BY STEVE BLANK
Steve Blank is a former entrepreneur, a
co-author of The Startup Owner’s Manual,
and a lecturer at Stanford and UC Berkeley.
Government Is the Problem. It’s also the
solution—if both parties can get smarter
With the presidential election just weeks away, both parties
are talking about entrepreneurship. In some respects, that’s
encouraging: It shows that policymakers finally understand
what really drives the economy. But it also is depressing, as
neither party can resist repeating the usual myths about what
makes start-ups thrive.
On the Republican side are the usual calls for the government to get out of the picture entirely, the arguments that
innovation hubs like Silicon Valley can flourish only in the
hothouse of a free market. Democrats call for the government
to invest in particular industries, even individual firms. Neither
stance is entirely accurate. And neither does much to help
the nation’s entrepreneurs.
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Let’s take on the GOP myth first. Whatever the merits
of free markets, the fact is that Silicon Valley was born when
Lockheed set up an assembly line to make submarine-launched ballistic missiles during the Cold War—an effort
directed by the federal government and funded, of course,
by taxpayers. What’s more, the feds essentially created the
Valley’s venture capital industry back in 1958, with the Small
Business Investment Corporation, which was created to
spur private capital investors.
As for the Democrats, we’ve seen what can happen
when the government tosses free money around and makes
outsize bets on individual companies
Silicon Valley, Pre-Silicon
The Valley emerged during the Cold War, when this
Lockheed plant began building ballistic missiles.