By Scott Meacham
Copyright © 2015, Oklahoma Publishing Company
Oklahoma is a great state for gazelles.
I don’t mean the fast little antelopes that are found in tropical and subtropical Asia and Africa. (Although with Oklahoma’s summers, they might feel right at home.)
I’m talking about gazelle companies — those high-growth firms, as defined by Investopedia, that increase revenues by at least 20 percent annually for four years or more, starting from a revenue base of at least $1 million. At that pace, a “gazelle” company doubles its revenues over 48 months.
The majority of net new jobs in this country — two-thirds according to the Small Business Administration — come from entrepreneurship and new businesses. Most of that growth (some reports state as much as 70 percent) comes from the gazelles.
Gazelle companies, like the graceful antelopes that outrun cheetahs and lions, are noted for their pace of growth, not their size.
Sustainable gazelles are not only faster at creating jobs and wealth in the early years, they really tend to add jobs and revenue in years five through 10. And that drives the demand for houses, cars, and other goods and services.
Gazelles draw in established firms in the industry. They attract top students to a state’s universities; they also create challenging, high-paying jobs that keep those students employed after graduation.
It would be great if we could look at 20 or even 40 deals and pick out the next one or two gazelles. But with startups, it doesn’t work like that.
More startups fail that don’t. About 20 percent don’t survive the first year. About a third are gone after two years, and 50 percent don’t make it after five.
A state needs a continuous pipeline of deals to gain even a single gazelle and then a front-end focus (like we deliver through the Venture Assessment Program) to help the most promising startups break out from the herd.
But first there has to be a herd.
Last year was America’s best year of job growth since 1999. Yet, since the Great Recession in 2008, for the first time since Gallup began tracking, we are in a phase where there are less business starts than business closings.
That means there have been fewer entrepreneurs starting up the next gazelle.
Entrepreneurship is still bubbling in Silicon Valley, of course. And in Boston and New York City … and also in Utah, Colorado, and Washington State.
In these states, both government and business are doing more. They have aligned resources — without duplication — to build out robust entrepreneurial ecosystems. Their public-private partnerships are gaining steam, jobs, and wealth.
We Oklahomans need to put our shoulders to the same wheel.
Scott Meacham is president and CEO of i2E Inc., a nonprofit corporation that mentors many of the state’s technology-based startup companies. i2E receives state appropriations from the Oklahoma Center for the Advancement of Science and Technology. Contact Meacham at i2E_Comments@i2E.org.
Did You Know? Entrepreneurs create two out of three net new jobs and have for the last 15 years. SOURCE: Fortune