Seeing the news that Obama advisor and Delaware native David Plouffe has signed on as a senior executive with the start-up car service Uber, it is hard not to note that this avatar of the new digital economy unfortunately doesn’t offer its services in Plouffe’s hometown.
Unfortunate, because Uber is on a tear, but they are going where the action is. The company has expanded rapidly over the last 18 months, and you can get an Uber car in just about any semi-significant city or region of the country.
The typical Uber market is a hub of economic and social activity. Beyond the big, obvious cities – the Bostons, Denvers and Atlantas – this tends to be places that attract young people and evoke a certain buzz.
Uber is in Lubbock, Texas, a place called Piedmont Triad, North Carolina and even a hot spot like Flint, Michigan. The service is available in New Jersey, Maryland and Pennsylvania.
You can in fact dial up your Uber app for a ride in Wilmington — Wilmington, North Carolina.
So why is Delaware still on Uber’s TBD list?
It is a question everyone in this state should be asking as we continue to struggle to define an economic identity for the 21st century.
The “Uber economy” is an organic one. It does not operate in a top-down fashion. It is fueled by creative people pursuing their passions and often leveraging technology for new commercial opportunity. This economic mindset is characterized by risk and disruption.
In our small state of Delaware, these can be particularly difficult concepts. There are untold benefits that come with our size, but on the tail side of this coin is the reality that intimacy can sometimes impede progress. In any small community, transformations that require sometimes painful change – of ways of thinking and doing things, of institutions – are not abstract, they are deeply personal. Therefore, needed change can be put off or avoided altogether.
Risk is an entrepreneurial impulse that our local business culture doesn’t naturally encourage. We talk often and rightly about our proud heritage as an innovative leader in the sciences, banking, corporate governance, etc. We have a strong history as a manufacturing base. But there is a tendency to cling to a past that relied heavily on major institutions when it came to employment and community life itself, institutions that became intrinsically risk averse over time. Delaware is perhaps too much the corporate state in the age of the entrepreneur.
A recent study suggests that these factors may be contributing to a decline in business dynamism in Delaware that since 2009 has seen fewer new firms entering the market than those leaving it.
So what can we do to create a more entrepreneurial, start-up “Uber” culture? That’s the question I put to a half dozen of Delaware’s brightest business visionaries. These individuals – who have built and run companies small and large, started venture funds an invested in and mentored start ups – agreed on a few key themes:
The University of Delaware is pivotal. Across the country, universities are increasingly playing the role of catalyst in creating talent and cultivating economic opportunity. Places like Austin, Texas, Ann Arbor, Michigan, and even Pittsburgh, PA have become entrepreneurial meccas, fueled by institutions that incubate risky, sometimes far-out ideas. One of my ad hoc panel members remarked, “UD has to take a much stronger role in driving a start-up culture by providing work space, computer access, student supported projects, professor mentoring and other services.” Another talked about curriculum, saying a shift away from chemical engineering toward “a strong and rigorous computer sciences degree combined with the University’s math program” is essential.
Get behind what we’ve got. When and where start-ups have gained traction, we need to support and accelerate the multiplying effect of their success. As one example, lo and behold, Delaware has a humming local food and drink economy. Companies like Dogfish Head, Mispillion River Brewing and the Painted Stave Distilling are building a critical, boutiquey mass in a growing marketplace with national reach. We need to incentivize and nurture new start-ups in that space while supporting the knock-on business opportunities their success will create.
Tell a more compelling story. Speaking of Dogfish Head, their charismatic founder Sam Calagione is a superb ambassador for our state. We need to take a page from his book and do a better job of highlighting and promoting home-grown entrepreneurial success stories. Being a corporate locus is going to catch the eye of some lawyers and accountants, but it doesn’t carry much relative appeal to the entrepreneurial hipster looking to build a business in a cool place. One of my panel members pointed out that each year the state has a massive captive audience: the millions of people who drive through our state on I-95. Why not capture their attention with the clear message that if you want to start a business, Delaware is the best, easiest place to do it?
Reduce costs and barriers. All the entrepreneurs I spoke with said that the cost of doing business in Delaware is too high. When it comes to energy, for example, there was concern that “Delaware commercial and industrial customers pay much more than competitors in adjacent states.” Another problem is regulations: there are just too many i’s to dot, t’s to cross and fees to pay in starting a new business here. One of my focus group members pointed me to a new law in California – Jerry Brown’s California! – making it easier for people to start businesses out of their homes.
This brings us full circle back to Mr. Plouffe and his new role at Uber doing … what? Reports say his job is to ease the way for Uber’s expansion by helping politicians see the wisdom of reforming an antiquated, highly-regulated taxi industry that hasn’t kept up with what the market demands. (A role that has been rightly recognized for its irony.)
Metaphorically speaking, that’s a cab we need to catch.