Saturday, October 12, 2019

Nicklaus: Study on startup jobs should be wakeup call for Missouri - STLtoday.com

Nicklaus: Study on startup jobs should be wakeup call for Missouri - STLtoday.com


Nicklaus: Study on startup jobs should be wakeup call for Missouri - STLtoday.com

Posted: 22 Sep 2019 12:00 AM PDT

Missouri has notched some big economic wins lately with expansions by such companies as Amazon, Bunge and Square.

A new study, however, reminds us that most jobs aren't created hundreds at a time. They come in smaller batches from homegrown firms that are just getting started.

Entrepreneur support group MOSourceLink calculates that Missouri startups — defined as firms less than a year old with fewer than 20 employees — created an astonishing 44,355 jobs last year. That number was no fluke either: Between 2014 and 2018, the state's startups created an average of 40,797 jobs per year.

For perspective, last year's number amounts to 78 percent of all new jobs created in Missouri. We're talking about gross job creation, without accounting for companies that close or shrink.

Every year sees a lot of churn at both young and established firms, and, according to the Bureau of Labor Statistics, Missouri had a net gain of just 11,200 jobs last year. Without a vibrant startup scene, we probably would have been in negative territory.

The job creation figure doesn't surprise Jerome Katz, who holds the Brockhaus chair in entrepreneurship at St. Louis University. "Most of the job growth in America has been coming from small businesses," he said.

It stands to reason: Big business is relentless in its pursuit of efficiency, and every big merger is followed by hundreds or thousands of job cuts. For every Amazon opening new warehouses, an established retailer like Sears is shrinking.

Entrepreneurs, meanwhile, have to hire people to realize their dreams. It may be just one or two or 10, but the numbers add up.

"So much attention is paid to the Amazon headquarters search or new distribution center," MOSourceLink researcher Kate Hodel says. "We're trying to make the point that the smaller, growing firms are out there, they are important and they should be supported too."

While state officials are trying to put together a $50 million incentive package to support General Motors' plant in Wentzville, their support for startups has been spotty. The budget of the Missouri Technology Corp., which invests in early-stage companies and funds many support groups, including MOSourcelink, was slashed 90 percent in fiscal 2018.

"I hope this raises awareness among our legislators and economic development organizations across the state," Phyllis Ellison, a vice president at the Cortex Innovation Community in St. Louis, said of the job-creation study. "The startup community doesn't really get the same support that our larger corporations do."

Mary Louise Helbig, chief executive of ITEN, says the jobs numbers "reaffirm the story we've been trying to tell, that startups and innovation are really drivers of economic impact."

ITEN's own impact report says the St. Louis companies it supports have created 1,500 jobs since 2012. ITEN worked with 94 technology startups last year, a small fraction of the 19,115 new businesses created in Missouri.

The health-care industry accounted for the largest number of new firms, more than 8,000. Other hotbeds of entrepreneurial activity included construction, retailing and professional services.

Startup jobs are good jobs, too. The study shows that by the time a firm is two years old, its wages equal or exceed the state average. Among technology startups, wages are more than double the average.

The study also makes clear that, although the vast majority of startups are in the St. Louis and Kansas City areas, entrepreneurs are creating jobs in nearly every corner of Missouri. Too bad they aren't getting more support from state policymakers.

Get updates every weekday morning about the latest news in the St. Louis business community.

BeyondHQ, A Startup That Helps Tech Companies Set Up Second Offices, Plants Its Own HQ2 In Atlanta - hypepotamus.com

Posted: 08 Oct 2019 04:32 AM PDT

The rise of emerging companies moving their headquarters or opening a second office in smaller cities is actually not surprising when looking at socioeconomic trends: higher rents and cost of talent on the coasts, the trend toward flexible and remote work, and a better distribution of capital across the country.

But here's the thing: while it might benefit a new company to relocate from San Francisco to St. Louis in the long-run — it's actually pretty hard.

"Typically, a company at an early stage simply does not have an internal function in workplace operations or real estate. There is no one that is tasked with the high-level strategy and expansion work that comes with opening a second office," says Devorah Rosner, the Head of Operations at BeyondHQ.

That's where BeyondHQ will come in. A Bay area-based startup itself, BeyondHQ is a tech-enabled platform and services company that helps tech companies open second or third offices.

It works in three parts. First, a location strategy. Rosner shares that the company is building an algorithm-based tool that will "help companies determine, based on their key parameters, where the best places are to go for their second HQ."

"Whether its proximity, cost of talent, cost of living, proximity to work — things that are unique to each company will go into this equation."

From Anchorage to Albany, the company can select its new home. Then, BeyondHQ helps them address the second critical component: talent. Rosner says the recruiters who excel in Tier 1 tech markets often do not accurately assess candidates in other parts of the country.

"The recruiting teams in Tier 1 markets look at the resumes of locally-based candidates, and that tends to be the lens through which they look through every candidate. But if you were to talk to a candidate in, say, Des Moines, who's worked in John Deere's innovation center, a Bay Area talent sourcer may not have the lens to understand that kind of work."

BeyondHQ is building a network of talent partners across the country to help their clients form a successful team in their new city.

All these new team members need an actual space to work, and that's where BeyondHQ's third pillar comes in: real estate relocation. They partner with co-working spaces and brokerages to begin the search process, and then remain on as partners from "lease to launch," says Rosner.

"This goes all the way to figuring out who your office supply and food and beverage vendors should be," says Rosner.

She joined BeyondHQ earlier this year, less than one year after the company was founded by Madhu Chamarty, a Silicon Valley entrepreneur. BeyondHQ raised seed money in its early days from investors including Costanoa Ventures and Bloomberg Beta.

Rosner recently re-located herself to Atlanta, becoming the very use case that her new company addresses.

"I am now living our mission — to help companies expand outside of the coasts to increase the opportunities for knowledge-based jobs," she says. "So the idea of having a BeyondHQ office stationed in one of the markets that we champion made sense."

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