and access to capital — are uniquely in the purview of federal government. The time for comprehensive immigration reform, which is necessary to increase talent pools, has long passed. And while passage of the JOBS Act was an important first start, there’s still much work to be done to ensure that capital flows from investors to startups.

These factors are each essential, but they’re not isolated. We know there’s a lot more policymakers can do to attract and retain talent in their districts and in this country, to encourage urban density and make capital accessible.

We believe every city in America has the potential to be a startup city and we’re working with policymakers to help make that happen.

If you’d like to help us join that fight, make sure you sign up for our newsletter here. 

President Obama Reiterates Support for Strong Net Neutrality

Yesterday, President Barack Obama unequivocally stated his support for real net neutrality, putting to rest any doubts about where he stands on the issue, emphatically opposing any rules that would allow ISPs to enter into paid prioritization agreements and create fast and slow lanes on the Internet:

"I know that one of the things people are most concerned about is paid prioritization, the notion that somehow some folks can pay a little more money and get better service, more exclusive access to customers through the Internet: that is something I’m opposed to," Obama said.

The President’s latest comments come as the FCC begins the process of sorting through the 3.7 million comments filed in response to FCC Chairman Tom Wheeler’s proposed rules to replace the Commission’s Open Internet Order that was vacated by a court ruling in January. President Obama’s position is consistent with the vast majority of those commenters, over 99% of whom want the FCC to institute strong net neutrality rules.

This is not the first time the President has publicly supported net neutrality. As recently as this summer, he trumpeted the importance of an open Internet. Yet the President’s strong words yesterday left no room for doubt: it is clear the Administration supports Title II reclassification.

Which is why, in opposing Internet regulations that would permit companies to pay ISPs for priority access, President Obama voiced his opposition to the FCC Chairman’s proposed net neutrality rules. Under the Chairman’s proposal, the FCC would permit any paid prioritization deals that were “commercially reasonable.” While it is entirely unclear what “commercially reasonable” paid prioritization deals would entail (one of many major problems with the proposal), the Court of Appeals that vacated the FCC’s prior rules made clear that, unless the FCC reclassifies broadband under Title II, any new rules will have to permit paid prioritization. If, as the President said, he wishes the FCC to refrain from promulgating rules “creating two or three or four tiers of Internet,” the FCC must act in accordance with the overwhelming tide of public opinion and reclassify broadband as a common carrier service under TItle II. Having the President reiterate his strong commitment to net neutrality rules should remind the FCC of the importance of its decision and the widespread desire for meaningful rules preventing ISP discrimination.

Kansas City: It Takes a Village (and Fiber)

This week we’re traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. Read our earlier updates from Madison, Minneapolis, and Des Moines.

We continued our tour across the Midwest today in Kansas City, a city with a rich history of entrepreneurship and a growing startup community taking off on the back of its incredibly fast, low-cost Internet access, courtesy of Google Fiber.

Notable in Kansas City is its engaged civic servants—we were joined this morning by Sen. Jerry Moran, Mayor Sly James (from KC, Missouri), and Mayor Mark Holland (from KC, Kansas)—and its community institutions, namely, the Kauffman Foundation. The Kauffman Foundation’s role in supporting entrepreneurship is acutely felt both here in Kansas City and throughout the nation, and its roots in the local community provide the basis for a city that has launched an initiative to be “America’s Most Entrepreneurial City.”

The Kansas City Startup Village anchors the city’s startup community. The Startup Village—a collection of homes hooked up to Google Fiber—provides office space for startups seeking to disrupt search (more on them below), using eye biometrics for security verification, and creating platforms to increase user engagement. Perhaps most importantly, the Startup Village might be the country’s first “Fiberhood”—a startup community that grew out of fast Internet access, proving that reliable and affordable Internet really does drive economic growth.

Like other communities we’ve visited in the Midwest, we met startups in Kansas City committed to making a difference. One was MindMixer, a company creating tools for citizens to engage with their local governments. But also like the other Midwestern communities, Kansas City has to contend with a culture traditionally averse to risk, a lesson we heard from local investors. The good news is that with the support of the Kauffman Foundation and the excitement local startups have generated, the community here is clearly on the road to continued growth.

That promised growth was on display during the day’s pitch competition, where we saw companies looking to disrupt post-college job placement, making government payments, and expanding personal wearables into the world of basketball. And today’s winner—Leap.it, a Startup Village resident—takes search and turns it on its head by adding visual and social collaboration. As Steve Case put it, the company is trying to disrupt Google by relying on Google Fiber.

