For Philadelphia's startup ecosystem to compete with the nation's top innovation hubs, local leaders say there needs to be more buy-in among its most influential organizations, from city government and large corporations to colleges and universities.
Robin Hood Ventures Executive DirectorEllen Weber and Plain Sight Capital and Coded by Kids Founder Sylvester Mobley, speaking at PHL Inno's Fire Awards event at Yards Brewing Co. last week, said they envision a more cyclical tech economy in Philadelphia. The duo, with nearly 40 years in tech leadership positions between them, play a role in kickstarting that cycle. Both invest in early stage startups but say for those young companies to stay in Philadelphia, they need to know they can find more capital, more talent and an opportunity to collaborate with major corporations.
In places like Silicon Valley or Boston, early stage investments can begin a cycle where young startups grow, attract talent, then produce spinoffs, all in the same region. In Philadelphia, Mobley said investors tend to be more conservative and risk-averse than their counterparts on the West Coast. One way to foster that kind of cycle here is to change the local investor mentality, which can be "prohibitive to growth."
"When you look at other startup ecosystems that are successful, that do well and are thriving, there is early capital that starts at the beginning, companies are able to raise more capital and grow in scale," Mobley said. "Then they're having exits, however that exit works. Then it just gets recycled. Those co-founders, those early employees that reap the benefits of that exit and become angel investors or startup companies, we don't really have that here in Philly. If we have that, that just then starts to feed into the ecosystem."
Establishing a more reliable flow of aggressive investment to support budding innovators and early stage startups is key, according to Mobley and Weber.
"The reality is, anyone who looks at how you grow an ecosystem knows you have to produce talent internally, there has to be a pipeline of talent," Mobley said. "It's critical to the city to have that and to retain people [and] to have those people knowing when they graduate, or if they take that job at Comcast or wherever it may be, if they want to step out and start a company or raise capital, everything they need is here. They don't have to leave and go to the West Coast or Austin."
Weber said that she would like to see more "porousness" between major Philadelphia-based corporations like Comcast and the tech community. Large corporations that haul in tech talent produced by the region's many colleges and universities should be a major cog in the startup cycle.
"In some cities, you work at Microsoft for a few years, you slave away there, and then you start your startup, and then you get bought by Microsoft, you go back to Microsoft, you start the cycle over again," Weber said. "I'd like to see a little bit more of that [in Philadelphia]."
Weber, who previously led the Temple University Innovation and Entrepreneurship Institute, said she's hearing more and more that local college students want to stay in the region. Both Weber and Mobley said that makes it all the more critical to develop the infrastructure to support that home-grown talent, but Philadelphia has some ground to make up. A recent report from CBRE found that there is a gap of about 5,300 between the number of tech degrees earned in Greater Philadelphia and the number of tech jobs added in the past five years.
Mobley said that "often in Philly the mentality is, we can just get companies to move here and that's how we can address some of this." In reality, that's not always the case. Weber said in order for that to happen, the city must address persistent issues affecting public education and safety.
"The most important thing the city government can do, to keep this pattern growing, is to fix the schools and fix crime," Weber said. "If you fix those — and I know that's not easy — but if you fix that, then people will want to continue to live here, grow here, build their companies here. It's just such a beautiful virtual cycle if we can make that happen."
