CNN Money: Washington is for lobbyists, not entrepreneurs

Written by admin on January 27th, 2011

CNN Money on the lack of a real business culture in Washington DC.

CNN

A hot Silicon Valley startup recently ran a discussion thread entitled: “What stops Washington, DC from becoming a startup hub?”

There are lots of reasons, but I think it comes down to culture and priorities.

For all its talk of change, Washington intoxicates people with the power of “bigness.”

President Obama asks the head of GE to be a “jobs czar,” even though entrepreneurial companies — that is, new companies — have been responsible for almost all new job creation since 1980, according to U.S. Census data. GE has dumped 34,000 workers in the U.S. since 2000. Still, it was able to borrow billions from the Federal Reserve in 2008 as part of the bailout at rock-bottom rates — at a time when small companies found themselves completely cut off from the credit markets.

What would be acceptable behavior in Silicon Valley just doesn’t cut it in status-conscious Washington.

My neighbors are firmly convinced that I must be unemployed. I don’t wear a suit. I “work” from home a lot. My daughter’s classmate’s father called me the other day and asked if maybe I wanted to do some consulting for him.

Venture capital is scarcer here, too. There are only a handful of VC firms in our area, compared to the hundreds that fill Silicon Valley. It makes sense. Washington is a region where capital can better be deployed starting a lobbying firm or bidding for government contracts.

Lobbying alone was a $2.6 billion industry in 2010, according to the Center for Responsive Politics. All that spending just sucks the oxygen out of the room for people trying to do true entrepreneurship.

 

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