The importance of that fiber here cannot be understated. The availability of fast and cheap Internet access has clearly helped make Kansas City an American startup destination. An engaged investor community, led by Kauffman Foundation (and amazing community cheerleader and Rise of the Rest bus tour guide Lesa Mitchell), also helps. Together, they’re putting Kansas City on the entrepreneurial map.

Des Moines: Startups Thrive in Middle Iowa

This week we’re traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. Stay tuned for updates from Kansas City and St. Louis.

Every four years, thousands of reporters descend on Des Moines to follow every move of presidential hopefuls at the Iowa caucuses, but there’s another reason to visit this small city in central Iowa. Its startup scene, which accounts for at least part of the reasons that Forbes named Des Moines the #1 City for Young Professionals in 2014, is on the rise.

So, why Des Moines? “I just happened to have been here and this place is awesome,” said Ben Milne, founder and CEO of the payment platform, Dwolla, one of the Des Moines’ most successful startups. But there’s clearly more to it.

Aside from the political caucuses, Des Moines is a major center for insurance and  agribusiness—industries that many startups have built business strategies around. The region has a reputation for hard-working residents as well as a low cost of doing business—17 percent below the national average. It’s also attracted a younger population in recent years through revitalization projects that added urban gardens, new retail, and entertainment venues to their downtown.

We stopped by Dwolla’s offices, where the company employs more than 40 people (with more in San Francisco, New York, and Kansas City). Founded in 2008, Dwolla has become a household name around Des Moines (and the entire country), inspiring others to start and keep their businesses here. Down the street, we visited Gravitate, a brand new co-working space where we met many startups, including Tikly. Tikly’s founder, Emma Peterson, told a story that highlights Des Moines’ strong community: it was none other than Dwolla’s Ben Milne who encouraged her to start her growing business.

We were also joined by Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds who both trumpeted the startup activity across the state, including in Iowa City and Cedar Rapids, where tour partners Seed Here Studio are based. Co-founders Andy Stoll and Amanda West lived all over the country and the world before returning to Iowa to grow the grassroots entrepreneurial and creative communities here in Iowa.

"In 2008, Cedar Rapids experienced the fourth worst natural disaster in US history, Amanda said. "Watching our state work through the clean-up process, we saw an opportunity to help the region not only rebuild but reimagine a classic American city for the Innovation Age. The movement today in Iowa is 2000+ people strong with many leaders. It’s amazing to see what is possible  just a few short years when brilliant people get connected."

The pitch competition featured many more startups and their ideas to improve construction worksite efficiency, update classroom technology, digitalize baby books, and eliminate medical appointment waiting times. The winner, Bawte, is poised to solve the age-old problem of cataloging the products you own, along with their  warranties and attendant details.

The network of startups in Des Moines is still “percolating,” as Dwolla’s Milne put it. Steve Case, along with our own Julie Samuels, gave some advice on what the community here can do to support it. “You need to get your stories out here,” Julie said. “People need to know what’s going on here in Iowa.”

There is a lot happening in Iowa. The engaged, tight-knit startup community is supporting its youngest members and creating jobs that are bringing Iowans back home. We can’t wait to see what percolates out of Des Moines next.

Minneapolis: Land of Lakes...and Startups

This week we’re traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. Stay tuned for updates from Des Moines, Kansas City, and St. Louis.

After driving 270 miles across the state of Wisconsin, we rolled into the Twin Cities that span the Mississippi River and spent Tuesday there. With over 3 million residents in the metro area and an impressive 18 Fortune 500 companies, including major brand names like Target and General Mills, Minneapolis and St. Paul are an economic force. There is a culture of hard work, innovation, and industrial success in the Twin Cities, so it’s not surprising that startups are increasingly becoming part of the economic landscape.

“Entrepreneurial energy is sweeping across this region,” remarked one business leader at our roundtable breakfast that kicked off another packed day of startup visits, a luncheon at the University of Minnesota, a livecast conversation with Steve Case, and finally, a pitch competition featuring ten CEOs.

We began the tour at CoCo, the nucleus of startup activity in Minneapolis, located on the historic trading floor of what was once the Minneapolis Grain Exchange. They’ve kept some of the old exchange boards intact, but on the floor are dozens of small businesses. We met teams from Zipnosis, Estate Map, Apruve, Rowbot, and others - each with a unique solution that capitalizes on existing markets and expertise in their hometown. And later, we stopped by Field Nation and Sports NGin, who’ve experienced substantial growth in the past year and have their own office spaces downtown.

