John Dearie's Center for American Entrepreneurship
European Straits #110
Dear all,
I’m spending this whole week on the East Coast of the US, along with my colleague Zineb Mekouar, who’s in charge of public affairs at The Family. Indeed that is a field in which Zineb and I have a lot to learn from the Americans. But considering that our trip is about promoting my book Hedge, I do like to think that we Europeans have a bit that we can share with our American friends, too.
I already experienced that on Sunday, recording a podcast with Colin Mortimer of the Neoliberal Project (which is about reinventing liberalism in the American tradition rather than promoting Margaret Thatcher’s ideas). Then on Monday Zineb and I attended a book club around Hedge at Tech:NYC. As for yesterday, it was dominated by a discussion with our friend Ian Hathaway and other guests at Columbia University about a new Safety Net for the Entrepreneurial Age.
Then we travelled to Washington, DC for the second act of our trip, with highlights that include connecting with Chris Schroeder, author of Startup Rising: The Entrepreneurial Revolution Remaking the Middle East, a briefing of the New Democrat Coalition on Capitol Hill about the future of work, meetings at the World Bank, connecting with the libertarian-progressive Niskanen Center, and a dinner with a group of economists, policymakers and journalists interested in learning more about my book.
John Dearie and the Center for American Entrepreneurship
Alongside Ian Hathaway, no individual has been more instrumental in setting up this heavyweight program than John Dearie, the founder and President of the Center for American Entrepreneurship (CAE). I wanted to share a few thoughts about John’s work, not only to express my gratitude to him, but also so that you know a bit more about the important organization he founded just two years ago.
I’ve known about John since 2013, the year he published Where the Jobs Are: Entrepreneurship and the Soul of the American Economy, co-written with Courtney Geduldig. A friend who had been visiting the US told me that I should read it, as my cofounders and I were already busy building The Family in Paris.
At that time, John was working in financial services and reflecting on job creation in the aftermath of the financial crisis. To better understand the barriers to creating jobs, he embarked on a tour across the US to meet groups of local business owners and listen to what they had to say. After all, it was constantly repeated that small and medium businesses formed the core of the US economy and were the main contributors to job creation. But what was the reality? And how could the financial services sector better serve job creation?
What John discovered was that the story about SMBs creating most jobs was, well, much more of a story than the truth. A powerful lobby of business owners had been pushing that idea forward for decades. But in reality, the world of SMBs is divided in two. Most remain small or medium forever and those don’t create jobs. Other SMBs, however, are young companies on a path to growing into large businesses, and that is where most jobs are created. Jobs are not created by stagnant businesses, whether small, medium or large, but by young businesses that are in the process of expanding and diversifying.
This was a powerful argument for us at The Family. What we’ve been interested in from the start are scalable tech companies, those with a potential for exponential growth. But in France as in any developed country, policymakers had a very hard time seeing the difference between those two worlds—between small and medium companies that do steady business but never grow and startups that, to borrow the words of the McKinsey Global Institute, either grow fast or die slow.
Indeed here was one reason why startups are so important: net job creation is the result of just a few companies scaling up and compensating for all the jobs that are destroyed in other parts of the economy. If we wanted France (and now Europe) to create many jobs again, the mission we established for ourselves at The Family, to support ambitious entrepreneurs that build fast-growing tech companies, was critical. And this was all made crystal clear by John’s and Courtney’s book, Where the Jobs Are.
I started following John on Twitter and we exchanged a few likes and replies from time to time. But we didn’t really have any reason to interact beyond my sending him a note to thank him for his work. It’s only now, five years later, that we’ve been properly connected—through Ben Wiener, a Jerusalem-based venture capitalist, who pointed out my work to London-based Ian Hathaway, who then connected with me in the UK—and who happens to be the Research Director at the CAE!
So what is the CAE about? What John Dearie discovered after having written Where the Jobs Are is another thing that sounds very familiar to me: It’s not because an idea is carefully laid out in a book that policymakers will suddenly start paying attention. To convey the message, you need to do much more than write a book, you need to really become a lobbyist for what’s in it. And lobbying in the US is even more challenging because so many well-funded groups and individuals are competing for policymakers’ attention. It demands a day-to-day effort at building relationships with people who at some point will need your help with drafting policy.
