A look at Central Coast entrepreneurial ecosystem
Entrepreneurship is a word we hear often, with good reason: More people are choosing to forgo the predictable paycheck as an employee for the opportunity to spin their idea into a tangible business of their own.
For the first time in five years, the Startup Activity Index rose in 2015, showing the largest year-over-year increase in the past two decades, according to the Kauffman Index 2015, Startup Activity National Trends. In 2014, the report states, roughly eight out of every 10 new entrepreneurs were not previously unemployed.
In California this year, 0.39 percent of the state’s adult population became entrepreneurs in a given month, according to the index’s state trend report.
There are also nearly 141 new firms per 100,000 residents, up from 137 in 2014. The Silicon Valley region of San Jose, Sunnyvale and Santa Clara, not surprisingly, leads the state in startups.
The Oxnard, Ventura, Thousand Oaks region was one of the top mid-large metropolitan areas of high-tech startups in 1990, according Path-Dependent Startup Hubs, Comparing Metropolitan Performance: High-Tech and ICT Startup Density (Ewing Marion Kauffman Foundation, 2013).
Instead of chasing Silicon Valley’s high-tech lead, though, our Central Coast region’s thriving entrepreneurial ecosystem has largely shifted to retail (bricks and mortar, and e-commerce) and manufacturing, based on data from over 600 businesses that have worked with the EDC-VC’s Small Business Development Center over the past 18 months.
These manufacturing businesses range from home-based crafters to companies developing scientific instrumentation. They’re always a reminder to me of how much manufacturing is a valuable — and viable — part of our local business culture.
Other categories included services, education, healthcare and agriculture. Real estate and waste management also represented new startup businesses.
Who is an entrepreneur?
In general, an entrepreneur is defined as a person who organizes and operates a business or businesses. So anyone who has a startup business or an innovation business built around one or more patents.
As an entrepreneur who’s started three businesses, I can tell you that not all these business people would consider themselves the stereotypical definition of an entrepreneur: outside-the-box thinkers and risk takers.
Data tells us that entrepreneurs run the gamut from millennials right out of college looking to build a career to older adults transitioning into a second career. The entrepreneurs we surveyed — whether young or seasoned — generally had some form of industry experience with their products.
Correlations to success included experience, a willingness to take little to no revenue for their household income in the first year, as well as the size of their supportive network including friends, family, mentors and industry experts.
Another big correlation to success was that a large majority of these businesses were spinoffs created by former employees of some of the larger firms in the region, which Path-Dependent Startup
Hubs noted as a national finding, adding that it has implications for economic policymaking and economic development strategies.
A majority of these businesses sought startup and marketing assistance from the SBDC. This is important data, as it shows that people are employing a strategic approach that will foster a business’s long-term sustainability.
As far as innovation businesses (those with patents), 76 percent are manufacturers. According to my survey, these SBDC client businesses had combined reported annual revenue of over $240 million for the region. The products spanned categories as diverse as aerospace and consumer products to healthcare, biomedical and agriculture.
These companies highlighted not only the importance of manufacturing in our region, but also the importance of innovation in those manufactured products.
Our county’s healthy entrepreneurial ecosystem is built on the strengths, resources and talents of the hard-working people who make the leap to open their own businesses. Their companies provide needed jobs and support our regional economy.
While the businesses may stay one-person operations, they might also grow to become the next Lynda.com. Either way, our region is richer for their talent and drive to turn a dream into a reality.
• Ray Bowman is the director of the Small Business Development Center of Ventura and Santa Barbara Counties. Bowman can be reached at 805-384-9157 or email@example.com.