Senator Amy Klobuchar also joined our crew for part of the ride. She shed light on the economic prowess of the area, (Minneapolis has the lowest unemployment rate of any major metro area, she told us), and discussed ways to support the startup community through policy and legislation as well as efforts like the Rise of the Rest.  

With Sen. Klobuchar on board, we learned about the Neighborhood Development Center, a 20-year-old organization in Minneapolis that trains, finances, and offers retail locations to low-income entrepreneurs, many of whom come from the Twin Cities' large immigrant and refugee community. The NDC’s premiere business space is the Midtown Global Market, a formerly vacant building that’s revitalized the surrounding neighborhood of South Minneapolis. The internationally themed public market hosts over 40 independent businesses selling speciality foods and products and has created 475 jobs in its time. The stories we heard here from entrepreneurs who had come to Minneapolis from all over the world were truly inspiring—a testament to how supporting entrepreneurship in its many forms can benefit a city’s residents, and its neighborhoods, at all levels of society.

The tour wrapped up at the Pitch Competition and the winner - 75F - took home $100,000 to help expand their business that makes wireless sensors and software to regulate building temperatures and thereby reduce energy use and costs.

What became obvious to us during our visit to this accomplished city is that there’s still immense potential for growth in the concentration and network of startups here. There’s room for the startup community to encourage more collaboration, garner more support and become more recognized in this city where the Fortune 500 companies remain the dominant economic influence. Steve Case and the Rise of the Rest team shared ideas about how to enliven this startup ecosystem, including encouraging big businesses to become customers of smaller ones, creating opportunities for mentorship, and sponsoring more initiatives like the Minnesota Cup, an annual competition that rewards new business ideas. Considering how things are going, we look forward to seeing what the entrepreneurs of the Twin Cities do next.

Madison: Thinking Big with Small Town Hearts

This week we’re traveling with Steve Case on the Rise of the Rest road trip to celebrate entrepreneurship, in all its forms, across America. Every day we’ll post dispatches from the cities we’ve seen. Stay tuned for updates from Minneapolis, Des Moines, and Kansas City.

Madison, Wisconsin is home to the University of Wisconsin-Madison, the state capital, and a growing and proud community of startups. We kicked off the second phase of the Rise of the Rest tour in Madison and found a tight-knit, collaborative, and supportive community of emerging businesses. Startups in Madison are creating new products in healthcare and education, taking advantage of local expertise in some of city’s top industries. They’re launching online marketplaces to revolutionize local rental markets and building platforms that crowdsource knowledge and passion for hobbies like craft beer and fishing.

On Monday, we visited many of these companies on a whirlwind tour of Madison. In addition to the innovative ideas coming out of each business we came across, we also experienced a real sense of pride and community here. One of the entrepreneurs explained the Madison ethos: “Thinking big with small town hearts.” “Madison is a perfect playground for validation because everyone’s on a first-name basis,” said a partner at 100state, a co-working space and organization supporting startup community.

Madisonians are energized about their city’s possibilities, thanks to established and engaged institutions like the Chamber of Commerce, the 43,000-student university, large anchor companies like American Family Insurance and Epic, and newer incubators and accelerators (including the local gener8tor). In fact, according to Capital Entrepreneurs, a local organization fostering the entrepreneurial environment, Madison startups raised over $44 million in 2013. Coupled with an affordable cost of living, that money is poised to go a long way here.

Our visit to Madison wrapped up with a pitch competition, where nine local companies vied for a $100,000 investment. We were encouraged to see that nearly half of pitching companies (including the winner, Solomo) were led by women—a more diverse group than we’ve seen yet.

We loved the friendly spirit and vitality of Madison, and we can't wait to see what great things they come up with.

Watch this space for more updates this week: we’re off to Minneapolis, Des Moines, Kansas City, and St. Louis!

Speak Up—or Slow Down: Why We Need A Day of Action for Net Neutrality

Internet users, advocates, and major tech companies will come together next week to make their voices heard: the time for real net neutrality is now. A long-awaited decision from the FCC on the future of net neutrality is imminent, and we’re excited to see companies that depend on an open Internet rallying together to let the FCC know once and for all that an Internet with fast lanes and slow lanes is unacceptable.

