Our local, regional, and state-wide small business support programs need to reflect the fact that not all start-ups are created equal and each type needs a different set of services to help it grow.

I've been a follower of Steve Blank's blog for lo these many years (I routinely steal his ideas and try to be good about not passing them off as my own but, well, it happens ...), and James Clary over at HRPDC recently pointed me to a good article by Steve in the Atlantic that is worth all of us reading and remembering.

Click HERE to read it.

The notion that not all small businesses are created equal is something that all entrepreneurs and investors understand, but it’s an idea that has been very difficult to get into the consciousness of public policy makers over the years. The first one I ever encountered who really got it was then Governor Warner. Rob Wittman, Virginia 1st District Congressman, is another. They are very few and far between.

One consequence is that state agencies like, for example, the Department of Business Assistance (DBA), continue to spend lots of time and money on programs that are only relevant to the lifestyle and "small business" startups described in Steve Blank's article (because those make up the bulk of the constituent population for most legislators) and fail to be relevant to the other models. Unfortunately, it is those other startup models that Steve Blank talks about (scalable startups, buyable startups, and large company startups) that ultimately produce the bulk of sustainable economic growth because they are at the beginning of the value-creation process. These are the ones that "make the pie bigger," and allow the other models (lifestyle and small) to benefit from an expanded overall economy.

Truth is, I continue to cringe every time a policy maker uses a blanket statement like "small business drives the economy" because what I hear is (1) a lack of appreciation for the fact that not all types of small business contribute equally to economic growth, and (2) a failure to recognize that the programs needed to support the local sandwich shop are not the same as those necessary to help a scalable startup that might someday employ hundreds or thousands of high-salary employees and return meaningful value to its investors.

If I could get one message across to everyone who is engaged in growing the economy, it would be that not all small businesses are created equal, and our public policy infrastructure needs to reflect the differing needs of each type.