Besides Money, What’s Missing from the NJ Tech Startup Ecosystem? Part Two
For our end-of-year story, NJTechWeekly.com posed one question to several thought leaders in New Jersey: Besides money, what’s missing from the New Jersey tech startup ecosystem? The goal was to try to get to the heart of why the state’s startup community seems to always take one step forward and two steps back.
We asked these thought leaders to pick one thing to discuss, but many couldn’t pick just one. While the tech startup ecosystem in New Jersey has come a long way in the nearly five years that NJTechWeekly.com has been covering it, there is still a long way to go. Perhaps by uncovering some of our weaknesses, we can address them and make our community stronger.
Dennis Bone, the inaugural director of the Feliciano Center for Entrepreneurship, in the School of Business at Montclair State University, says that New Jersey’s tech startup and entrepreneurial ecosystem needs big, bold moves, but adds that the tide is turning.
Big, bold moves have been missing in New Jersey’s tech startup and entrepreneurial ecosystem.
There have been a lot entrepreneurship efforts already happening around the Garden State. There are several active and robust Meetup groups that hold regular events on tech topics. These groups, including our Montclair Entrepreneurs Meetup, charge low or no fees to attend events, making it easy and affordable for entrepreneurs and startup founders to hear valuable tips from expert speakers while also networking.
Yet these efforts have been fairly splintered, and many of the groups are stand-alone entities. There is no center of gravity to serve as the hub for the entire state. What we need now are some big, transforming investments to create that hub. And it seems they are happening.
- In Jersey City, a $230-million project has been announced to develop “SciTech Scity,” a science and technology campus on land surrounding Liberty Science Center. Also, WeWork expects to create 723 new jobs at its planned Jersey City location in a mixed-use high-rise at One Journal Square. WeWork provides office space to startups, bringing an influx of even more innovative talent to Jersey City.
- In Newark, NJIT’s Enterprise Development Center has a proven track record of success, having nurtured more than 90 companies. Added to that is Newark Venture Partners’ commitment, announced last summer, to raise $50 million to invest in tech startups, develop an accelerator, and provide office space in Audible’s building.
I believe it is investments and commitments like these in Jersey City and Newark that can help create the needed center of gravity where startups can work, collaborate and thrive. I’m encouraged, too, that the efforts in both cities involve private, governmental and nonprofit entities.
If you get to a tipping point, there have to be big investments to move the needle further. I believe we are at that point, and the tide is turning.
Charlie Patel, cofounder and chief technologist of JuiceTank (Somerset), who also publishes New Jersey Startup Digest says that our ecosystem lacks synergy and cohesiveness.
Synergy is missing from the New Jersey tech entrepreneurship ecosystem. The desire to create an ecosystem where the whole is greater than the sum of its parts is not yet evidenced in the various programs and initiatives throughout the state. What exists seems to be a sporadic and uncoordinated effort.
We need a conscious and collaborative effort focused on allowing startups to succeed, create new jobs and contribute to the economic development of the state.
Consider the various elements necessary for a thriving ecosystem, such as:
- Funding – While New Jersey startups have several channels available for funding, early-stage companies are typically not a focus for many of the investment funds or angel investors.
- Regulation and legislation – Without question, New Jersey is not a great place to launch a business. See the NJBIZ article published recently that ranked New Jersey’s business tax climate as the worst in the U.S.
- Talent – New Jersey residents are tremendously capable. However, we lose much of that talent to our neighbors in New York City and Philadelphia.
- Culture – We’ve seen sparks across the state that help foster the startup culture.
- Market – New Jersey politics and businesses still have a legacy mindset that favors large corporations and Big Pharma, so these companies get incentives and tax benefits while startups and small businesses are constrained.
- Infrastructure – There is a healthy degree of access to mentors, successful founders, and work environments.
A collaborative effort to improve these startup-ecosystem elements would generate the returns and visibility that are currently missing in New Jersey.
Carlos Abad, founder of LaunchNJ, says that entrepreneurial literacy is missing from the New Jersey tech ecosystem.
Since LaunchNJ focuses on idea-based and early-stage startups, I’m going to be biased, but what I feel is missing most in New Jersey’s entrepreneurial ecosystem is entrepreneurial literacy. We have many smart, driven entrepreneurs who have great ideas but still think the best way to start a company is by creating a business plan.
Very few know how to use tools like Lean Startup Machine or the Business Model Canvas. There are several ways to address this problem. One way would be to build a vibrant entrepreneurial ecosystem that has serial entrepreneurs and mentors who can help guide startups. LaunchNJ and others are working on this, but it will take many years to fully develop.
A more immediate solution would be for our universities that have entrepreneurial programs to create stronger bonds with nonstudents the way that Stanford does. Our schools already offer the necessary programs to their students, but it would be great if they could break down these courses into workshops for people with busy schedules. It would be even better if our local government could help finance this education. Maybe the New Jersey Economic Development Authority (EDA) could take this on. Improving New Jersey’s entrepreneurial IQ won’t be easy, but we have the resources to do it. And if we work together, it can be done.