On September 10, major Internet companies—including Automattic, Cheezburger, Dwolla, Etsy, Foursquare, General Assembly, Kickstarter, Meetup, Mozilla, Namecheap, Reddit, and Vimeo—will join Engine and other tech advocacy organizations for a Day of Action that will give a glimpse at what the Internet might look like if the FCC’s proposed rules go into effect, and net neutrality as we know it is left by the wayside. Under the FCC’s proposal, Internet providers will be free to charge for access to special Internet “fast lanes,” leaving startups and others unable to pay these new tolls in slow lanes. In such a world, startups that can’t pay for fast lane access could see their sites slow down, their traffic vanish, and their funding dry up, harming the Internet and the economy.

For the Internet Slowdown on September 10, many participating companies will install widgets on their sites displaying a revolving icon (a common signal of slowly loading content) to symbolize how the Internet would function in a world without net neutrality. Others, including Engine, will direct their users to call or email policymakers. With over one million public comments already filed with the FCC, much has been written about why the FCC’s proposed rules would damage the Internet, but the FCC needs to see firsthand how Internet fast lanes would devastate startups.

To help make sure the FCC gets the message, join Engine and companies like Automattic, Cheezburger, Dwolla, Etsy, Foursquare, General Assembly, Kickstarter, Meetup, Mozilla, Namecheap, Reddit, and Vimeo on September 10 to show why real net neutrality rules are necessary to the future of an open Internet. For more information on the Day of Action and to learn about other ways to get involved, visit Battle for the Net or email evan@engine.is.

Engine's Response to Today's FCC Hearing on Net Neutrality Economics

We at Engine watched with interest as the FCC held a hearing today on economic questions related to its proposed net neutrality rules, focusing on “incentives to provide high quality open Internet access service and the relevance of market power.” Distressingly, though the hearing tackled many important questions about the economic incentives new rules would affect, relatively little time was spent addressing the immense negative impact on investment in startups that would follow from an abandonment of strong net neutrality rules. Too many witnesses—with Professor Nicholas Economides of NYU and Professor Jonathan Baker of American University as notable exceptions—failed to grasp the chilling effect on innovation that the paid prioritization model would cause.

Contrary to Hal Singer from the Progressive Policy Institute’s stunning claim at the hearing that allowing paid prioritization schemes would have no negative impact on companies that could not afford to pay for priority access unless ISPs actively degraded all non-prioritized traffic in absolute terms, paid prioritization unquestionably harms startups. Even with a so-called “baseline” service requirement, startups will be disadvantaged if their Internet speeds drop relative to established companies. Myriad studies show that consumers respond to even the most minute changes in website speeds. Millisecond differences in loading times can be a huge detriment to a startup’s growing business.

Simply put, allowing paid prioritization would greatly increase the cost of application development. In turn, higher costs would discourage entrepreneurs from starting risky companies and dissuade investors from putting money into startups that operate in such an imbalanced marketplace where wealthier incumbents pay for priority access.

The threat to innovation isn’t hypothetical. More than 100 of the world’s most prominent venture capitalists explicitly said in a letter to the FCC that they would be less likely to invest in startups that compete in established markets if the FCC permitted paid prioritization. If the FCC fails to understand that allowing ISPs to create and profit from Internet slow lanes will necessarily disincentivize investment in the next wave of startups, it will be putting the future of these companies and the Internet economy in grave danger.

It's Time to Talk Net Neutrality for Mobile

Last week, two of the FCC’s five commissioners came to Sacramento for a public hearing on the future of net neutrality regulation. While most of the debate regarding the FCC’s proposed rules issued earlier this year centered on how and if the Commission should implement net neutrality rules, the Sacramento hearing—organized by California Congresswoman Doris Matsui, a vocal proponent of net neutrality rules—took a step back from arguments over Title II vs. Section 706 (the main legal debate surrounding net neutrality) to think about the broader policy goals that the FCC should focus on in deciding on rules to replace the now-vacated Open Internet Order, regardless of what regulatory mechanism they decide to use.

We praise Rep. Matsui and the commissioners who joined her. Considering how important net neutrality is to citizens and businesses throughout the country, it’s necessary that policymakers tasked with charting a path for the future of the open Internet take the time to discuss these issues with people outside of the Beltway who will be impacted by the FCC’s decision.

In her opening remarks, Commissioner Mignon Clyburn addressed a key net neutrality issue—one that has received short shrift in the debate thus far: the need for net neutrality regulations that apply to wireless Internet service. Under the 2010 Open Internet Order that was vacated in January by the D.C. Circuit Court, the FCC’s rules against ISP blocking and discrimination applied only to wired Internet service, leaving wireless Internet service outside the scope of the rules. While, as Commissioner Clyburn correctly noted, non-neutral wireless broadband presents significant problems for low-income Americans and communities of color (many of whom rely exclusively on wireless broadband for access to the Internet), the lack of any net neutrality rules impacting wireless threatens every community of Internet users, especially the startup community, much of which heavily relies on wireless to connect to new customers and users.

