The Local Politics of Startups (Wendy Norris for Tekhne.co)
If any piece of federal legislature in recent memory deserved a digital lynching it was the evil twins, the Stop Online Piracy Act (SOPA) and Protect Intellectual Property Act (PIPA).
In its first real show of collective muscle, Internet startups launched a counteroffensive which ultimately forced the congressional sponsors to withdraw these dangerously misguided bills. We’re fortunate to have Internet watchdogs, like the Electronic Frontier Foundation, PublicKnowledge and others, that monitor federal laws, policies and regulations to provide an early warning system for a national call-to-action.
But who’s keeping tabs on state government which can have a much more immediate impact on the local entrepreneurial ecosystems from Fort Collins to Durango?
State legislatures can use public research funding, broadband infrastructure incentives and critical quality of life investments to stoke a vibrant startup culture. Issues important to Internet startups, like coworking, access to university resources and recruiting engineering talent, are simply not on the radar of the small business lobby at the capitol.
The political process can also have an outsized effect on the local business climate by the types of laws passed and the tenor of the public debates on the role of government in commerce.
We decided to run an experiment at Tekhne to gut check our hypotheses about the potential impact of state government on Colorado startups: Are lawmakers carrying bills that affect startups? Is the startup sector recognized as a viable economic driver in the state? Which lawmakers are most effective in championing startup needs?
We’re midway through the 2012 state legislative session and the results aren’t terribly encouraging, to say the least.
First, we discovered 39 bills introduced this session that would impact the local startup sector. That’s about eight percent of the 497 bills currently making their way through the House and Senate chambers in a year when lawmakers on both sides of the aisle are clamoring to take credit for kickstarting the recession-weary state economy.
So we created a Colorado bill tracker that includes a list of proposed laws and their current status as well as in-depth pages on each bill with annotated full text documents, information about the sponsors, vote tallies and news/blog links.
The bills ranged from some good ideas like creating new startup seed funds to commercialize university tech and medical research, establishing a venture capital advisory board and promoting entrepreneurism. There was also a fair amount of bureaucratic pencil-pushing from Republicans and Democrats to tweak existing regulations. This session featured the typical partisan free-for-alls on immigrant employees and business owners’ gun rights, and the always popular election year states’ rights chest-thumping displays.
Next we found that the importance of startups to the Colorado economy—from e-commerce and enterprise software to consumer tech products—isn’t well represented under the Golden Dome. Unfortunately, like their federal brethren, state lawmakers are often woefully uninformed about the unique business models, operating principles and capital needs of Internet enterprises.
That was evident in the questionable value of many of the bills, the underwhelming hearing testimony, the lack of hearing witnesses from startups, and conversations with the politicians themselves—many of whom lack even a basic understanding of startup finance, regulatory issues and the size/scale of the sector statewide.
Our last hypothesis on legislative movers and shakers is a work in progress. The Tekhne Eta Value is a formula that computes each sponsors’ political power efficiency to move the 39 bills we’re tracking through the legislative process from introduction to enacting it into law.
One would imagine veteran lawmakers who know the parliamentary ropes and those from startup-centric districts would have a leg up. So far, that’s not how it’s shaking out. Look for the Eta Value to be released at the end of the legislative season for hints on who could be effective sponsors for future startup-friendly bills.
All that being said, it’s pretty apparent we’ve got some work to do in educating ourselves about the state legislative process too. Informing lawmakers about our industry and connecting with them to move quality bills—or at least squash bad ideas before they hit the committee desk—is also a high priority.
Rather than fire up the digital torches and pitchforks, we’ve got some ideas on how to improve our chances for better legislation coming from the state capitol:
- Bring your Lawmaker to [Event] Day. Personally invite lawmakers, policymakers and state regulators as a guest to our events, think New Tech, Open Coffee Clubs, Boulder Beta, hack days, Startup Weekend, coworking events, etc., to better inform them about the local startup sector
- Crowdsource bill ideas for the 2013 legislative session to improve the quality and value of proposed legislation
- Expand the bill tracker as a real-time legislative ticker for state and federal laws with built-in feedback loops to gauge community support that lawmakers can tap into
- Create a public API for state rules and regulations as a one-stop shop for incorporating or operating a startup in Colorado after those bills become laws
- Demand statehouse leaders provide more transparency on the origin of bills. Too many legislative proposals are sent up at the behest of corporate special interests that risk stoking serious negative impacts on the growing national reputation of the Colorado startup ecosystem.
Too often political news reflects a gladiator-style battle of partisan interests that feels irrelevant and frankly pretty obnoxious to the startup community that operates under a spirit of cooperation and optimism. At Tekhne, we want to turn that tired old partisan equation on its head. Whether and how we engage in the political process is up to us. But the legislation will happen whether we’re in the ring or not to improve it—or defeat it, if necessary.
Our success in stopping Congress from enacting SOPA and PIPA was an amazing instance of startups coming together—across the gamut of our own diverse political identities—against a very well-oiled machine.
Now it’s time to do the same in the states where the stakes are just as high.
Wendy Norris is the CEO and Publisher of tekhne media.