And so this was John’s diagnosis: There wasn’t a lobbying organization in Washington, DC to make the case that young, growing businesses and small, stagnant businesses are two different things—and to defend the interests of the former as they’re the ones contributing to net job creation. And so this is what the CAE is doing by being in Washington, DC: being part of the social life of the capital; building relationships with policy people in every part of the complex US political system; and advancing a pro-entrepreneurship agenda in a city that still doesn’t really understand what entrepreneurship is about.
Hats off to John, Ian, and their team for their wonderful work—and a big thank you for their interest in Hedge and having been so helpful at conveying its message in the federal capital!
News
🇺🇸 The rest of this week will be spent mostly in Washington, DC, followed by a brief stay in Philadelphia. Apart from the things listed above, on the agenda are a meeting with Martin Gurri, author of the recently published The Revolt of the Public, a lunch with Marginal Revolution’s Alex Tabarrok and Tyler Cowen, and various other meetings.
🇬🇧 Next week will be quiet, as I’ll spend it in London and will try and catch up on long-form publications whose drafts have been waiting for too long on my desktop. That includes a 11 Notes on BlackRock and a report on startups in Israel (long overdue!).
📗 Don’t miss these recent pieces by my excellent colleagues at The Family:
A strong statement by Maïté Hourcade dit Bellocq about what it takes to be a good entrepreneur: Dare or Die
A report on the startup community in Warsaw, by Mathias Pastor: Warsaw: A Lesson in Outliving Toxicity
A discussion of the new generation of spontaneous politicians, by Zineb Mekouar: Expose yourself: Spontaneity has become the best political tool
On how The Family is designed to support the mental health of startup founders, by Emilie Maret: We’re all in the business of mental health
Also this video of an event we recently hosted in our Paris office, with Erika Batista: The state of European tech 🤙Atomico, Ledger, Qonto, Gaia Capital & The Family
Finally, after a long hiatus I published a new article on Forbes: Silicon Valley Fits Its Market Now: Time For A New Playbook (inspired by my recent podcast with Rebank’s Will Beeson).
Further readings on female entrepreneurship
Ian Hathaway’s most recent work with the Center for American Entrepreneurship is on the topic of women and entrepreneurship. You should definitely have a look at their report, which was just published in partnership with the National Center for Women & Information Technology: “The Ascent of Women-Founded Venture-Backed Startups in the United States”.
Here are two very recent articles covering the report, with different angles and tones:
Study: For Female Founders Seeking VC Funding for the First Time, the Playing Field Is Finally Getting More Level (Leigh Buchanan, Inc).
Where Women Startup Founders Are Gaining Ground (Richard Florida and Nicole Javorsky, CityLab).
I wanted to complete it all with the following sources:
A Fix for Discrimination: Follow the Indian Trails (Vivek Wadhwa, TechCrunch, February 2010)
The Gender Gap In Tech: Why Mentors Matter (Elizabeth Stark, The Huffington Post, June 2010)
Cindy Gallop: “I Get Very Annoyed When People Talk About The Mommy Track” (Power to Fly, November 2015)
How Women Won a Leading Role in China’s Venture Capital Industry (Shai Oster and Selina Wang, Bloomberg, September 2016)
Why Is Silicon Valley So Awful to Women? (Liza Mundy, The Atlantic, April 2017)
The Silent Rise Of The Female-Driven Economy (Danielle Kayembe & Bourree Lam, Refinery29, December 2017)
The Cost of Devaluing Women (Sallie Krawcheck, The New York Times, December 2017)
(me, my weekly newsletter, March 2018)
Dear female founders, where are you hiding? (my colleague Emilie Maret, The Family, October 2018)
Ambitious Entrepreneurs from Amsterdam (my cofounder Alice Zagury, The Family, December 2018)
Warm regards (from Washington, DC, USA),
Nicolas