In 2010, when the FCC issued its Open Internet Order, the FCC decided not to apply to wireless carriers the full anti-discrimination and anti-blocking rules it created to regulate wired broadband. The FCC justified this action on the grounds that the mobile broadband industry was still rather young in 2010; there was more competition amongst mobile carriers than their wireline counterparts; and operational constraints on mobile networks necessitated a more lenient notion of “reasonable network management” practices. These arguments were weak in 2010, and as the mobile broadband marketplace has changed, the FCC’s logic for exempting mobile from its net neutrality rules makes even less sense today.

As Commissioner Clyburn noted, the mobile broadband market has grown significantly in recent years, with LTE deployed to more than 120 million subscribers today, up from just 200,000 when the Commission issued its 2010 order. Not surprisingly, this increased mobile access has spurred a tremendous boom in the mobile application market. The global market for mobile apps and advertising was worth $38 billion in 2013, up from about $6.8 billion in 2010.

Some may point to these encouraging figures and conclude that there is no need for net neutrality rules in the mobile space. But, part of the reason the application market has boomed so much is because mobile ISPs have not yet engaged in widespread discriminatory activity—a norm that is beginning to change. Recently, mobile carriers have been entering into deals with some edge providers whereby use of these edge providers’ services does not count against a consumer’s data caps. While this may look like a great deal to consumers who are finding themselves being pushed into capped data plans, it will have the same crippling effect on startups that the creation of fast and slow lanes on the Internet would. Upstart companies will find it difficult or impossible to compete with large incumbent applications that consumers can use without incurring data charges, discouraging entrepreneurs from entering the market and investors from funding new application startups. Consumers may initially like having low cost access to popular apps, but consumer popularity alone isn’t synonymous with sound policy. Consumers also probably like the low prices a monopolist can charge to undercut new entrants and stave off competition, but permitting monopolistic behavior will ultimately ruin markets and consumer choice, threatening—as President Obama said—“the next Google and the next Facebook.”

Whether the FCC goes forward with its currently proposed ill-advised “net neutrality” regulations or uses Title II to enact meaningful non-discrimination rules, it must apply such rules equally to wired and wireless service. Failure to enact rules governing mobile broadband carrier discrimination—including zero-rating schemes—will stifle the booming market for mobile applications and allow mobile carriers to serve as gatekeepers for the millions of Americans who rely on wireless Internet access.

We’re Hitting the Road Again

As our representatives in Congress take to the campaign trail for the November elections, we’re taking a little road trip of our own. Next week, Engine will join Steve Case, Revolution, UpGlobal, and Google for Entrepreneurs on the second phase of the Rise of the Rest Road Tour.

Earlier this year, we joined this roving group visiting four diverse and vibrant cities—Detroit, Pittsburgh, Cincinnati, and Nashville— to highlight, energize, and celebrate entrepreneurship. And we found that startup communities are thriving all over the country. They’re building great new products, creating jobs, and revitalizing parts of the country that were hit hard by the economic downturn. We know this narrative holds true in other cities as well—we’ve seen it ourselves in places like Portland and Memphis, too.

That’s why we’re so excited to hit the road again. This time we’ll be stopping in some of the cities that make up the so-called Silicon Prairie.

We’re starting in Madison, Wisconsin, then will make our way to Minneapolis, Des Moines, Kansas City, and St. Louis. At each stop, emerging businesses and their founders, civic leaders, and local personalities will gather for conversation with Steve Case, participate in a $100,000 pitch competition, and come together over happy hours. And we’ll be on hand to remind startups how important it is to be engaged in policy issues (let us know if you’d like to catch up in any of those places!).

What we already know is that Silicon Valley and New York City aren’t the only hubs for new economic activity—and that incubators, accelerators, and innovation districts are sprouting up across the country. We’re excited to see in person just how these new and emerging startup communities are, as Steve Case put it, “innovating in ways specific to the economic heritage of their region.”

These cities have long-established industries in health sciences and financial services to build from, strong networks of colleges and universities from which to source talent, and support from local governments thrilled to welcome new business opportunities. That’s not to mention how the cost of living in cities across the Midwest makes them attractive for putting down roots.

