Encourage young entrepreneurs

I'm a chamber of commerce director in a small city. We have a couple of twenty-somethings who have written successful apps for the iPhone. I met one at a festival, and he told me he wanted to quit his job and work full-time on writing more apps and inventing web platforms, whatever that means.

He thought the local business community and the city should help him raise money to hire some advice about copyright protection and rent an office.

What is your opinion of the prospects for new technology businesses? How can we increase the odds of success if this young man does leave his job? I know that small business creates most of the jobs, something this town needs badly.

Bottom line is we would like to help but do not like big giveaways here either.

Editors' Reply: Our opinion is that most cities, small or not, should jump at the chance to provide appropriate governmental assistance and community encouragement for any budding technology entrepreneur.

This might entail bringing to bear state or federal economic development assistance programs.
We aren't big fans of tax increment financing and other forms of undermining a community's future tax base, but there are many worthwhile grant and technical assistance programs.

Like all new small businesses, technology-based business faces a high possibility of failure. Unlike more traditional brick-and-mortar businesses, though, tech business has a short time frame for breaking into success.

This is true because technological progress marches on, and if there is a slow rollout and there are numerous delays in raising capital, correcting mistakes, and adapting to change, some other business will overtake our little start-up.

To answer directly, success is by no means assured if your city and your community do everything they possibly can, including providing large monetary subsidies, to help the new business. You need to keep that in mind. Like an individual investor, a community shouldn't offer up more funding than it can afford to lose.

Especially in a small city, where it may hard for your two young would-be entrepreneurs to find other start-ups they can relate to, starting to provide a supportive culture may be as important as direct cash investments.

A supportive culture for technology business includes a streamlined process for permits, licenses, or zoning; informal monthly meetings for entrepreneurs; opportunities to provide insight for community members at large into how start-ups succeed; connections to seed capital and venture capital, which you could provide by linking your local start-ups with those in a larger nearby city.

Even if you don't have other technology-based businesses in your community, we think it's likely you have a few superb business people. Given that you're asking about young entrepreneurs, setting up a mentoring program could be very helpful.

For more detail, please see our entrepreneurship support page. Also scout about elsewhere on the site under Economic Development.

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