Priceline's Co-Founder Explains the Secret to a Successful Startup

National Journal

When a roster of superstar entreprenuers joined Barack Obama at the White House in early 2011 to launch the Startup America Partnership, it was with the intent of creating an initiative that would encourage the development of new companies and create jobs. The effort, which operates independently as a non-profit, helps connect startups with mentors, investors, and each other. It's now a network of some 13,000 startups in 32 regions across the United States.

National Journal's Sophie Quinton recently sat down with Startup America Partnership CEO Scott Case to learn more about how local leaders and national policymakers can help big ideas take off. Case should know: he was the founding chief technology officer of Priceline, the online travel deal company that hit a billion dollars in annual sales over less than two years. Edited excerpts follow.

How does a startup differ from a small business? 

We focus on high-growth startups, so there are a few key differences. One is just a matter of ambitions. We often talk about startups being launched by founders, whereas the owners of small businesses are...owners! It's a different set of expectations for yourself. Startups are focused on topline growth early, versus profitability. If you’re starting a small business for which you need to generate income right out of the gate, you have a different set of criteria. We also tend to focus on companies that are less than five years old. It's really that early stage in growth.

At the very highest level, of course, the categories are probably the same: we've got to figure out how to get more customers, what kind of capital we’re going to need, how to find great talent for what we do. 

How can local leaders help startup communities grow? Can there even be one answer to that question? Des Moines, Iowa and New York City are both full of startup activity, but those places have different strengths.  

The key is engaging entrepreneurs in two categories: people who are actually building high-growth businesses today, and people who have had some success and who are committed to growing the community. Once you have that core group of people, it doesn’t matter where they are, if they’re in Des Moines or in New York.

The scale may be different, but the challenge is the same: how do you bring entrepreneurs together and let them set the tone for what’s possible? Investors have nothing to invest in if there aren’t entrepreneurs. Universities can’t partner unless there are entrepreneurs. The local government can do all it wants, but if you don’t have inspired entrepreneurs, it doesn’t matter what you do—you’re not going to inspire growth.

Then you take it to the next level. Imagine all those startup communities connected across the country. How quickly can you get to the right people in Dallas, L.A., Nashville? That’s happening now. That wasn’t happening two, three, four years ago.

Since Startup America Partnership launched, it’s shifted from connecting businesses with discounts on goods and services to connecting people with each other. Did something happen to inspire that change?

When we first started, we were focused on helping as many startups as directly as possible. So we partnered with some fantastic companies that pulled together some great resources, and the response from startups was strong. But as we started working with the startup community, a consistent theme kept coming up, which in retrospect was obvious: as valuable as providing some direct resources and tools to them was, the real asset was anything that got them better connected.

The aha! moment was realizing things like, entrepreneurs were feeling compelled to move to Silicon Valley, because everybody around you there is doing the same kind of stuff. The crucible of those relationships helps strengthen the company. That’s probably true for all businesses-- there are rotary clubs, chambers of commerce, all kinds of small business groups. But a lot of those forums aren’t the right ones if you’re starting a high-growth company.

What’s a piece of advice that you often give entrepreneurs?

There are probably two key things. The first is: invest as much time in strengthening your network as you do in product development and customer development. That’s not necessarily going to networking events. It’s more about being thoughtful about creating relationships early on. It’s much more likely that I’m going to introduce you to someone who could be helpful to your company if I’ve known about your company for three months than if you reach out to me cold and say, I’ve got this startup.

Number two is focus. Many entrepreneurs suffer from shiny-object syndrome. They’ve got so many opportunities. They’ll say, "I’ve got five revenue streams!" and I’ll say to them, "Build one."

What can the federal government do to help startups? 

Most importantly, policymakers can listen carefully to the entrepreneurs themselves. If you’re a member of Congress, oftentimes you don’t even know where the startups are. They’re three stories up, with three people in an office, building some unbelievable software, or using desktop 3D printing to create prototypes of some new technology, or they may be out reimagining agriculture, but not on a hundred thousand-acre farm. They'll tell you what they need. It’s oftentimes not the things you think.

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