We’ll be posting highlights from each city throughout the week. Follow us as we go and we’ll let you know what we find!

More information on the Rise of the Rest road tour, including times and locations for specific events in each city, is available at www.riseoftherest.com and by following #riseofrest on Twitter and Instagram.

Startups Head to Washington to Petition for Net Neutrality

After a week that saw a nationwide day of action prompt more than 300,000 phone calls to Congress regarding net neutrality and more than 3 million comments filed with the FCC in response to the Chairman’s problematic net neutrality rules, startups from around the country came to Washington to make the case for meaningful net neutrality rules in person. With all the attention paid to net neutrality in recent days, we had to make sure that voices from the startup community—including and especially the small businesses who need an open Internet—were being heard in the debate. Representatives from Etsy, Imgur, Meetup, Kickstarter, General Assembly, Dwolla, Vimeo, and Distinc.tt spent the day on September 17 meeting with key lawmakers and officials, explaining to policymakers why an open Internet is so important to their businesses and why the FCC needs to protect the innovative landscape of the Internet by enacting real net neutrality rules.

The startups began the day with a meeting at the White House, discussing their concerns about the Chairman’s proposed rules with key members of the President’s Office of Science and Technology Policy, including an appearance from newly-named CTO Megan Smith and Deputy CTO Alex Macgillivray.

While the President has already publicly expressed support for net neutrality rules that prevent ISPs from creating fast and slow lanes, the startups made clear to the White House that such rules are only possible through Title II reclassification. Having the President publicly support strong net neutrality rules earlier this summer was an encouraging development, and we are hopeful that the President will continue to pressure the FCC to make the correct decision on Title II reclassification.

The startups next made their way to the Capitol, where they participated in a press conference with Sen. Ed Markey—one of the most prominent and longstanding supporters of Title II reclassification—to further educate the public on the importance of the FCC’s decision. Sen. Markey was joined by Kickstarter’s Michal Rosenn, Dwolla’s Jordan Lampe, and Vimeo’s Michael Chea, each of whom eloquently made the case for Title II reclassification as the only way to preserve an open Internet for future innovators. The afternoon was spent in meetings with key members of Congress and staff, including representatives from both parties’ telecom subcommittees, net neutrality supporters like Sen. Markey and Minority Leader Nancy Pelosi, along with members like Reps. Hakeem Jeffries and Joe Crowley.

The eventful day was capped with a meeting with Leader Pelosi, who—in between coordinating her delegation’s voting on significant foreign policy issues—sat down with us to discuss her strong support of net neutrality. Her recent letter in support of Title II reclassification showed her willingness to stand up to the powerful cable company lobby and do the right thing to keep the Internet open and competitive for startups in her district and throughout the country.

We are incredibly grateful to the participating startups for taking the time out of running their businesses to let Washington know that, despite not having an army of lobbyists constantly campaigning on their behalf like the ISPs, startups throughout the country are committed to doing what it takes to ensure the FCC enacts meaningful net neutrality rules.  

DC Tech Breaks Out: Why Community Support for Startups Builds Better Ecosystems for Growth

In the three years we’ve been building Engine, growth in entrepreneurism and startups has increased at a breakneck pace, with new opportunities for growth popping up in cities and towns all across America. That growth has also been a political focus point, with supporters across the political aisle lining up to support new technologies and innovations. In this political climate hungry for opportunity to promote success, it’s not surprising that we have seen rapid growth in tech entrepreneurship in our nation’s capital, Washington, DC.

With organizations like our friends at 1776 supporting the local ecosystem and a renewed focus on innovating right in the heart of government, DC has quickly become a hotbed of entrepreneurship, attracting local startups and as well as transplants, like the Austin-bred RideScout. The best way to sustain and increase this growth is through lasting connections made through a healthy entrepreneurial ecosystem.

Enter DC TechDay. A “science fair for startups,” TechDay started in New York and will have their first DC event on October 2 that will bring emerging, high growth companies together with sponsors to learn about what’s being built in their own community. More than 150 exhibitors will gather with over 3,000 attendees to talk about their products, growing their businesses, and why they’re building in DC.

It’s also a great opportunity, as we have done with our Startup Day on the Hill events, to bring together policymakers and entrepreneurs to talk about what’s driving success and what both sides do to turn connection into growth. But with DC TechDay, that opportunity is all the more powerful with these entrepreneurs working just blocks away from Congress, the White House and regulatory agencies.

