Unlikely Bedfellows

Unlikely Bedfellows: After Years Of Benign Neglect, City Hall Re-Engages With Startups

By James F. Sweeney

To listen to the people sitting at the table at Seattle City Hall a few days before the 4th of July you would think Microsoft had gone broke, Amazon had abandoned its plans for world domination and Tableau, Zulily, Bungie, Zillow and the rest had just announced plans to relocate to San Jose.

Representatives from Microsoft, Google, the city’s largest venture capital firm, the University of Washington and others spoke darkly about competition from New York City, Los Angeles, Denver, Austin, Boston and even Detroit. The consensus was that Seattle has to act now to avoid being overtaken as a center for innovation and entrepreneurship.

“We, collectively, feel an incredible sense of urgency to bring our best fight to the table as soon as we possibly can to be able to compete globally and nationally for talent and capital for innovation,” said Chris DeVore, general partner of Founder’s Co-op, a seed-stage investment fund. 

UW Computer Science Prof. Ed Lazowska spoke of a “talent gap” and “cluster gap” and said, “We’ve got to take some real action to gain some visibility and seize this opportunity.”

Never mind that the local tech economy and startup scene are the envy of almost every other city in the country, Seattle’s entrepreneurs are scared. So scared that they’ve done the unthinkable – they’ve turned to government for help.

Danger and opportunity

For a long time, Seattle’s municipal government and startup community largely ignored each other and everyone was happy.

The entrepreneurial economy has thrived with little or no help from the city, leaving the city fathers free to concentrate on other matters. Like entrepreneurs in many cities, Seattle’s innovators view government as a swamp of bureaucracy and red tape, an institution to be avoided at all costs except when it’s necessary to petition for something.

But in spring 2012, entrepreneurs approached Mayor Mike McGinn. They saw trouble – and opportunity – on the horizon. Yes, Seattle is doing very well, but other cities are gaining ground. New York City Mayor Michael Bloomberg and Cornell University had announced a partnership to build a new tech university in the city. Startup scenes in LA, Austin and elsewhere are getting a lot of attention. But Seattle also is banking on a decline in Silicon Valley’s dominance in entrepreneurship and a chance to lure more startups to the Pacific Northwest.

The city was thinking the same thing.

“Resting on your laurels is a good way to have other people pass you,” said Sol Villareal, the mayor’s community engagement coordinator.

So the city held a roundtable in May 2012 and, like governments do, it formed a commission to further study the matter, a commission that had to persuade some entrepreneurs to participate.

“When I first heard about this initiative I was very skeptical because in my first 15 years at Madrona . . . I never once had any contact with the city on any issue whatsoever,” said Greg Gottesman, a managing partner at Madrona Venture Group, who added that he has been happy with the process so far.

That commission met for a year, and in May 2013 it unveiled the Startup Seattle Initiative , which calls for the city to:

  • Take over the StartupSeattle website, hire a startup business liaison, design an incentive package of free or discounted business services for new businesses and develop a marketing plan.
  • Partner with Startup Weekend and other local companies to attract more high school students to technology fields.
  • Create more innovation “hubs,” particularly near the University of Washington.
  • Work with developers to improve broadband speed and access for residents and businesses.

An unlikely partnership

It’s an ambitious, but not overreaching plan, and  it will be a test of whether two very different cultures and ways of operating can cooperate.

James Keblas, head of the city’s Office of Film + Music, is shepherding the initiative for now and is counting on his experience with notoriously difficult musicians to help him work with entrepreneurs.

“Tech startup people are a very strange sort of folk,” he said. “When we first approached them and said we want to help you, they looked at us like we were crazy.”

What the government can do and startups cannot, he said, is market Seattle nationally and internationally as a center for innovation, link businesses to resources and act as a neutral third party above the rivalries and distrust of the city’s startup scene.

It’s sometimes difficult for entrepreneurs to acknowledge that there are things government can do better than them, said DeVore. For example, everyone is in favor of redeveloping a rundown neighborhood at the western edge of the University of Washington into an innovation hub. Business can supply the talent, but it can’t rezone or build a light rail station, which is what the government and the university plan to do.

Seaton Gras, founder of SURF Incubator, said there is a role for government to play, particularly in marketing and removing regulatory obstacles to growth.

Though on board, Madrona’s Gottesman is skeptical: “My expectation is we’ll be here in nine to 12 months and be talking about this some more, and that would be a shame because with startups, everything is timing.”

John Cook, a former newspaper reporter, is co-founder of GeekWire, an online news service that reports on Seattle’s tech scene. A member of the original commission, he has since stepped down to avoid any conflicts with his journalism responsibilities. Though a fan of Startup Seattle, he is dubious about how well government and startups can work together.

“The two worlds move at different paces and they have different concepts of how things happen, and I don’t know how you reconcile that,” he said.

Already there is eye-rolling among entrepreneurs over the fact that the city has not yet hired a business liaison, a job the city promises will be filled no later than January.  Others worry that the initiative is just an election-year headline for Mayor McGinn, who’s in a tight race for re-election. Still, they feel there’s too much at stake not to cooperate.

“I think it’s a baby step,” said Cook. “It’s a step in the right direction, but you’ve got to start somewhere.”

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