We’re proud to support efforts like DC TechDay. Contact us if you’re a DC-based entrepreneur or a policymaker looking to learn more about growth happening in your community, and get more information at dctechday.com.

Net Neutrality Reply Comments: Startups Unified in Support of Title II

With the reply comment period on the FCC’s proposed net neutrality rules closed as of last Monday and over 3 million comments filed with the FCC, it has become clear that protecting an open Internet is a massively important issue for the public at large. Just as citizens everywhere expressed unified support for Title II reclassification, startups from around the country made their voices heard this past week, calling on the FCC to pass real net neutrality rules.

On Monday, Engine filed reply comments with the FCC highlighting how the startup community has been clear and consistent in their demand that the FCC reclassify broadband as a common carrier service to protect the future of the open Internet. Startups of all sizes, from all parts of the country, and in all sectors understand that rules that allow ISPs to charge new access fees to Internet companies for preferential speeds and the ability to reach ISP customers will disrupt the essential character of the Internet and drastically curtail the innovation and economic growth the Internet has provided.

In their own comments with the FCC, larger companies like Tumblr, Kickstarter, and Etsy shared the same concerns as smaller startups like Lendup, Distinc.tt, and General Assembly, noting that the Chairman’s proposal would facilitate the creation of fast and slow lanes that would diminish investment in future startups, drive fledgling companies out of business, and make it impossible for companies being discriminated against to challenge improper ISP practices.

As the FCC reviews the millions of comments on its proposed rules, it’s crucial that the Commission understands that the startup community is aligned in its support of strong net neutrality rules. Startups throughout the country have demanded the FCC reclassify broadband as a Title II service; it’s time for the FCC to take their concerns to heart.

A Free and Open Internet Needs Some Regulation: Why Even Free Market Advocates Should Agree

We’ve heard a lot of good arguments by now in favor of net neutrality, including those from the 40,000 unique websites who participated in last week’s Internet Slowdown day, the millions of people who have filed comments with the FCC, comedian John Oliver on his show, “Last Week Tonight,” and members of Congress like Senator Angus King, Senator Patrick Leahy, and Leader Nancy Pelosi. By the deadline this Monday, the FCC had received a record 3 million public comments. And we’re hoping they’re taking these calls to protect the free and open Internet seriously.

Of course, those opposed to the FCC implementing rules to protect the Internet from discrimination have their own arguments. And these naysayers include not only the the obvious ISPs, but also many groups who claim that Title II option amounts to “dangerous” regulation.

But, as we’ve said before, they have it all wrong, at least from a free market perspective.

We caught wind of a remarkably well-argued and well-researched piece by blogger and software developer James J. Heaney. He makes a free-market defense of net neutrality, which indeed requires the“R” word—regulation. While regulation can occasionally be heavy-handed and overbroad, regulating ISPs under Title II doesn’t necessarily implicate these concerns. So as complicated as the laws surrounding net neutrality are, it may come as no surprise that the assumption that net neutrality guaranteed under Title II is in opposition to free market principles doesn’t quite add up.

If you have the time (and an interest in a short lesson on the invisible hand), we recommend reading the post for yourself, but in short, Heaney explains why an open Internet that operates within our notions of a free market should be protected by the FCC from monopoly takeover—under Title II.

He points out that nearly every believer in the free market system understands the importance of government’s role in reigning in monopolies, the mega-companies that stifle any and all competitors. And whether they’ve meant to or not, the ISPs we depend on every day have become natural monopolies. This gives them an unfair amount of power over consumers, not to mention every startup in the nation in need of an Internet connection (which we’re pretty sure is every startup).

Reclassifying ISPs under Title II as common carriers would make the Verizons and Comcasts subject to some government regulation, but what free marketers and any entrepreneur trying to create the next technological sensation should recognize is that such regulation would reduce the further monopolization of the Internet and, in fact, keep the marketplace open.

The FCC has broad flexibility to implement only the Title II regulations that make sense in the context of the broadband market. And applying Title II with sensible forbearance will actually give the FCC less discretion to regulate at its whims than what it could do under the rules the Commissioner proposed this spring. 

Startups seeking cost-effective ways to store data, fast channels to reach new customers, and open access to tools that will help them build their businesses deserve to operate in an environment protected from favoritism and the exploitation of power, a power that would allow ISPs to create fast lanes and arbitrarily raise prices.

We enjoyed Heaney’s important take on the issue, but whatever your ideology or however strong your feelings about the free market, supporting the Title II option, and with that, some regulation, is a necessity for the Internet—and our economy—to continue as we know it.

Dream Deferred: President Obama Delays Further Action on Immigration

As the 114th Congress hurtles toward the finish line of the November elections, we have watched--with great disappointment--the failure to fix the immigration issues plaguing our economy. Despite Congressional intransigence on the issue, it appeared earlier this summer that President Obama was planning to step into the void and take sweeping executive actions to address the growing crisis of our nation’s broken immigration system. Alas, we can now chalk up further inaction as, best case, another election year casualty; worst case, failure at all levels of government to fix a broken immigration system.

Earlier this week, the Obama Administration quietly deferred further action until after the November elections, apparently in an attempt to shore up politically vulnerable members of their party in hotly-contested seats. In so doing, they have left the millions of families already ravaged by government inaction in further limbo. Once again, they lessened our ability to remain competitive in a global marketplace by still failing to keep the gifted immigrant thinkers and doers--trained in our schools--here building companies.

It would be easy to write this off cynically given the electoral climate for the President and his party, but we must make this an opportunity to ask the Administration to do more, to live up to its commitments and to not sit idly by while families struggle with their status and businesses flounder without talent to drive their goals. Simply put, we can’t wait and wonder when inaction will turn to action, and we must resolve to send a message in this election season that delay won’t cut it.

As candidates return home this month and engage in their reelection campaigns in earnest, find them at the town hall, in the supermarket, when they visit your startup, wherever it may be, and ask them: how much longer we have to wait for them and the Administration to lead? Because we have waited too long already, and it is time for this President and this Congress to put people and opportunity ahead of politics and party and pass common sense immigration reform now.

A Bit of Change, and Many Thanks

I’m writing today because my day-to-day role with Engine is ending in late September, and I have a lot of people to thank. From the early days of SOPA/PIPA, through JOBS Act, through the release of our first economic reports, Startup Days on the Hill, Keep Us Here, Fix Patents, Net Neutrality and so much more, I'm proud that Engine has built lasting impact in our community and I’m confident that, going forward, Engine will continue to be a leader at the intersection of technology and policy and politics. And while I could not be more proud of helping shepherd that growth to this point, I also know we didn’t do it alone, and it is a testament to the hard work of this startup community across the U.S. that we, as a community, are better today and positioned positively for tomorrow and beyond.

If you have made a phone call, signed a petition, sent a tweet, advised privately on what’s important to you, met with a member of Congress, or gotten involved in the myriad other ways so many entrepreneurs have, I want to express my gratitude that Engine could be there in some small way to help turn those thoughts and actions into a national network for change for a community providing the backbone of America’s economic recovery. To our association and affiliate partners in these endeavors, it has been my highest privilege and distinct honor to fight these battles alongside you, and I look forward to doing so for many years to come.

And to my colleagues, who have taken a chance, have worked with us and helped this organization grow, I am particularly proud to be able to say we stood shoulder to shoulder, doing what we could in hopes of making our community and our country better.

While my day-to-day role is coming to a close, I’ll remain active as part of Engine’s advisory board, and look forward to continuing to grow this organization and support this community in that role. Now, more than ever, I’m confident in Engine’s continuing role in shaping this community’s further success, and can’t wait to see the results.

Make the Call for Net Neutrality

As you’ve likely heard, the Internet Slowdown, an Internet-wide Day of Action in support of net neutrality, begins tomorrow. Companies including Kickstarter, Netflix, Mozilla, Etsy, and Foursquare will have banners on their sites calling attention to the devastating Internet slowdown that will happen if net neutrality isn’t protected.

Support for real net neutrality rules is gaining momentum, with major political leaders like Nancy Pelosi joining millions of citizens in demanding that the FCC reclassify broadband as a Title II common carrier service. But, if we have any hope of protecting an open Internet, policymakers need to hear from startups about how important net neutrality is to their businesses. Net neutrality is more than a free speech issue—it’s also an economic issue. Contrary to cable company assertions, net neutrality has been the norm on the Internet for most of its existence, and it’s because of this openness that the Internet has been such a hotbed of economic innovation.

Without net neutrality, the next Google or Facebook may be throttled out of existence. We need you to take action to make sure the Internet is open for the next wave of innovators. Join us tomorrow by making a phone call to your senators asking that they encourage the FCC to reclassify broadband to protect net neutrality. Or, help spread the word by tweeting about the Day of Action and the need for an open Internet.

We hope you’re all planning to join! If you’d like more information, shoot me an email at evan@engine.is.